Xi Offers Long Run View as China Stands Firm on Trade
Chinese President Xi Jinping hit back against protectionist trade practices advocated by U.S. President Donald Trump in a speech in which he also pledged to further open his country’s markets to the world.
In a veiled reference to the tariffs Trump has leveled against his country’s exports, Xi told the inaugural China International Import Expo on Monday that “the practices of beggar-thy-neighbour” would lead to global stagnation. He said China would continue to promote globalization, pledging to cut import tariffs and boost domestic consumption.
“As globalization deepens, the practices of law of jungle and winner take all are a dead end,” Xi told the gathering in Shanghai. “Inclusion and reciprocity, win-win and mutual benefits are a widening road.”
Xi’s speech comes amid a war with U.S. President Donald Trump and lingering doubts about China’s serious about the pace of its economic opening. The trade expo, set to feature some 3,600 companies from 172 countries, regions and organizations, had given him another chance to finally win over his skeptics.
Enthusiasm wasn’t high in the run-up to the event. While 18 heads of state or government are slated to attend, virtually all are from small economies. Of G20 countries, only Russia is sending a head of state or government.
There’s also a notable dearth of top business chiefs. Although the event is meant to gather foreign companies to woo the Chinese consumer, global brands from Adidas to Walmart, Procter & Gamble to Uniqlo, are sending only country heads -- or no senior executives at all. Starbucks Corp. CEO Kevin Johnson, whose company opens a store in China every 15 hours, won’t be attending even though he’ll be in the same city.
China is under pressure from Trump and elsewhere to wind back its $423 billion goods trade surplus with the world, and Xi has already pledged that the country will import $24 trillion dollars of goods from abroad over the next decade and a half. While Trump has floated the possibility of a deal when he meets Xi in the coming weeks, they remain far apart on market access and government support for state-run enterprises.
“The international economy and trade will prosper if each country opens up,” Xi said. “International trade and economy will stagnate and the world economy will face difficulties in its healthy development, if each country follows the practices of beggars-thy-neighbor.”
China ranks 59th out of the 62 countries evaluated by the Organization for Economic Cooperation and Development in terms of openness to foreign direct investment. Almost half of companies surveyed in June by the European Chamber of Commerce in China said they missed out on business opportunities due to regulatory barriers or market access restrictions, and they expected obstacles to increase during the next five years.
About 180 U.S. companies are sending representatives, including big names such as Alphabet Inc.’s Google, Boeing Co., Caterpillar Inc., Facebook Inc., General Motors Co., Honeywell International Inc., Microsoft Corp., Tesla Inc. and Qualcomm Inc.
Yet the U.S. government is mostly staying away, even though China said Trump voiced support for the expo in a call with Xi last week. A U.S. Embassy spokesperson said the Trump administration had no plans to send a high-level representative, adding that “China needs to make the necessary reforms to end its unfair trade practices that are harming the world economy.”