Boao Forum for Asia

China wants to embrace the world, not take it over, Xi says at Boao Forum for Asia

Chinese leader makes slew of promises, but some observers are getting weary of words rather than actions

PUBLISHED : Wednesday, 11 April, 2018, 10:15am
UPDATED : Wednesday, 11 April, 2018, 11:07am

China’s President Xi Jinping’s strong message delivered at the Boao Forum for Asia was intended to ease tensions in the tit-for-tat trade dispute with the US, and assuage concerns of the world at large about China’s economic diplomacy and rising assertiveness, analysts said.

Washington was the main target for Xi’s remarks at the annual economic summit in south China’s Hainan province, as he vowed to further open up and liberalise the nation’s economy.

“China’s opening up will definitely enter a whole new phase,” Xi told the audience of key leaders, including Philippines President Rodrigo Duterte and the managing director of the International Monetary Fund Christine Lagarde. 

“I want to clearly tell everyone that China’s open door will not be closed, it will only be opened wider,” he said in his first public speech since he set himself up as the country’s new paramount leader after successfully scrapping presidential term limits last month.

His slew of commitments on market reform and liberalisation – including greater intellectual property protection, easier market access, and lower tariffs in key sectors such as car making – come as the spectre of a Sino-US trade war looms large, with the world’s two largest economies exchanging tariff threats and rhetorical barbs. Last week, fears escalated after US President Donald Trump threatened to impose tariffs on a total of US$150 billion worth of Chinese hi-tech products.

Xi did not name the US or Trump in his speech, but addressed several of Washington’s grievances regarding intellectual property “theft”, a growing trade imbalance, and Trump’s tweet from hours earlier complaining about China’s “stupid” tariffs on US cars.

Xi Jinping’s defence of globalisation and open markets: key takeaways from Chinese leader’s speech to Boao Forum

While most of the reforms Xi raised were not new, his emphasis on economic openness could lower the temperature of the trade tiff, and shift the onus back onto Washington, observers said.

Lately, promises to open up further have not been in short supply. We hope this time we will actually see some meaningful implementation
Michael ClaussGerman ambassador to China

“China has already given the US the chance to step backwards, and go back to square one,” Iris Pang, economist for Greater China at the Netherlands-based ING Bank, said. “It’s really up to Trump now. A trade war is a lose-lose outcome for everyone.”

Singapore’s Prime Minister Lee Hsien Loong said a trade war between China and the US was “still far from inevitable”, but if it did take place it would undermine the multilateral trading system.

“We look forward to seeing [China’s reform] strategies being elaborated, implemented and bearing fruit,” he said at the forum.

Not everyone was convinced by Xi’s platitudes, with many people in the US and European business communities saying they were tired of hearing about China’s unfulfilled pledges.

Germany’s ambassador to China Michael Clauss said rhetoric alone would not change the fact that China ranked almost last in the Organisation for Economic Cooperation and Development’s listings of countries’ openness to foreign direct investment.

“Lately, promises to open up further have not been in short supply,” he said. “We hope this time we will actually see some meaningful implementation.”

Chinese President Xi Jinping stands up for globalisation and free trade at Asia’s Davos

Xi also continued to promote China’s advocacy for globalisation and the maintenance of the international order, as he did during his speech last year at the Davos Economic Forum. His embrace of the global trading system is in sharp contrast to the Trump administration’s “America first” policy and anti-global rhetoric.

As well as talking about economic liberalisation, Xi defended China against those who accuse it of making “geopolitical calculations” and criticise his signature “Belt and Road Initiative”. Critics of the plan have argued it represents a form of “sharp power”, with economic sweeteners used as vehicles for China to expand its influence and push for a new type of neocolonialism.

“China does not have geopolitical calculations, seeks no exclusionary blocks, and imposes no business deals upon others,” Xi said.

Xi Jinping’s defence of globalisation and open markets: key takeaways from Chinese leader’s speech to Boao Forum

His remarks were an attempt, without losing face, to show China had only benign intentions on the trade front, said Zhang Baohui, a professor of Chinese politics and international relations at Lingnan University in Hong Kong.

“[Xi] wanted to tell the United States that the US doesn’t need to use unilateral measures to force China to open up its market because China already has a long-term objective to open up for its own reasons,” he said.

“But he also had a bigger message related to the trade war, which is that China is a benign rising power; China has no intention to change the international status quo to become a new hegemon … it’s not a threat to the US global position.”

Over the weekend, China deployed its Liaoning aircraft carrier in the South China Sea for the start of unprecedented week-long drills. At the same time, the US Navy sent three aircraft carrier battle groups into the contested waters.

Vanuatu denies Chinese approach to set up military base

There are multiple claimants to the South China Sea, but Beijing claims almost all of it and in recent years has embarked on an aggressive programme of building artificial islands in the waterway and staging naval and air force exercises.

“That’s China’s typical tactic … on one hand they want to project a benign image … but at the same time … maintain a robust posture that China is … willing to defend its core interests,” Zhang said.

Additional reporting by Liu Zhen, Wendy Wu, and Reuters