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China economy

China’s top economic officials put on a friendly face for foreign trade and investment 

As the prospect of a trade war with the US looms, Chinese business delegates urge restraint from both sides

PUBLISHED : Tuesday, 06 March, 2018, 3:54pm
UPDATED : Wednesday, 07 March, 2018, 11:07am

China will open more of its economy to foreign investors, with moves afoot to expand market access, top economic officials said on Tuesday as lawmakers from around the country met for an annual session set to back an end to presidential term limits.

While the prospect of an end to the limits has raised fears of strongman rule, economic bureaucrats are trying to convince the world that China will open to trade and investment flows and is willing to integrate further into the global economy.

In his government work report on Monday, Chinese Premier Li Keqiang said China would stick to “free trade” and open up its telecoms, health care, education and new-energy vehicle sectors to foreign investors. In addition, China would remove foreign ownership caps on banks, brokerage houses and fund management firms – a promise made by Beijing during US President Donald Trump’s visit to China in November.

That message was underlined on Tuesday by Ning Jizhe, deputy director at the National Development and Reform Commission, the top economic planning agency, when he said the government was considering a slew of measures to widen market access this year.

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NDRC chief He Lifeng also said China’s exports and imports would continue to grow steadily in 2018 and Beijing would show its commitment to deepening integration with the world economy with the first import expo in Shanghai later this year.

“We will embrace an open policy. China’s door of opening will become wider,” He said.

The pledges come as the United States is reassessing its attitude to the global trade and investment system, from which China has benefited over the last few decades. Trump has said he will endorse higher tariffs on steel and aluminium imports, greatly raising the odds of a world trade war.

In Washington on Monday, Edward Alden, a senior fellow the Council on Foreign Relations, said the Trump administration was serious about trade action.

“I would argue that Trump is perfectly prepared to bluff at times to gain negotiating advantages. But this does not look like bluff to me. They are pretty determined to go down this road,” Alden said.

Back in Beijing, business delegates to the country’s top legislative and advisory bodies urged the US and China to avoid a trade conflict.

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Liu Yonghao, chairman of agribusiness giant New Hope Group, a top importer of US soybeans, said a tit-for-tat approach between the world’s first and second-biggest economies could end in a了“lose-lose situation”. 

China buys about two-thirds of the world’s soybean crop, mostly from the United States, Brazil and Argentina. Last year, the US exported 32.9 million tonnes of the crop to China, a third of its total imports of the grain, according to Chinese customs data. 

“The US has large areas of land, highly efficient agricultural production, and therefore low prices of agricultural products. The US needs China’s big market, particularly for soybeans,” Liu said. “And China has large consumption and purchasing power as well as demand for products such as soybean cooking oil.”

Liu Hanyuan, chairman of Sichuan-based solar panel and livestock group Tongwei, said China and the US “should cherish the historical achievements of the global free trade”.

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Alicia Garcia Herrero, chief economist of Asia-Pacific at French bank Natixis, said many foreign investors had yet to be convinced that China’s efforts to open up its economy were more than a friendly gesture to Trump. 

“Even if the promised opening up were real this time, it would still take quite some time to convince foreign investors that this time is real,” Herrero said. 

Additional reporting by Zhenhua Lu in Washington