Boao Forum for Asia

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

The Chinese president repeated his commitment to opening up the economy and made a number of veiled swipes at Donald Trump as threat of trade war looms

PUBLISHED : Tuesday, 10 April, 2018, 1:12pm
UPDATED : Tuesday, 10 April, 2018, 3:05pm

Chinese President Xi Jinping committed to further opening up China’s markets as he sought to portray the country as a leading defender of globalisation.

His pledges were made in a speech to the Boao Forum for Asia on Tuesday, which was delivered against a backdrop of rising trade tensions with the United States, and it was widely hoped that his remarks would help to calm tensions.  

Xi made no direct reference to US President Donald Trump in his address, but invoked various Chinese sayings and metaphors to deliver a strong defence of China’s economic openness and commitment to further reforms. Here the major takeaways from his speech, which was covered live here.

Market opening and easier access for foreign investors

Xi ushered in a “new phase of opening up,” making broad commitments to further liberalise China’s economy such as by “significantly broadening” market access, easing restrictions on foreign firms, lowering import tariffs, and creating a more attractive investment environment.

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The Chinese leader restated a number of previous comments and insisted he would ensure that major reforms would be implemented, including earlier promises to open up China’s insurance and financial sectors. He also stressed that he would seek to open more areas of cooperation. 

He hinted at one point that China would reform its motor industry to allow foreign car makers to have wholly owned factories in China, which would be good news for companies such as Tesla. 

China’s door will not be closed, and will only be opened up even wider
Xi Jinping

In October, the US company reportedly reached a deal with the Shanghai government to set up its own factory in the city’s free-trade zone, a departure from the practice requiring foreign companies to form joint domestic ventures.

He also suggested that tariffs on car imports could be lowered – a day after Trump had complained on Twitter about the “stupid” imbalance between America’s 2.5 per cent levy on car imports compared with China’s 25 per cent.

“China relied in the past on creating favourable policies for itself,” Xi said. “We will have to rely more on improving our investment environment, we will increase our alignment with international rules, and our intellectual property protection.”

“China’s door will not be closed, and will only be opened up even wider.”

Xi also insisted that China does not seek a trade surplus – it had a record US$376 billion surplus with the US last year – and has a “genuine desire’ to increase imports.

Veiled swipes at Donald Trump

Although Xi never directly referred to the US president, he stressed throughout his speech the need for all countries to embrace globalisation and multilateralism – ideas that Beijing has warned are at threat from the dispute with Washington.

He pushed back directly on many of the Trump administration’s loudest criticisms of China’s practices, saying a “cold war and zero-sum mentality” was out of place.

The Trump administration has railed against China’s intellectual property “theft”, restrictions on market access, and the growing trade imbalance.

At the same time, Xi hit back at the tariffs Washington has threatened to impose on US$150 billion worth of Chinese products.

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Many of the imports targeted have benefited from Beijing’s “Made in China 2025” strategy – an innovation-driven plan to turn China into a hi-tech powerhouse.

“We hope developed countries will stop imposing restrictions on the normal and reasonable trade of hi-tech products and relax export controls on such trade with China,” he said.

Those that reject innovation will be left behind and be assigned to the dustbin of history
Xi Jinping

Beijing’s supporters have criticised the US trade measures as protectionist in nature, and a violation of the global trading system.

“Those that reject innovation will be left behind and be assigned to the dustbin of history,” Xi said. “Human history shows that openness leads to progress, while seclusion leaves one behind.”

Intellectual property protection

One of Xi’s major commitments was to bolster intellectual property protections – for foreign and domestic firms.

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The announcement follows Washington’s decision to launch an investigation into China’s alleged intellectual property abuses. 

US and European business operating in China have long complained about lax intellectual property protections as well as forced technology transfers.

Xi said in his speech that China would improve its economic competitiveness by encouraging “normal technological exchanges and cooperation” between Chinese and foreign enterprises.

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“Opening up is a strategic development for China,” he said. “The high-quality development of China’s economy can only be achieved with greater openness.”

China had “every intention to translate these reforms into reality sooner rather than later”, he said.

Touting economic reforms

The main theme in Xi’s speech was the benefits of China’s economic reforms over the past 40 years and a commitment to continue along the path of greater openness. 

His speech was peppered with references about how far China’s economic development had come, citing membership of the World Trade Organisation and his signature Belt and Road Initiative to build a transcontinental infrastructure network.

“China has lived up to its responsibility as a major country,” he said. “China will stay as determined as ever to build world peace and to contribute to world stability and uphold the international order.”

Xi also countered criticism about the intentions behind the belt and road projects insisting that China has “no geopolitical calculations, seeks no exclusionary blocks, and imposes no business deals on others”.

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His comments echo the themes in his speech to the Davos Economic Forum last year, when he also portrayed China as a vanguard protector of globalisation and economic liberalisation.

He closed off his speech with a rousing call for countries to jointly “dedicate ourselves to openness and win-win outcomes … to achieve a better tomorrow for Asia and the world”. 

His remarks were given a standing ovation by audience members, who included International Monetary Fund chief Christine Lagarde, Philippine President Rodrigo Duterte and newly elevated vice-premier Liu He, Xi’s key economic adviser.

Free trade ports with Chinese characteristics?

Xi made only a brief, throwaway reference to free-trade ports despite expectations that these would be one of the main economic policy announcements during the forum.

“We will explore the opening of free-trade ports with Chinese characteristics,” he said during his speech.

The South China Morning Post reported earlier that Hainan, a province that has been referred to as “China’s Hawaii”, could be one of the locations chosen for a new port, citing sources familiar with the matter.

The new ports, announced by Xi last October, are expected to allow greater market access and more freedom for local policymakers compared with existing free-trade zones in China, such as the Shanghai Free-Trade Zone.