China’s premier hopes trade war can be averted, pledges more open economy

Traditional silk weavers at work in a factory in china, where many exporters are fearful of a looming trade war. (Shutterstock)

BEIJING: China’s Premier Li Keqiang has voiced hopes that Beijing and the US can avoid a trade war, telling the close of the annual parliament session that China will open its economy further to allow foreign and Chinese firms to compete on an equal footing.
Fears of a global trade war mounted after US President Donald Trump imposed hefty import tariffs on steel and aluminum earlier this month and, according to sources in Washington, the US is set to unveil new tariffs targeting China by the end of this week.
“I hope both China and the US will act rationally and not be led by emotions, and avoid a trade war,” Li told reporters in a televised news conference at the Great Hall of the People in Beijing.
Those hopes would be damaged if, as sources say, Washington goes ahead with plans for new tariffs on up to $60 billion-worth of Chinese technology and consumer goods annually, in a move to fulfil Trump’s campaign promises to get tough on China and its trade practices.
Earlier on Tuesday, riding high after China’s largely rubber-stamp parliament unanimously re-elected him and set the stage for him to rule indefinitely, President Xi Jinping warned self-ruled Taiwan it would face the “punishment of history” for any attempt at separatism.
The warning came just days after Trump angered Beijing by signing into law legislation encouraging closer ties between Taiwan and the US.
But for the world, the potential fallout from any trade conflict between its two biggest economies posed the more pressing danger.
Without going into detail, Li told his annual press conference that China will improve access to its services and manufacturing sectors while further lowering import tariffs, including those on cancer-related drugs.
“China’s economy has been so integrated with the world’s that closing China’s door would mean blocking our way for development,” Li said.
“China’s aim is to ensure that both domestic and foreign firms, and companies under all kinds of ownership structure, will be able to compete on fair terms in China’s large market.”
During his half-hour closing speech, President Xi was heavy on aspirational themes, and he delivered a strong message on Taiwan, which is claimed by China as part of its territory.
“Any actions and tricks to split China are doomed to failure and will meet with the people’s condemnation and the punishment of history,” he said to loud applause from almost 3,000 parliamentary delegates.
China has been infuriated by Trump’s signing of legislation that encourages the US to send senior officials to Taiwan to meet Taiwanese counterparts and vice versa.
Xi made repeated references to a resurgent nation of 1.3 billion people that would “ride the mighty east wind of the new era” and was on the cusp of matching the country’s greatest achievements in its long history.
At the same time he said that increasing global concerns over China’s rise were unjustified. “Only those who are in the habit of threatening others will see everyone else as a threat.
“We will not impose our will on anyone,” he said.
When Xi’s top economic adviser Liu He visited Washington recently, the Trump administration pressed him to find ways to reduce China’s $375 billion trade surplus with the United States. “We are unwilling to see a big trade deficit, not only with the US,” Li said. “We hope trade will be balanced.”
In his remarks, Li said that as China widens access to its markets, there will be no forced transfers of technology, and China will better protect intellectual property rights.
Trump accuses Beijing of forcing US companies to transfer their intellectual property to China as a cost of doing business there, although China has insisted that technology transfers are not a condition of gaining market access.
A source who had direct knowledge of the Trump administration’s thinking said last week that the tariffs would chiefly target information technology, consumer electronics and telecoms, and other products benefiting from US intellectual property.
But they could be much broader and hit consumer products such as clothing and footwear, with a list eventually running to 100 products, the source said.
“We hope the US could ease restrictions on high-tech or high value-added product exports,”
Li said.
“We will strictly protect intellectual property. We hope this important means for balancing China-US trade will not be missed, otherwise we will lose a chance to make money.”
Before the press conference, Li introduced China’s four new vice premiers, including Liu He, widely regarded as the country’s new economic tsar. But, adhering to protocol, it was the premier who did all the talking.
Li said China was confident of achieving its 2018 economic targets. The government aims to expand its economy by around
6.5 percent this year, having surpassed the same target in 2017.
China’s financial sector was in good shape and banks have enough provisions, Li said, adding that regulators would take “resolute measures” to tackle financial risks.
The Chinese central bank was being given responsibility for drafting laws covering the banking and insurance sector, with regulation over the $42 trillion sector becoming more streamlined.
Li said he was willing to consider a formal visit to Japan, amid signs of improving ties between the two nations.
Tokyo has repeatedly pressed Beijing to do more to help rein in North Korea’s missile and nuclear programs. China said it is committed to enforcing UN sanctions, but that all parties need to do more to reduce tensions and restart talks.