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Business, Economics

Xi Jinping says China will focus on imports, further lower tariffs

China has made overtures to increase capital income in recent months.

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Updated: November 6, 2019

Chinese President Xi Jinping told world and business leaders at the opening of a mega trade fair on Tuesday (Nov 5) that China would honour its commitment and promises, as he renewed a pledge to open the Chinese market and economy to foreign companies.

His comments, made at the China International Import Expo (CIIE) in Shanghai, hit back at the European Union and European business leaders, who over the past week said China was not doing enough to level the playing field for foreign firms.

Mr Xi said there has been progress on the commitments he announced at last year’s CIIE, which included an expansion of Shanghai’s free trade zone, a lowering of tariff levels as well as boosting integration of the Yangtze River Delta.

“This shows that we do honour our commitments, and we will deliver on what we have promised,” he said in his keynote address on Tuesday.

Urging countries to “tear down walls” and stand firm against protectionism and unilateralism, Mr Xi said China is committed to further reform and opening its market.

“China will adhere to its fundamental state policy of opening up, and stay committed to opening up to promote reform, development and innovation,” he said.

This is the second edition of the massive annual trade fair, which was Mr Xi’s brainchild. It is meant to showcase China’s open market and reverse international sentiment on what critics say are unfair trade practices by Beijing.

Mr Xi’s pledges on Tuesday were light on details, but they echoed those that he had made during the first CIIE.

He said China would boost imports, improve the business environment for foreign firms and develop new free trade zones – including the free trade port on Hainan island.

He also said China would pursue more multilateral and bilateral trade deals, and greater cooperation under the Belt and Road Initiative.

“What I want to say to you today is that the Chinese market is such a big one that you should all come and see what it has to offer,” he said.

He said China would continue to foster “an enabling business environment that is based on market principles, governed by law and up to international standards”, pledging to boost protection of intellectual property and grant foreign investments greater market access.

Beijing has been making moves to “optimise the business environment” for foreign companies operating in the country. Last month, it passed legislation aimed at levelling the playing field for foreign companies in China. It has also said that it will scrap ownership limits for foreign investors in the financial sector in 2020, a year earlier than planned.

This year’s CIIE is attended by a handful of world leaders including French President Emmanuel Macron, Greek Prime Minister Kyriakos Mitsotakis, Jamaican Prime Minister Andrew Holness and Serbian Prime Minister Ana Brnabic.

Mr Macron spoke out against trade wars and unilateralism, as he urged greater cooperation between China and the EU.

“We need to accelerate the process of allowing foreign companies to access the Chinese market, and this process needs to be more open so foreign companies can be more reassured as they enter the Chinese market,” he said.

While experts were expecting Mr Xi to reveal more concrete policies, the Chinese leader instead took the chance to shore up confidence in the country, which is battling a slowing economy and a trade war with the United States.

HSBC’s Asia Pacific regional head of commercial banking, Mr Stuart Tait, said the key message from China is that it remains “open for business”.

“The dialogue that took place stressed the importance of reducing tariffs and setting up new free trade zones,” said Mr Tait, adding that China is the top market for Asian companies targeting intra-regional expansion.

Despite the criticisms about China’s trade policies, exhibitors said the expo was a good platform for them to meet Chinese partners.

“This is very clearly a B2B show, a lot of work goes into helping you meet the right people even before the show starts,” said Singapore venture capitalist Terence Tan, whose company Vino Fontaine has a booth promoting its wine preservation system.

His firm is among the 84 Singapore companies at the fair, which Trade and Industry Minister Chan Chun Sing is also attending.

Chinese officials have said that the six-day fair this year will be bigger than its predecessor, with almost 4,000 companies from 155 countries and regions.

It is expected to draw over half a million visitors, double that of last year.

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About the Author: The Straits Times is Singapore's top-selling newspaper.

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