Amid escalating trade tensions between China and the U.S. over the past month, China announced Tuesday it would embrace the idea of opening up their economy further and attempting to avert any trade war with the U.S.
According to CNBC, Chinese President Xi Jinping announced plans on Tuesday to open up the Chinese economy, including lowering tariffs for autos and other products, and enforcing the legal intellectual property of foreign firms.
Xi said China would raise the foreign ownership limit in the automobile, shipbuilding, and aircraft sectors "as soon as possible" and push previously announced measures to open the financial sector.
Several investors and markets worldwide lauded the president's move to more openness, but others have said that it repeats Beijing's earlier promises with no exact dates.
Xi's plan to lower charges on imported cars, an oft-cited complaint of President Trump, came with a new deadline - before the end of the year - but left out crucial details, including by how much they would fall. He promised to improve intellectual property safeguards, another longtime American frustration, yet again gave a brief description only.
In a speech at the Boao Forum for Asia, an annual summit dubbed the "Asian Davos," and a platform for China to portray itself as an economic powerhouse and regional leader, Xi said China will take the initiative to expand imports this year and "work hard" to import products that are required by the population. Several regional leaders and diplomats were present at the summit, but no Americans were invited.
The speech comes after a month of tension between Beijing and Washington that resulted in expanding trade measures against one another. Trump has continually emphasized China's trade policies as being unfair to the U.S., resulting in a large trade deficit for Americans. In recent news, Trump has threatened severe tariffs on several Chinese products in order to counter the rising trade deficit between the countries.
Although a trade war loomed on the horizon for the two countries, at the summit, Xi stressed a more open global economy, which would be inclusive, balanced, and beneficial to all. The business community has generally embraced Xi's comments. Stock markets and the U.S. dollar have rallied higher on hopes of a compromise that would avert a trade war.
Trump struck a conciliatory tone in response to Xi's speech, saying in a post on Twitter that he was "thankful" for the Chinese leader's kind words on tariffs and access for U.S. automakers, as well as his "enlightenment" on the issue of intellectual property.
Several business and diplomatic leaders are optimistic that the recent proposed tariffs by both the U.S. and China will not be implemented and open constructive trade talks between the two are a step in the right direction.