SYDNEY / SHANGHAI (Reuters) – Chinese President Xi Jinping on Tuesday pledged to further open up the country's economy and reduce import tariffs on products, including cars, in a speech that struck a conciliatory tone on the growing commercial tensions between China and the United States. State.
Xi also said that China would raise the foreign ownership limit in the automotive sector as soon as possible and that it would boost previously announced measures to open up the financial sector.
"This year, we will significantly reduce import tariffs on cars and, at the same time, reduce import tariffs on some other products," Xi said at the Boao Chinese Forum for Asia in Hainan Province.
Comments sent US stock futures. UU., The dollar and the Asian shares rose.
Xi's speech comes amid growing trade tensions between China and the United States after a week of increasing tariff threats caused by US frustration with China's trade and intellectual property policies.
The following are the comments of the analysts on the speech:
JONAS SHORT, HEAD OF THE BEIJING OFFICE AT EVERBRIGHT SUN HUNG KAI:
"What we would expect is that more specific measures will be taken, which will happen during the course of the Boao Forum most likely, but mainly echoed sentiments similar to those of Liu He … Liu He said we would be surprised by the reform, the pace of reform, in his speech in Davos.
"I think the other interesting aspect is greater IPR protection, which is very important for its industrial manufacturing sector.
"I think the market has reacted very positively to this, and that is only because they see it as a diffusion of trade tensions: China is opening sectors where they already have a clear advantage, or an absolute dominance over the sector For example, the bank is widely dominated by existing local players. "
DAVID QU, CHINA MARKETS ECONOMIST IN ANZ, SHANGHAI:
" His speech is very broad and we see it as a statement. how it will be implemented will not have a direct effect on the market, but could help lower the temperature of the "commercial war."
YOSHINORI SHIGEMI, GLOBAL MARKETS STRATEGY, JPMORGAN ASSET, TOKYO:
"Your comments seem to have covered all the main problems that the United States has posed, including intellectual property and the liberalization of national markets. Xi threw the ball to the US court. UU But it seems that China is laying the groundwork to reach an agreement with the USA. UU "
YANG HAI, STRATEGY IN KAIYUAN SECURITIES:
" With his speech, Xi is offering a solution to the Sino-American trade dispute
"Xi is waving an olive branch to the United States, and the market he is now waiting to see how the US side will play the letter in response.The market looks positive, in the hope that the dispute can be resolved through negotiations. "
SEAN YOKOTA, CHIEF OF ASIA STRATEGY IN SEB , SINGAPORE:
"The main driver is Xi's speech, the assumption and the discourse so far are not intensifying the tensions, Xi is talking more about talking and cooperating, he is backing down and reducing trade tensions."
] "He said lower auto import tariffs", which is the opposite of the trend in recent weeks from both the United States and China's "increase". the tariffs. The reduction of trade tensions is good for world trade, growth and risk sentiment and helps emerging currencies do things well. Long yen positions are unraveling as the perception of risk improves, and improvements are seen in AUD, a typical risk currency. "
IN YUAN:" Well, the history of devaluation is completely gone. We saw that China was not looking to devalue this morning also since the CNY fixation went online or a bit stronger today. China does not intend to weaken the currency to escalate trade tensions and is gaining ground. I have a forecast of 6.10 in year-end CNY. "
SEAN CALLOW, FX STRATEGIST, WESTPAC, SYDNEY:
" President Xi has ignited an escalation in risky assets that could have some legs if the US. UU They can keep the lid on protectionist rhetoric for a while. There must still have been considerable nerves about the discourse in the markets from AUD and the stock leaped on the promises that were largely expected to comply with the rules-based world order. "
RODRIGO CATRIL, SENIOR FORENSIC STRATEGY, NATIONAL BANK FROM AUSTRALIA:
"It has been a pretty good speech in terms of easing market concerns about trade. Xi did all that without even mentioning Trump. He said it was in China's interest to have an open economy, and that trade is good for all, he recognized significantly the intention to reduce tariffs for some industries. So, he has essentially referred to all of President Trump's main concerns.
"If you want to be critical, Xi did not mention the time frame for any of this, that could be a source of unresolved tension in the coming days, but in general, it was good news. benefiting from this.
"Recently we have had a bit of yo-yo effect in the markets. We have the feeling that due to the complexities of the negotiations, there is still the possibility of a conflicting title, but the general theme seems positive. The base case is that some resolution will be achieved.
KEN CHEUNG, SENIOR ASIAN FX STRATEGIST IN MIZUHO BANK, HONG KONG:
"What Xi mainly wanted to express was that China will continue to open this year, and all the measures he mentioned in the speech were to reduce the trade deficit of Other countries with China, including opening markets, lower import tariffs and intellectual property protection, Xi was responding to the Trump administration's accusation against China Xi expressed his position today: he does not want a trade war on a large scale with the United States.
"The indications for financial markets are that the chances of a full-fledged commercial war are not high. I think it eased the tension of the market. The main currencies such as the yen and the euro have reacted to his speech, the market has returned to a risky tone.
"For the Chinese yuan, it is likely to remain stable."
YUKINO YAMADA, SENIOR STRATEGY AT DAIWA SECURITIES, TOKYO:
"It was a big surprise amid concerns that there could be no solution for the US – China trade frictions. The cars are important, given that it is a very big industry and has difficult problems related to electric vehicles, now we have to see how Trump will react, but the markets will surely react positively to the growing hopes that a commercial war will be avoided. "
Additional reporting by Hideyuki Sano and Ayai Tomisawa in TOKYO, Christina Martin in BENGALURU, Swati Pandey in SYDNEY and Winni Zhou, Samuel Shen and Andrew Galbraith in SHANGHAI; Compiled by Vidya Ranganathan in SINGAPORE; Editing by Shri Navaratnam