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Xi pledges to lower tariffs, broaden market access and import more as trade fair begins

Russian Prime Minister Dmitry Medvedev, left, and China's President Xi Jinping visit the first China International Import Expo in Shanghai on November 5, 2018. Photo: Getty Images

Chinese President Xi Jinping promised on Monday to lower tariffs, broaden market access and import more from overseas at the start of a trade expo designed to demonstrate goodwill amid mounting frictions with the United States.

The November 5-10 China International Import Expo, or CIIE, brings thousands of foreign companies together with Chinese buyers in a bid to demonstrate the importing potential of the world's second-biggest economy.

It is also part of efforts to develop China-centered trading networks while resisting pressure to roll back industry plans that Washington, Europe, Japan and other governments say violate its market-opening obligations.

"It is our sincere commitment to open the Chinese market," Xi said in a speech to a VIP audience, promising to cut costs for importers and improve consumer spending power to help boost imports.

In the speech that largely echoed previous promises, Xi said that China would accelerate opening of the education, telecommunications and cultural sectors, while protecting foreign companies' interests and punishing violations of intellectual property rights.

He also said that he expects China to import $30 trillion worth of goods and $10 trillion worth of services in the next 15 years. Last year, Xi estimated that China would import $24 trillion worth of goods over the coming 15 years.

He said "multilateralism and the free trade system is under attack, factors of instability and uncertainty are numerous, and risks and obstacles are increasing."

"With the deepening development today of economic globalization, 'the weak falling prey to the strong' and 'winner takes all' are dead-end alleys," he said.

Business groups say that China still hampers access to industries including finance and logistics. They say that regulators are trying to squeeze foreign competitors out of promising fields such as information security.

The speech "is at least a tacit acknowledgement that much needs to be done," the chairman of the American Chamber of Commerce in China, William Zarit, said in an email. "We will see if this leads to the timely sweeping reforms needed for a fair and reciprocal bilateral commercial relationship."

The Chinese government is trying to restore public confidence after economic growth sank to a post-global crisis low of 6.5 percent over a year earlier in the last quarter. The country's stock market has sunk 25 percent this year, becoming the world's worst performer.

Xi acknowledged some Chinese industries face "growing risks" but said efforts to shore up growth are already paying off.

"A storm can overturn a small pond, but not a sea," he said. "After more than 5,000 years of hardship, China is still here. Facing the future, China will always be here."

The Shanghai expo also gives Beijing a chance to repair its image as a positive force for global development following complaints that "Belt and Road" projects leave host countries with too much debt, with too little work going to local companies.

'Good chance to show ourselves'

Some 3,600 companies from 152 countries including included US automakers and technology suppliers, European pharmaceutical and clothing brands, African tea exporters and Japanese electronics manufacturers are attending the five-day event at a cavernous convention center in Shanghai.

At a stand for Nicolas Correa SA, a Spanish maker of factory equipment, salesman Carl Che showed potential customers a milling machine the size of a bus that can cost 1 million to 5 million euros ($1.2 million to 6 million). Che said that Chinese manufacturers of wind turbines, aircraft and nuclear power equipment have bought 406 of the machines since 2003 and the company is looking to expand to food, health and other industries.

The expo is "a good chance to show ourselves to the whole of China," said Che. "Today, we received five customers who are very interested. It is just a matter of price."

The China agent for Metal Shark Boats, a New Orleans-based builder of heavy-duty vessels for law enforcement and fire agencies, had two 13-meter-long (40-foot-long) patrol boats sitting in metal cradles.

It has sold five boats to China's customs agency and is marketing itself to environmental and other regulators, said Sherman Ge, chairman of Shanghai-based Breeze Tech.

The expo also highlights the blurring of lines between Chinese and foreign industry as China's companies expand abroad.

Exhibitors promoting imports into China included Sweden's Volvo Cars, a unit of Chinese automaker Geely Holding; General Electric Appliances, part of China's Haier Group in 2016, and California-based solar supplier MiaSole, part of Beijing-based Hanergy Group.

Swipe at 'America First'

Xi's much anticipated speech at the Shanghai trade fair did not show that he is getting ready to make big concessions to the United States amid increasing trade tensions.

Xi made no mention of the standoff with US President Donald Trump over Chinese plans for state-led development of technology industries. But in an indirect reference to Trump's "America First" policies and threats of import controls, Xi appealed to other governments to "jointly safeguard free trade", and denounced "law of the jungle" and "beggar-thy-neighbor" trade practices.

At the same time, he did not outline any new proposals that would suggest he was prepared to meet Trump's demands, such as halting forced technology transfers or rolling back support for state-owned enterprises.

"All countries should strive to improve their business environment and solve their own problems," Xi said. "They should not always whitewash themselves and blame others, or act like a flashlight that only exposes others, but not themselves."

He stepped up warnings that protectionism would harm global growth.

Trump has railed against China for what he sees as intellectual property theft, entry barriers to US business and a gaping trade deficit.

Trump on Monday said that the trade conflict with China could still go either way.

"We are in a very big dispute with them right now, and we are winning," Trump said on a conference call with supporters the day before the mid-term elections. China wants to make a deal, but if they do not that is fine as well, he said.

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