China’s President Xi Jinping pledged Tuesday to significantly lower import tariffs for vehicles, ease restrictions on foreign investment in the autos industry, and generally work harder to import more goods that his country needs, to reduce trade imbalances.
The pledges were not new, but could be seen as an attempt by China to defuse a deepening conflict over trade with the United States.
Speaking at the Boao Economic Forum on the southern Chinese island of Hainan, Xi pledged to “significantly broaden market access” for foreign companies, including a pledge to ease foreign equity restrictions in the automobiles industry “as soon as possible,” and “significantly lower import tariffs” for vehicles.
“China does not seek a trade surplus,” Xi said. “We have a genuine desire to increase imports and achieve greater balance of international payments under the current account.”
China made a similar promise to cut auto tariffs last November when President Trump visited Beijing, and again at the World Economic Forum in Davos in January, and U.S. officials have reacted with some skepticism until now, saying it was time for action, not empty promises.
Nevertheless, the fact that the president himself made the commitment in a keynote speech at an important event, billed as China’s version of Davos, does give the promise more weight.
To set up factories in China, foreign car companies are forced into 50-50 joint ventures with Chinese companies, and many fear their valuable intellectual property will eventually find its way into Chinese cars. Vehicles imported from abroad face a 25 percent import tariff.
Trump has cited the restrictions on the auto industry as an example of China’s unfair trade practices.
(c) 2018, The Washington Post · Simon Denyer