China President Xi Jinping Vows to Cut Auto Import Tariffs
China's President Xi Jinping promised to cut the country's auto import tariffs and ease restrictions on foreign ownership in the country's automotive industry amid an escalating trade dispute with the Trump Administration.
In a speech Tuesday at a business conference, Xi made no direct mention of the dispute with President Donald Trump. However, he pledged to open China's markets further and improve conditions for foreign companies.
Xi said Beijing will "significantly lower" tariffs on auto imports this year and ease restrictions on foreign ownership in the auto industry "as soon as possible."
Xi vowed to open sectors from banking to auto manufacturing, in a speech that also warned against returning to a "Cold War mentality" in his trade disputes with Trump.
China would increase imports, lower foreign-ownership limits on manufacturing and expand protection to intellectual property, Xi said. He cited the measures while saying China was entering a "new phase of opening up" in his keynote address Tuesday to the Boao Forum for Asia, the country's answer to Davos.
"Human society is facing a major choice to open or close, to go forward or backward," Xi told hundreds of investors gathered on the resort island of Hainan. "In today's world, the trend of peace and cooperation is moving forward and a Cold War mentality and zero-sum game thinking are outdated."
The speech was being closely watched after Trump's plan to hit hundreds of Chinese products with duties.
A Boom for Tesla?
Tesla is arguably one of the biggest beneficiaries from the proposed tariff cuts. Tesla has plans to build a factory in China, and its car sales in the country have soared to record highs, reaching $2 billion in 2017.
With reduced tariffs, the firm stands to see even stronger growth numbers in 2018, as China currently levies a 25% import tax on Tesla's products.
Tesla has been investing heavily to support its Chinese fleet of electric vehicles, building out its Supercharger network and expanding its retail presence. Tesla has over 1,000 superchargers more than 2,000 regular chargers across China, including the world's largest supercharger station in Beijing.
Analysts are predicting that China could eventually become Tesla's biggest market for electric vehicles. China is the world's largest market for electric vehicles.
China faces a credibility gap after years of promises to free up the economy were followed by more centralized control, market-access barriers and state support for local companies.
Those practices are at the center of Trump's threats to levy some $150 billion of tariffs against China. The U.S. has asked the the country to reduce its trade surplus by $100 billion, cut tariffs on cars and stop forced technology transfers by foreign corporations, among other things.
Since Trump's election, Xi has presented himself as a champion of the existing global trading system. Last year, he countered Trump's "America First" campaign promises in a speech at the World Economic Forum in Davos, Switzerland, where he compared Trump's protectionism to "locking yourself in a dark room."
The Trump administration contends that Chinese companies steal the trade secrets of American companies and forces them into joint ventures to get hold of their technology, an issue that is at the center of Trump's tariff threats.
Xi's speech Tuesday also included a veiled swipe at such policies: "Paying attention only to one's own community without thinking of others can only lead into a wall. And we can only achieve win-win results by insisting on peaceful development and working together."
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