China’s Xi Jinping promises lower tariffs, more imports

Chinese President Xi Jinping’s remarks come at a time of heightened tension between China and some of its biggest trade partners, particularly the US. (Reuters)
Updated 05 November 2018
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China’s Xi Jinping promises lower tariffs, more imports

  • China expects to import $30 trillion worth of goods and $10 trillion worth of services in the next 15 years

SHANGHAI: China will lower import tariffs and continue to broaden market access, President Xi Jinping said on Monday at the opening of a week-long trade expo seen as an attempt by Beijing to counter mounting criticism of its trade and business practices.
Xi also promised to accelerate opening of the education, telecommunications and cultural sectors, while protecting foreign companies’ interests and enhancing punitive enforcement for infractions of intellectual property rights.
Xi’s remarks come at a time of heightened tension between China and some of its biggest trade partners, particularly the US, which has imposed tariffs on $250 billion worth of Chinese goods so far. China has retaliated with $110 billion worth of tariffs on US goods.
The Nov. 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.
“CIIE is a major initiative by China to pro-actively open up its market to the world,” Xi said.
US President Donald Trump has railed against China for what he sees as intellectual property theft, entry barriers to US business and a gaping US trade deficit. No senior US officials were set to attend the Shanghai event.
Xi said the import expo showed China’s desire to support global free trade, adding that countries of the world must pursue open policies and oppose protectionism.
He said “economic globalization is facing setbacks, multilateralism and the free trade system is under attack, factors of instability and uncertainty are numerous, and risks and obstacles are increasing.”
China expects to import $30 trillion worth of goods and $10 trillion worth of services in the next 15 years, Xi said.
China imported $1.84 trillion of goods in 2017, up 16 percent, or $255 billion, from a year earlier. Of that total, China imported about $500 billion of goods from the US.
The Chinese government’s top diplomat, State Councilor Wang Yi, said in March that China would import $8 trillion of goods in the next five years.
Expectations had been low that Xi would announce bold new policies of the kind that many foreign governments and businesses have been seeking from Beijing.
Instead, people involved in planning meetings have said they were anticipating an event long on symbolism and short on substance meant to signal China’s willingness to narrow trade deficits and openness.
The European Union, which shares US concerns over China’s trade practices if not Trump’s tariff strategy to address them, on Thursday called for China to take concrete steps to further open its market to foreign firms and provide a level playing field, adding that it would not sign up to any political statement at the forum.
Trump is expected to meet Xi this month, but has said that if a deal is not made with China, he could impose tariffs on another $267 billion in Chinese imports into the US.
Presidents or prime ministers from 17 countries were set to attend the expo, ranging from Russia and Pakistan to the Cook Islands, though none from major Western nations. Government ministers from several other countries were also coming.
Swiss President Alain Berset did not make the trip to China, despite being announced as among attendees by China’s foreign ministry last week. The Swiss government said in a statement to Reuters on Sunday that his visit had never been confirmed, and that Secretary of State Marie-Gabrielle Ineichen-Fleisch would represent Switzerland.
Some Western diplomats and businesses have been quietly critical of the expo, arguing it is window dressing to what they see as Beijing’s long-standing trade abuses.
Exhibitors from around 140 countries and regions will be on hand, including 404 from Japan, the most of any country. From the US, some 136 exhibitors will attend, including Google, Dell Inc, Ford and General Electric.
A handful of countries are being represented by a single exhibitor selling one product.
For Iraq, it’s crude oil. Iran, saffron. Jamaica will be marketing its famed blue mountain coffee and Chad is selling bauxite. Tiny São Tomé is selling package holidays.


Oil recovers some losses after 6% plunge but markets remain wary

Updated 51 min 54 sec ago
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Oil recovers some losses after 6% plunge but markets remain wary

  • Investors remained on edge, with the International Energy Agency warning of unprecedented uncertainty in oil markets
  • ‘The global economy is still going through a very difficult time and is very fragile’

SINGAPORE: Oil prices on Wednesday clawed back some of the previous day’s more than 6 percent plunge, lifted by a report of an unexpected decline in US commercial crude inventories as well as record Indian crude imports.
But investors remained on edge, with the International Energy Agency (IEA) warning of unprecedented uncertainty in oil markets due to a difficult economic environment and political risk.
International Brent crude oil futures were at $63.19 per barrel at 0239 GMT, up 66 cents, or 1.1 percent from their last close.
US West Texas Intermediate (WTI) crude futures, were up 66 cents, or 1.2 percent, at $54.09 a barrel.
Wednesday’s gains came after a report by the American Petroleum Institute late on Tuesday that US commercial crude inventories last week fell unexpectedly by 1.5 million barrels, to 439.2 million, in the week to Nov. 16.
Record crude imports by India of almost 5 million barrels per day (bpd) also supported prices, traders said.
Yet Wednesday’s bounce was small in the context of the general market weakness, which saw crude tumble by more than 6 percent the previous session amid a selloff in global stock markets.
“The global economy is still going through a very difficult time and is very fragile,” IEA chief Fatih Birol said on Tuesday.
“Rising global growth fears smashed oil markets and saw European and US shares slide,” futures brokerage CMC Markets said in a daily note.
With output surging and the demand outlook deteriorating, the Organization of the Petroleum Exporting Countries (OPEC) is pushing for a supply cut of between 1 million and 1.4 million bpd to prevent a repeat of the 2014 glut.
“We would anticipate further weakness until the reaction from OPEC+ (Dec. 6) and the G20 summit is clearer (Nov. 30/Dec. 1),” said Ashley Kelty, oil analyst at investment bank Cantor Fitzgerald Europe.
Despite an expectation of OPEC-led cuts, Brent and WTI prices have slumped by 28 and 30 percent respectively since early October, and the entire structure of the forward price curve has changed.
The Brent forward curve was in steep backwardation in October, implying a tight market with prices for spot delivery higher than those for later dispatch. This makes it unattractive to store oil.
Since then, however, the curve has moved into contango for most of 2019, implying oversupply as higher prices further out make it attractive to store oil for later sale.
“Investors are becoming increasingly concerned that any potential production cuts by OPEC will be insufficient to cover the surplus in the market,” ANZ bank said on Wednesday.
“The list of reasons for the decline are pretty specific ... too much supply and a risk of slowing demand growth,” said James Mick, Energy Portfolio Manager with US investment firm Tortoise.
“Part of the supply issue has been surging US production,” he added.
US crude oil production has jumped by almost a quarter this year, to a record 11.7 million bpd largely because of a surge in shale output.