China refreshens old promises to open up its domestic market

A chart showing how in 20 years the U.S. deficit in trade with China went from zilch to some $376 billion
The United States exported goods worth $130 billion to China in 2017. In the same year, China exported $506 billion in goods to the U.S. (source: macpixxel for GIS)
  • The leader of China listed 10 key areas where his country’s economy is to open up to foreign competition up in 2018
  • The pledge is short on details and not the first of its kind, but this time Chinese officials have adopted a timeframe for changes
  • The U.S. demand for a rapid balancing of its trade with China is not likely to be met with the measures announced thus far

The Boao Forum for Asia, sometimes called Asia’s Davos, is China’s platform for presenting itself globally and for the country’s top leaders to make important new proclamations. Before this year’s edition, stock markets anxiously awaited Chinese President Xi Jinping’s keynote speech at the forum.

The president’s anticipated trade proposals, delivered at a tense time in United States-China relations, when even a trade war was beginning to look possible, have had a calming effect. U.S. President Donald Trump praised the speech in his tweets. Relieved, the financial markets rallied. In New York, the Dow Jones surged, opening 2.2 points, while London’s mining heavyweights climbed higher with metal prices. The FTSE 100 hit a six-week high. Bourses in China and Hong Kong reacted in a similar fashion. However, investors’ and the U.S. president’s optimism about resolving the issues between the trading giants may be premature.

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