China trade: Xi warns against 'Cold War mentality'

A steelworker in eastern China's Shandong province. China says it “firmly opposes” US President Donald Trump's tariff increase for imported steel and aluminium

No one will win in a US-China trade war

Xi said that China will take measures to sharply widen market access for foreign investors.

On Sunday, Trump touted his friendship with Xi and expessed optimism that Beijing will remove its "trade barriers because it is the right thing to do". Xi said that China was eager to increase its imports and would be "significantly" lowering its tariffs on imported vehicles and other products.

China is evaluating the potential impact of a gradual yuan depreciation as a tool in the trade dispute, Bloomberg News reported on Monday, citing people familiar with the matter, although it said the analysis did not mean officials would carry out the move.

This has escalated the trade stand-off that has been going on between the two countries.

"This year, we will considerably reduce auto import tariffs, and at the same time reduce import tariffs on some other products", Xi said at the Chinese Boao Forum for Asia in Hainan province.

After repeated pledges by Beijing to open up sectors such as financial services have yielded little substantial progress, Trump has said that the United States will no longer let China take advantage of it on trade. Instead, later Thursday night, Trump doubled down on his definitely-not-a-trade-war with China, threatened to impose tariffs on an additional $100 billion of Chinese imports, on top of the $50 billion announced last week.

The threat now triples the amount of leverage the president is trying to create, following an announcement earlier in the week of $50 billion in planned tariffs against the world's other preeminent economic power.

China's global surpluses are now far below the US negotiating targets of a few years ago, China has spent about $1 trillion propping up its currency, and intellectual-property protections are far better enforced. "This would be a victory for the world trading system and an important step away from the abyss of rising global protectionism".

Trump remained defiant and argued the pain of the dispute will pay off in the end, while China said that his administration would only "shoot itself in the foot" if it didn't back down from the "extremely wrong" threats.

The Permian basin in Texas is leading the way as USA oil production has reached an all-time high, but the prolific output is causing bottlenecks as pipelines transporting the crude have filled up more quickly than expected, depressing prices in the region. If that fails, the Chinese government can ask for a ruling from a WTO panel of experts. Under Mr. Xi, some Chinese officials and analysts said, the days when Beijing would make concessions to foster change are now gone.

However, Sino-American interests have in the past mostly been served within the context of free-trade rules, and these have led to a win-win situation in most cases.

But despite these seeming concessions, Xi did not address core themes in China's ongoing economic planning, including the Made in China 2025 initiative, which will make delivering on the promises of increasing imports more hard.

But he gave no details or an exact date for taking the measures. Even with the US tariffs, China can still reach its 2018 GDP growth target of around 6.5 percent and the impact on employment will be limited, Wang Changlin, a researcher at the National Development and Reform Commission (NDRC), wrote in a post on the commission´s official microblog account.

Taiwan's China policy-making Mainland Affairs Council, responding to Xi's latest comments, urged Beijing to abandon its requirement for Taiwan to accept a "one-sided political position" before engaging in exchanges and talks.

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