World Economy

Xi to Defend China Trade From Trump Barrage

Xi to Defend China Trade From Trump BarrageXi to Defend China Trade From Trump Barrage

President Donald Trump’s barrage of tariff threats have left China’s Xi Jinping with a tricky balance to strike. He’s got to show he’s ready to retaliate against US trade threats while demonstrating China’s commitment to opening up.

The Chinese president’s first chance to hit back in person comes in a speech Tuesday at the Boao Forum for Asia—China’s answer to Davos—on the tropical island of Hainan, Bloomberg reported.

Besides reassuring the hundreds of foreign investors present that US protectionism won’t produce the same in the world’s second-largest economy, he must deliver a strong warning about letting the tariff disputes escalate into a trade war.

“You’ve got to push back and defend yourself in some way and at the same time say, ‘We are still open for business’,” said Fraser Howie, co-author of the book “Red Capitalism”, who has two decades of experience in China’s financial markets. “The argument can be: ‘How do we not respond, if America is placing tariffs on us’?”

Xi set out his defense of globalization at the real World Economic Forum in Davos last year just days before Trump took office promising to protect the US from “other countries making our products, stealing our companies, and destroying our jobs”. After an initial honeymoon with Xi, Trump has renewed his China attacks, threatening to pile on as much as $150 billion of tariffs on the country’s goods.

The levies represent an unprecedented challenge to Xi, who can’t afford an economic downturn that fuels unrest or to look weak after securing Communist Party backing last month to rule indefinitely. China in recent days has pledged retaliatory tariffs that would hit politically sensitive US regions and vowed to fight “to the end, and at any cost”.

Still, Xi is expected to emphasize the benefits of doing business with China and may announce reduced foreign-investment restrictions to mark the 40th anniversary of the reforms that launched the country’s economic boom.

“Xi’s Boao speech will reiterate China’s firm support for globalization, compliance with World Trade Organization rules and its commitment for opening up,” said He Weiwen, deputy director of the Center for China and Globalization in Beijing and a former commerce ministry official.

Top Chinese trading partners, such as the European Union and Japan, share Trump’s concerns about market access, even if they disagree with his tariff tactics. The trade spat has put new pressure on Xi to counter the US narrative during the speech, which will be attended by Philippine President Rodrigo Duterte, Singaporean Prime Minister Lee Hsien Loong, and the International Monetary Fund Managing Director Christine Lagarde.

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