World Economy

Li: China Will Stick to Path of Open Markets, Reforms

Bulgaria hopes the summit will help secure much-needed funds to build new roads, highways and other infrastructure in eastern Europe
Li: China Will Stick to Path of Open Markets, ReformsLi: China Will Stick to Path of Open Markets, Reforms

China remains open for trade with foreign partners and can only benefit from an economically strong Europe, its leader said on Saturday as he pressed for expanded ties with the continent’s eastern wing while waging a tariff war with Washington.

Premier Li Keqiang told a summit with central and eastern European leaders that China would stick to the path of opening its markets and other reforms that had fueled its economy, providing opportunities for EU members and aspirants in the bloc’s poorer half. “It is two-way traffic,” Li said through an interpreter, Reuters reported.

 “...Opening up has been a key driver of China’s reform agenda so we will continue to open wider to the world, including widening market access for foreign investors.”

Li’s attendance at the seventh “16+1” summit in Sofia, Bulgaria, coincided with the firing of the first salvos in what risks becoming a protracted global trade war as Washington and Beijing slapped tariffs on $34 billion worth of each others’ goods.

Doubts have been growing in some participating countries of the value of the annual meetings, and China has come under pressure to reassure that its courting of individual countries from the Baltics to the Balkans would not hurt the European Union as a whole.

“If Europe is weakened, it will only be bad news for China, not the other way around,” Li said. “This platform needs to stay open. It needs to be transparent.”

Officials from the EU, World Bank, and European Bank for Reconstruction and Development were invited and Li said those organizations were welcome to jointly fund projects in the region.

 Keeping It Sweet

Mindful of the need to keep relations with the EU on an even keel as his trade battles with US President Donald Trump intensify, Li has been careful to stress China’s support for European integration and rules in trade and procurement.

Analysts said he would avoid raising issues that might annoy western European governments.

China has promised billions of dollars for development projects in central and eastern Europe as part of its Belt and Road strategy to carve out new export markets.

More than 250 Chinese companies and 700 business people from central and eastern Europe were expected to attend an economic forum alongside the summit, seeking deals in trade, technology, infrastructure, agriculture and tourism.

Bulgaria hopes the summit will help secure much-needed funds to build new roads, highways and other infrastructure in eastern Europe, a region that still lags richer states in the western wing of the EU in terms of development and income.

“16+1 is a format that aims to strengthen Europe,” Bulgarian Prime Minister Boyko Borissov said. “It gives more opportunities to those who joined the EU later to catch up faster.”

China has confirmed it is willing to back Bulgaria’s Belene nuclear power project and last month Hungary finalized the construction timetable with Beijing for a Budapest-Belgrade rail link.

Countries taking part in the summit include the region’s EU states, plus Albania, Bosnia and Herzegovina, Macedonia, Montenegro and Serbia.

 Financial Sector Reforms

China will deepen financial sector reforms and fend off major risks in the economy, the banking and insurance regulator said on Thursday.

China’s economic fundamentals showed no possibility of a sharp yuan depreciation and the yuan could rise in future, Guo Shuqing, Chairman of the China Banking and Insurance Regulatory Commission, said in a statement published on the regulator’s website.

The yuan had entered “a reasonable range of two-way fluctuations”, said Guo, who is also the Communist Party chief of the central bank.

A trade war initiated by the United States could not be sustained, Guo added.

 H2 GDP Growth

China’s broad economic growth was expected to ease to around 6.6% in the second half of this year, the State Information Center said on Saturday.

The official China Securities Journal quoted the State Information Center saying the Chinese economy is likely to experience a mild slowdown in the second half of the year as financial market risks become “obvious” and demand is expected to decline.

The economy has already felt the pinch from a crackdown on riskier lending that has driven up corporate borrowing costs.

The central bank has since pumped more cash into the economy to ease fears from the start of a trade war with the United States by cutting reserve requirements for banks.

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