Chinese President Xi pledges to lower auto tariffs, open other markets, in possible olive branch to U.S.

At a business conference in Hainan, China, on Tuesday, Chinese President Xi Jinping said that sometime this year, China "will considerably reduce auto import tariffs" and "import tariffs on some other products," and ease restrictions on foreign ownership in the auto industry "as soon as possible." Xi also addressed complaints about China stealing intellectual property from foreign companies, saying he will encourage "normal technological exchange" and strive to "protect the lawful ownership rights of foreign enterprises." Financial analysts said that the pledges, even without time frames or other details, could be an olive branch from Xi to President Trump to calm a brewing trade war between the countries.

Xi did not mention the U.S. or Trump in his 40 minute speech at the Boao Forum for Asia, and he focused mainly on his vision for China's economic development and role in the world. But he did address some irritants Trump has singled out regarding China, like the trade deficit. "China does not seek a trade surplus," Xi said. "We have a genuine desire to increase imports and achieve a greater balance of international payments." And he insisted that China "will not bully our neighbors," adding that "Cold War thinking and zero-sum games are increasingly obsolete. ... Arrogance or self-righteousness can only bump into walls at every turn."

China has made similar freer-trade promises before — Bejing has pledged to ease China's 50 percent limit on foreign joint ventures in the auto sector since at least 2013, for example, Reuters notes. So foreign business groups welcomed the promises cautiously. "Ultimately, U.S. industry will be looking for implementation of long-stalled economic reforms, but actions to date have greatly undermined the optimism of the U.S. business community," said Jake Parker, the vice president for China of the U.S.-China Business Council. Still, the idea that Xi's comments might avert a ruinous trade war sent stocks higher in Asia and boosted U.S. stock futures and the U.S. dollar.

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