Chinese President Xi Jinping delivers a speech at an annual meeting of the Boao Forum for Asia, in Boao, in the southern Chinese province of Hainan, on April 10 2018. Picture: KYODO VIA REUTERS
Chinese President Xi Jinping delivers a speech at an annual meeting of the Boao Forum for Asia, in Boao, in the southern Chinese province of Hainan, on April 10 2018. Picture: KYODO VIA REUTERS

Beijing — Chinese President Xi Jinping pledged on Tuesday to lower car tariffs in 2018 and take other steps to open the world’s number two economy "wider and wider", addressing major complaints by the US in a simmering trade row.

Xi’s remarks follow weeks of tit-for-tat tariffs between Beijing and Washington, and mutual threats of more levies on hundreds of billions of dollars worth of products that have raised the fear of a trade war that could hamper the global economy.

While he did not directly mention US President Donald Trump’s demands, Xi told an economic forum on the southern island of Hainan that Beijing "does not seek a trade surplus" and hopes to increase imports.

Promising a "new phase of opening up", he said China would "considerably lower" tariffs on cars and other products this year, take measures to liberalise automotive investment, and protect intellectual property — all areas that have been high on the list of demands by Washington.

"Economic globalisation is an irreversible trend of the time," Xi told the Boao Forum for Asia.

"The door of China’s opening up will not close, it will only open wider and wider."

But he gave no details or an exact date for taking the measures.

The car tariffs were the target of a Trump tweet on Monday.

"When a car is sent to the United States from China, there is a Tariff to be paid of 2 1/2%. When a car is sent to China from the United States, there is a Tariff to be paid of 25%," Trump tweeted.

"Does that sound like free or fair trade. No, it sounds like STUPID TRADE — going on for years!"

Asia markets — hammered along with global equities by the trade row in recent weeks — rallied in response to the speech on Tuesday.

"Asian markets are happy, US and European markets are likely to be happy too, but it’s unlikely to generate the same optimism in Washington," said Christopher Balding, a Peking University economics professor.

"The tone was conciliatory but Washington is bargaining for action, not promises."

International Monetary Fund MD Christine Lagarde congratulated the Chinese leader on his commitment to openness in a speech to the forum.

The measures he laid out, such as "removing caps, reducing barriers", were "very specific", she told the Boao Forum, an Asian version of the World Economic Forum, which drew global leaders to Hainan this week.

Beijing’s restrictions on foreign ownership in the automotive sector have forced foreign companies to partner with Chinese firms and share their technology.

Tesla CEO Elon Musk asked for Trump’s help on the issue this year, alluding to the obstacles his electric car maker has faced to producing in China.

Xi said those restrictions would be liberalised, pledging "to quickly relax restrictions on foreign shareholding, especially the restrictions on foreign investment in the automobile industry".

The threatened tariff war was spurred by a US Trade Representative investigation into China’s intellectual property practices, which alleged wide-scale theft and forced technology transfers.

Xi pledged specific measures to address concerns on intellectual property protection.

"This year, we will reorganise the State Intellectual Property Office to strengthen law enforcement," he told the forum.

"We encourage Chinese and foreign companies to carry out normal technical exchanges and cooperation to protect the legitimate intellectual property rights of foreign-funded enterprises in China," he said.

Pledges on cars and intellectual property were accompanied by a promise to push through reforms in the financial services industry, which would open up to more foreign participation — reforms first announced last year.

However, Chinese officials have promised many of the measures in the past with little action — and Washington says it has grown tired of China’s unfulfilled pledges, while the EU Chamber of Commerce in China summed up the exasperation last year as "promise fatigue".

The US has slapped tariffs on imports of steel and aluminium, followed by planned levies on $50bn worth of goods from China over Washington the allegations of intellectual property theft.

China retaliated by unveiling planned levies on $50bn worth of major US exports, including soybeans, cars and aircraft.

Trump then threatened to impose more tariffs on $100bn worth of Chinese goods, prompting Beijing to warn that it would stand firm and punch back with great strength.

But Trump suggested on Sunday that he saw an end to the dispute, saying on Twitter that he would "always be friends" with Xi and that "China will take down its trade barriers because it is the right thing to do".

On Monday, however, China’s foreign ministry warned that trade talks with the US were "impossible" under current conditions.