Defiant Xi Jinping Blows Chance to Make Major Announcement on US-China Trade Relations
The major Asian stock indexes finished lower and U.S. stock futures indexes retreated from their session highs on Tuesday as Chinese President Xi Jinping failed to deliver anything positive in his much-anticipated speech at the 40 th anniversary of the country’s economic reforms. His speech actually leaned toward the defiant side, raising questions as to whether current U.S.-China trade negotiations will end with a deal before the March 1 deadline.
In his speech, Xi Jinping stood up to international calls for changes to his country’s economy by stating, “No one is in a position to dictate to the Chinese people what should or should not be done,” Xi said in Mandarin Chinese during his speech, according to an official translation broadcast through state media.
Xi Calls for China to “Stay the Course”
“What to reform and how to go about the reform must be consistent with the overarching goal of improving and developing the system of Socialism with Chinese Characteristics and modernizing China’s system and capacity for governance,” the Chinese leader added. “We will resolutely reform what should and can be reformed, and make no change where there should and cannot be any reform.”
Commemorates the 40 th Anniversary of China’s “Reform and Opening Up”
“The past 40 years eloquently prove that the path, theory, system and the culture of Socialism with Chinese Characteristics pioneered in the wake of the Third Plenary session of the 11 th (Communist Party of China) Central Committee by the Chinese people of all ethnic groups rallying under the leadership of the CPC are completely correct, and that CPC theory line and policy that have since taken shape are completely correct,” Xi said.
“The past 40 years eloquently prove that China’s development provides a successful experience and offers a bright prospect for other developing countries as they strive for marketization,” he added.
No Offer of Fresh Commitments to Open or Stimulate Trade
President Xi Jinping offered no fresh commitments to open or stimulate China’s economy in a keynote speech, to the disappointment of investors. Global equity markets slumped after the Chinese leader made no mention of new initiatives. That contrasted with recent news about lowering automobile tariffs and purchasing U.S. soybeans.
Time is Running Out…
Some are saying that Xi Jinping may be saving his biggest pronouncements for negotiations with the U.S. on trade. However, investors would really like to see Xi speed up restructuring of the economy. This could have significant consequences for whether the U.S. reaches a trade deal with China by the end of its 90-day tariff ceasefire.
In some eyes, Xi Jinping may have blown a great opportunity to change the direction of China’s economy and industrial policies. By not making any major new announcements, the odds of an escalation of the tariff fight at the end of the 90-day negotiation period just increased.
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