China Attempts to Defuse Trade War

President Xi Jinping pledges reform including greater access to China's manufacturing and financial sectors.

In stark contrast to Trump's bullying remarks, China’s Xi Promises to Ease Foreign Access.

In a speech that officials had billed as a major address, Mr. Xi said Tuesday that plans are under way to accelerate access to the insurance sector, expand the permitted business scope for foreign financial institutions and reduce tariffs on imported automobiles and ownership limits for foreign car companies.

Throughout his 40-minute address, Mr. Xi never mentioned the trade friction with the U.S. or President Donald Trump. His remarks seemed designed to offer some policy initiatives, if not concessions, while drawing a contrast with President Trump’s “America First” agenda and portraying China as a steady global partner committed to the international trade order.

“In a world aspiring for peace and development, the Cold War and zero-sum mentality look even more out of place.” Mr. Xi told the Boao Forum, a government-backed gathering of business and political leaders on the tropical island of Hainan.

“Putting oneself on a pedestal or trying to immunize oneself from adverse developments will get nowhere,” he said.

President Xi said China would increase imports, improve the protection of intellectual property and provide a more transparent, rule-based environment for foreign investment. He also pointed to Beijing’s announcement late last year that it would raise foreign-equity caps in the banking, securities and insurance industries, and promised those measures would be implemented.

“We have every intention to translate the measures into reality sooner rather than later, Mr. Xi said, though he didn’t provide a clearer timetable for those or the other measures announced.

The Financial Times does not think much of the speech.

Most of the measures he mentioned had been previously announced and the Chinese president offered no new details about when or how they would be implemented, increasing the chances that the world’s two largest economies could be embroiled in a trade war as soon as June.

Xi's speech may be meaningless chatter, but futures are up significantly once again.

If this rally attempt fails, a quick, deep plunge is likely.

Mike "Mish" Shedlock

Comments (32)
No. 1-32
thimk
thimk

well did the emperor mention abandoning the man made islands in the Spratlys that expanded their territorial reach or allowing their currency to float ?

Wagen
Wagen

"This is Trump giving him a huge opportunity to look like a powerful, sensible world leader vs Trump’s petty, reactionary, deluded blowhard"

Since when Hillary is allowed to post articles on Mish Talk?

Deal with it, you were number 2. And now give the password back to Mike Shedlock.

Roger_Ramjet
Roger_Ramjet

While the "world" may be aspiring for peace and development, the US and some of its western partners seem hell-bent on confrontation, if not war, throughout the world. It's the downside of electing a dimwit and giving him an $800 billion military budget. Appreciate seeing cooler heads trying to blunt Trumps bull-in-a-china-shop approach to problem solving.

whirlaway
whirlaway

Shouldn't the headline be, "Trump Tariffs Force China to the Negotiating Table" rather than "China Attempts to Defuse Trade War"??

whirlaway
whirlaway

Strange bedfellows, huh? Mish and his ilk are in bed with the neoliberal Democrats who are pro-SHAFTA/NAFTA, pro-TPP etc. And Hillary and the neoliberal Democrats are in bed with the neocons thirsting for more war. One big happy family, eh?! :-)

whirlaway
whirlaway

"If this rally attempt fails, a quick, deep plunge is likely."

You mean like what the ZH headlines mean when they say - "XYZ plunges ..." etc.??

Then you go and check the numbers and see that XYZ is down only 0.15% or something. Or actually up! LOL

niceconstable
niceconstable

Oh. So there isn't free trade. China couldn't reduce tariffs if they didn't have tariffs. Shock to Mish and many commentators. It wouldn't have happened if not for Trump. North Korea and China would not have changed a single thing if not for Trump. But it is bad because, well, Trump is a "bully" and a "blowhard".

niceconstable
niceconstable

I wouldn't trade this market on trade war news. It seems there is a short term target above where prices are at the moment. The market is likely to go down a lot farther than it has and isn't likely to bottom until Autumn 2019.

Carl_R
Carl_R

There are a few truths here. First, no one wins an actual trade war. Second, it's difficult to get real concessions unless the other side thinks you are serious. Third, Trump does an amazing job of portraying himself as a fool and a lunatic. But, that leads us to the important questions. Is he really a lunatic? Is he really serious about starting a trade war? Or, is this just a bluff? He looks and acts so much like a nut case, it's hard to know. Maybe he will get real concessions out of China.

whirlaway
whirlaway

"Free Trade is the economic equivalent of Jonestown Kool-Aid. We are all being forced to consume it even though we know it’s killing us."

RonJ
RonJ

Looks like Jim bruce is being petty over Trump's success.

Kinuachdrach
Kinuachdrach

Maybe President Xi is reacting to the non-stop barrage of well-reasoned criticism from Libertarians across the US and around the world demanding that China eliminate all tariffs (and, more importantly, non-tariff barriers) in order to make poor Chinese wealthier. Oh wait .....

RonJ
RonJ

" It's the downside of electing a dimwit and giving him an $800 billion military budget. Appreciate seeing cooler heads trying to blunt Trumps bull-in-a-china-shop approach to problem solving." Kim Jong Un is now apparently talking about a real possibility of shutting down his nuclear weapons program. Such was thought to be an impossible idea just weeks ago.

killben
killben

Speaking is always easier. Let us see the action that follows.

Cocoa
Cocoa

So basically, Trump is winning this too, by looking crazy he is scaring people into corners. Let's see if he starts World War 3 in Syria

abend237-04
abend237-04

China is in it's 38th year of talking while shipping. It's working for them; why change it now?

Carl_R
Carl_R

If free trade is bad, why not restrict trade at all levels? Ban stores. Everyone should grow their own food, make their own clothes, and build their own phones. The fact is that everyone knows that trade is good, but they want to find someone else to blame when they don't like an outcome.

truthseeker
truthseeker

This is an extremely tiny opening that Trump could so easily screw up if he pats himself on the back and says something stupid. We need a humble President as this is a process that will take fair amount of time to play out in a way that lets Xi save face. China really needs this outside capital investment to continue as Xi knows these capitalists know how to invest for a return last year of 9%.

truthseeker
truthseeker

Need to add the 9% last year was accomplished with very little risk.

stillCJ
stillCJ

Editor

I think it is hilarious that so few people understand what is to me Donny's obvious and successful negotiating style. When he wins, the haters just ignore it and whine about the next thing.

channelstuffing
channelstuffing

beijeng realizes it cannot possibly compete with the world reserve currency and on ulimited supply of printer ink,The fed will simply print them into extinction

AWC
AWC

Ultimately, it seems no nation's leader wants to take the rap for collapsing markets and destructive trade wars. Maybe one day these micro managing idiots will understand that free markets cannot live in manipulated captivity. Of course, it took the apparatchiks in the USSR 70 years to learn that lesson.

Ambrose_Bierce
Ambrose_Bierce

rope-a-dope

Wagen
Wagen

"If free trade is bad, why not restrict trade at all levels"

This is one of the most common Strawman arguments radical idealogical groups nowaday use to make debate opponent look bad. By trying to argue that - if opponent's views would be amplified to the far extremes, then things just wouldn't be able to function properly and society would collapse. But the opponent never was suggesting to go with extremes. Hence Strawman.

To demonstrate my point (if you are a libertarian with no sense of humor; or are someone like @SleemoG who somehow knows how bad herpes can be for their sense of humor, then under no circumstances watch the video below). It uses the same Strawman argument, but this time against libertarian ideas:

That is the reason why no one should take Mish's blog seriously, because he feels tempted to come out as "pure libertarian" and anything else is wrong (dollar needs to be backed by gold because anything else is not sustainable, tesla will be bankrupt because once subsidies disappear no one will buy those cars, reciprocial trade will cause trade wars, any atrocity in Syria must be a false flag ...).

What if not? What if fiat currencies will be around forever? What if Tesla will not be bankrupt once EV subsidies get eliminated in a year? What if atrocities in Syria are really comitted by Syrian government and is not a false flag? It is called "suffering from confirmation bias" where one has strong beliefs and whenever the conditions supporting those beliefs change he rather choses to find new excuses to reconfirm the same old beliefs instead of changing them.

Just like today underplaying any Trump involvemen in China opening its markets. I am wondering what excuse Mish will find in a year when EV subsidies will be gone and Tesla will actually not be bankrupt? Will Mish come up with new conspiracy theory why Tesla has survived?

P.S. In the past I used to think that I am libertarian. Now I don't feel a need to label myself with any particular idealogy that prescribes pure socialism, pure free-trade, pure "what not". In long term that is the best choice anyone can do for their health and finances.

truthseeker
truthseeker

Mish I tried to log in on conversations to ask u this but could not. Just saw Trump at new high n job approval. My question has to do with Russia. Just yesterday I mentioned the possible dangers of new sanctions on Russia. Well today there is another article n the WSJ “Russian Markets Recoil On Sanctions” on the first page of the business section. Many investors were surprised at the severity of the sanctions which targeted senior Russian government officials as well as some of Putin’s closest business allies and their companies. Nobody is talking about this I don’t think. I just wonder have u read this and if so I’d like to hear your comments.

Wagen
Wagen

A libertarian denounces to invest in US markets, because US markets are rigged. Hey, but investing in rigged Russian markets is fine?

Let me list the risks here:

  1. Significant portion of population is still acceptable to the idea of communism ( https://www.rt.com/news/415883-putin-communist-ideology-christianity/ ). If that is not risk enough, then
  2. Major companies are still majority state owned in Russia (Aeroflot, Gazprom, Rosneft ...). If that is not enough of risk, then
  3. Mish and especially Zerohedge is telling us that US has warmongers in the office and things may get ugly due to Syria. If things do get ugly, then care to guess what will happen with Russian based assets held by Westerners? And if even that is not risk enough, then
  4. Corruption in Eastern Europe, especially in Russia, Ukraine, Belarus is way worse than anywhere else in Western World. And if that is not enough, then
  5. Most Russian enterprises are dependent on commodity markets. If the deflation comes, then don't expect returns.
Mike Mish Shedlock
Mike Mish Shedlock

Editor

@Wagner "A libertarian denounces to invest in US markets, because US markets are rigged. Hey, but investing in rigged Russian markets is fine?"

Hey @wagner, I never "denounced" US stocks. I will not have my position distorted. You are banned until May 1.

Mike Mish Shedlock
Mike Mish Shedlock

Editor

Word to the wise. Anyone putting words in my mouth that I never stated, may get 1 warning ban. Then a permanent one.

Kinuachdrach
Kinuachdrach

Democrats are scum! They really are!! Before the election, it looked like Putin & Trump could do a deal -- they are both patriots, concerned with the best interests of their own countries. But the Democrats destroyed that happy possibility with their nonsense about Russian "interference" causing the well-deserved defeat of Crooked Hillary. A wonderful opportunity to get the US & Russia working together has been lost, perhaps forever, because of the glaring dishonesty & stupidity of Democrats. Mish is always on about cutting the US defense budget. This was the opportunity to achieve that! And the Democrats ruined it for you, Mish.

Wagner
Wagner

Let me find those words and put them back in your mouth so that you could at least try to remember.

  • Here is about Mish denouncing investing in US markets:

Now type in google "define: denounce". This is one of the definitions I got:

"denounce - inform against."

So what was the conclusion of your yesterday's post "Global Growth: Sputter, Stutter, Mutter". You used some cropped, unreliable "Citi Economic Surprise Index" chart to inform sarcastically that now is not the time to be in the US stock market. Again, you can play innocent with your "conclusions" of that and all other articles.

  • Here is about Mish agreeing that system is rigged:

"For those that say the system is rigged, I concur. In my assessment, central banks are largely responsible for a compression of “risk premia.”"

P.S. And censorship is so "unlibertarian". Just pay more attention what you post and you won't be called out by your readers to point out inaccuracies in your thinking. In fact, if you haven't noticed, then I didn't post anything under the "CPI Month-Over-Month -0.1 Percent, Year-Over-Year +2.4 Percent" article because you did not speculate in overconfident manner what will happen to the stock market.