China's Xi says opening brings progress, closure backwardness

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Some clarity may come today, when President Xi Jinping will give a speech at the Boao Forum For Asia, where he's expected to lay out China's approach to the trade dispute. Asian markets mostly rose but stayed within a narrow range in subdued trading Tuesday as global investors continued to weigh their fears about a possible trade war between the USA and China.

Amid our escalating trade war with China, President Donald Trump's top economic adviser, Larry Kudlow, tried to assure investors that, despite roiling stock markets, a "pot of gold" lies at the end of the dispute.

Speaking at the Boao Economic Forum in China, Xi pledged to "significantly lower import tariffs" for vehicles and "significantly broaden market access" for foreign companies, the Washington Post reported.

"China does not seek a trade surplus", said Xi to an audience of Chinese and foreign businesspeople.

Since the start of this week, the United States and China have been engaging in a tit-for-tat trade spat.

The growing battle of tit-for-tat exchanges of tariffs between the U.S. and China has raised fears of a possible trade war that could have a damaging economic impact globally. The stock market fluctuated in response to this news.

China fears DPP leader Tsai Ing-wen wants will push for formal independence, though Tsai says she wants to maintain the status quo and is committed to peace. "China´s reaction to Mr. Trump´s legitimate defence of the American homeland has been a Great Wall of denial despite incontrovertible evidence of Beijing´s illicit and protectionist behaviours", White House trade advisor Peter Navarro said in a commentary in the Financial Times on Monday.

China has promised to put a tariff on American soybeans if Trump goes through with his threatened tariffs on up to $150 billion in Chinese goods. The Chinese government has much more control over its economy than the USA, which would allow it to protect the public from factory closings or job cuts by forcing banks to support the industries hit by American tariffs. "When you are shut out of dollar funding markets, a lot of your business will just stop working", Saxo Bank's Garnry said, while cautioning Russia's smaller role in global financial markets would limit the wider fallout.

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Beijing's restrictions on foreign ownership in the auto sector have forced foreign companies to partner with Chinese firms and share their technology. The move prompted Mr Trump last week to threaten tariffs on an additional US$100 billion in Chinese goods, which have yet to be identified.

China has denied such allegations and responded in kind, mainly targeting products made by farm states that helped Mr. Trump win the election in 2016.

Treasury Secretary Steve Mnuchin said on CBS' "Face the Nation" that he didn't expect the tariffs to have a "meaningful impact on the economy" even as he left the door open for disruption. U.S. West Texas Intermediate (WTI) crude futures fell $1.48 to $62.06 a barrel, a 2.3 percent loss.

However it added a full-blown trade war "would have a more pronounced effect".

"There's nothing in trade law or trade customs to suggest that countries should have the same size tariff for each other's exports of the same good", Deardorff said.

Beijing, which has issued a $3 billion list of USA goods including pork and apples for possible retaliation, requested 60 days of consultations as a first step.

"We'll open up the economy according to our own pace", he said.

On Friday, China launched a World Trade Organization complaint against the United States, triggering a 60-day deadline for the two countries to settle the matter.