China President Xi Jinping's keynote speech at the Boao Forum for the Asia Annual Conference 2018. Photo: AFP
China President Xi Jinping's keynote speech at the Boao Forum for the Asia Annual Conference 2018. Photo: AFP

Flanked by two giant television screens and bathed in a sea of blue light, President Xi Jinping chose his words carefully. But at the end of his speech at the Boao Forum on the idyllic island of Hainan, there was no doubt who they were aimed at.

Amid the promises and anti “Cold War” rhetoric, there was one overriding theme that Xi weaved through his keynote address to a packed audience of global leaders.

Slicing through the jargon, it was that China was a safe and reliable partner while the United States was not.

Making his first public speech since the escalating tit-for-tat trade dispute with the US, he talked about further opening up the world’s second-largest economy at what has become known as Asia’s Davos.

“China’s door of opening up will not be closed,” he said in the stunning southern China resort on Tuesday. “Human society is facing a major choice to open or close, to go forward or backwards.

“In today’s world, the trend of peace and cooperation is moving forward and a Cold War mentality and zero-sum game thinking is outdated,” he told the forum. “We must [always] refrain from seeking dominance [by rejecting] power politics.”

Planned tariffs

Obviously, the last reference was directed at US President Donald Trump. During the past two months, he has targeted Chinese imports and announced planned tariffs amounting to US$50 billion amid concerns about a spiraling trade deficit and intellectual property rights issues.

Last week, Beijing hit back with similar proposed duties on an array of US products and vowed to stand its ground in a row that threatens to spill over into the broader global economy.

Against this backdrop, Xi talked about “respect” and “dialogue” to solve problems and the dangers of building “barriers” when it comes to trade across the planet.

“We need to treat each other with respect and as equals, respect each others’ core interest and major concerns, and follow a new approach to state-to-state relations featuring dialogue,” he said. “We live in a time with an overwhelming trend towards openness and connectivity.

“[We must] stay as determined as ever to build world peace, contribute to global prosperity and uphold the international order,” he added.

But within the broad brushstrokes, there were layers of substance and promises.

Xi pledged to lower imported car tariffs this year, and open up further the financial and insurance industries, which indirectly address complaints by Washington in the simmering trade spat.

“China does not seek a trade surplus. We have a genuine desire to increase imports and achieve a greater balance of international payments under the current account,” he said, according to a translation of the speech reported by the state-owned news agency Xinhua.

“[We will] quickly relax restrictions on foreign shareholding, especially the restrictions on foreign investment in the automobile industry. And we hope developed countries will stop imposing restrictions on normal and reasonable trade of high-tech products, and relax export controls on such trade with China,” he added.

Apart from “significantly” lowering import tariffs for cars and other products, Xi also guaranteed a crackdown on intellectual property rights infringements.

This has become a crucial issue and not just in the White House. Global companies feel they have been cajoled into handing over detailed tech specs, or IPR, before they can get a business foothold in the country.

“[In 2018,] we will reorganize the State Intellectual Property Office to strengthen law enforcement,” Xi told the forum.

Foreign-funded enterprises

“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 added.

Still, most of these promises have been made before after a succession of working papers, which are probably gathering dust in an anonymous gray government building in Beijing.

Last year, the European Union Chamber of Commerce in China spelt out its frustration with Xi’s administration with two, succinct words: “promise fatigue.”

Indeed, what actual concrete steps are taken after this speech will be closely followed by the movers and shakers in the audience, including Christine Lagarde, the managing director of the International Monetary Fund.

“I read much of that speech as being about cementing China’s regional leadership as an open country fostering free trade and development,” Jim McCaughan, the CEO at Principal Global Investors, a global leader in institutional asset-management, told Bloomberg Television. “The idea that there is going to be a quick fix on this is unlikely.”

Sounds like another dose of “promise fatigue.”

Read: Fallout from US-China trade war would hit major global firms

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