Foreign governments and businesses were hoping Chinese President Xi Jinping would use the opening of China’s first international import expo to make specific announcements about reforms for trade and investment. But that did not happen, and some saw the measures Xi rolled out Monday as falling short of expectations.
“We were waiting today for President Xi to inform the world about the reform that will take place in the coming days, but what we wanted to hear, (such as) the complete steps on implementing the reform and a clear timetable did not appear,” said Carlo Diego D’Andrea, vice president and Shanghai Chapter chairman of the European Chamber of Commerce in China.
In his speech, President Xi said China would relax barriers to access in areas such as financial services, agriculture, mining and education and boost the consumption of imported goods as well as lower tariffs. He also said China would create a better business environment with a sound regulatory system, including bolstering punitive measures for violations of intellectual property rights.
On the issue of protection of intellectual property rights, Xi admitted China has room to improve, but he also followed up by saying those who complain about Chinese commercial practices should not hold a flashlight that only exposes others and not themselves.
Xi did not mention the United States directly or President Donald Trump’s tariffs, but some of his remarks appeared to be directed towards Washington.
As trade frictions with the United States continue, Xi pledged to boost imports and said China would import as much as $30 trillion in goods and $10 trillion in services during the next 15 years. Last year, China imported $1.84 trillion in goods and $458 billion in services.
“China will lower tariffs, make customs clearance more convenient, reduce institutional costs in the import sector, and accelerate the development of new business models,” Xi said.
Although the China International Import Expo was planned well before trade tensions with the United States began to peak, some believe Beijing is using its hosting of the exhibition as an attempt to shift the country’s growing buying power elsewhere.
China’s middle class is nearly as large as the entire population of the United States.
Thousands of foreign companies are participating in the expo. Some countries, such as Kenya, even have national pavilions at the event to help attract interest in their products and to boost ties. Kenya’s President Uhuru Kenyatta was among several leaders who spoke at the opening ceremony Monday in addition to Xi.
Kenyatta was optimistic about trade opportunities with Beijing. The Kenyan president noted how China is his nation’s biggest trading partner, with trade growing from $471 million in 2007 to $4 billion in 2017.
“This trade, however, was skewed heavily in favor of China,” Kenyatta said, noting concerns similar to those coming out of Washington. “It is important therefore to correct the trade imbalance and enable a fairer share of trade.”
Xi voiced support for CIIE host city Shanghai as a center for technology and innovation, noting that it would continue to take the lead going forward.
China wants Shanghai to be one of the world’s leading global financial centers by 2020 and Xi expressed his support for the Shanghai stock indexes’ technology and innovation bourse that was launched in 2015, but has had lackluster appeal.
Tang Xuan, an assistant to the chairman of Nanliv Nano Technology, which is based in Shanghai, hoped the comments would give the index a boost.
“With Chairman Xi’s support, the high-tech innovation stock index may likely become more open and more active in future, which will perhaps spell good news for companies like ours and provide a stepping stone for us before we list on the main bourse,” Tang said.
But analysts say boosting confidence and growing the country’s attractiveness for investment will take more than just soundbites or massive trade shows.
Despite all of its proclaimed allegiance to openness and progress during the past four decades, China remains one of the world’s most protectionist economies. The Organization for Economic Cooperation and Development ranks China 59 out of 62 countries in terms of openness for foreign direct investment.
D’Andrea said the expo will definitely help many countries reduce their trade deficits with China, but it will not address the country’s internal reform deficit.
“At the moment, the lack of internal reform, plus the external pressure made by the Trump administration and the trade dispute behind the U.S. and China may put on hold further investment from European countries into Chinese markets,” D’Andrea said.