Stocks leap as China's president eases trade fight fears

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China will continue to support free trade, President Xi Jinping said Tuesday when meeting with International Monetary Fund Managing Director Christine Lagarde at the Boao Forum for Asia annual conference.

Promising a "new phase of opening up", Xi said China would "considerably lower" tariffs on cars and other products this year, take measures to liberalize automobile investment, and protect intellectual property - all areas that have been high on the list of demands by Washington.

Factory wages in China have risen at the highest pace in emerging Asia, so other developing countries with lower costs have begun to steal away investment and jobs, helping to promote industrialization and boost growth at home, it said.

"We're encouraged by the words, but we want to see concrete steps and concrete action", press secretary Sarah Sanders said shortly after Trump praised Xi's "kind words" and "enlightenment".

"We've been clear with the Chinese government in areas that are of concern to USA workers, United States companies, and the overall trade balance".

Still, Ezell said he thought Xi's speech suggests that Trump's aggressive moves might be working. "All of the things that we've been saying are wrong".

The US administration's current confrontational strategy toward China links trade more closely with national security.

At the same time, Ezell and other longtime China observers cautioned that Beijing has promised in the past to open its market and curb hardball tactics to acquire foreign technology without following through on those pledges. The march of history towards economic liberalisation was irreversible, he said at another point, restating China's commitment to free trade.

Global rating agencies Moody's Investors Service and Fitch Ratings said on Wednesday that proposed USA tariffs will have limited direct impact on China's economy and a negotiated solution is most likely.

The Geneva-based trade body said Tuesday that China has requested 60 days of consultations with the United States to resolve the dispute. "For domestic purposes, it's a very good tool that doesn't create an image that China is yielding because of American pressure".

"I haven't seen any unsafe interaction", Koehler said, adding that problems could be avoided "if all the navies are operating in accordance with the worldwide norm and law".

"The question is whether Washington will accept more delay and continue with the rhetoric rather than action".

Chinese investment in the USA plunged a year ago as tensions between the two countries mounted.

The additional tariffs are being considered "in light of China's unfair retaliation" against earlier US trade actions, which included a proposed $50 billion worth of tariffs on Chinese goods, Reuters quoted Trump as saying in a White House statement.

The Trump administration has since said it could retaliate on a further $100 billion (Rs 6.49 lakh crore) worth of imports, which would leave Beijing, having ratcheted up public anger over the move, with little room to respond without hurting itself, for instance by threatening to dump U.S. treasuries.

"But China has shown it is willing to meet hard with hard ..." And that was before a trade fight erupted between the two countries.

US President Donald Trump has also asked his staff to identify new ways to limit Chinese investment in the US, part of a broader response to alleged theft of intellectual property that also includes plans for tariffs on $50bn worth of Chinese imports.