Yahoo Finance China softens tone about trade, officials say they want what U.S. wants
As Washington and Beijing continue the year-long tug-of-war on trade, top Chinese officials are sending out some positive signals by emphasizing the common ground on both sides.
Chinese regulators promised to further open up the world’s second-largest economy at the China Development Forum, a state-hosted conference in Beijing. They also directly addressed central issues the U.S. negotiators have been pushing, shifting away from its tough stance when trade talks first started one year ago.
“The key asks the U.S. has put in the negotiation with China fit into our own needs of reforms,” said Lou Jiwei, the chairman of China's National Social Security Fund and the former Finance Minister, on Sunday.
Lou went on to explain that what the U.S. wants, including the protection of intellectual property, open access to the market, and removal of industry protectionism policies are “consistent with our current reform direction. We’ve been trying towards this direction for years and the progress we’ve made is obvious to all,” Lou said.
China has been setting up IP courts across the country since 2014. In March, it passed the new foreign investment law, which aims to create a level playing field for domestic and foreign firms. The new law bans forced technology transfers, a sticky issue during the year-long trade dispute.
Although China said it’s not under any outside pressure to accelerate the domestic reform, the newly-introduced measures to protect foreign companies are widely seen as efforts to facilitate trade talks with U.S. negotiators, who are expected to meet this week in Beijing and in Washington again in early April to finalize a deal.
Opening financial sector ‘for the sake of China’
One of the bright spots China has been talking about is the opening up of its financial sector. The $40 trillion financial market has been under heavy regulation and capital control. The discussion to grant foreign institutions greater access started before the trade war, but things have sped up in the past year. American Express, for example, won approval to be the first U.S. card network to clear card payments in China in November.
Yi Gang, the governor of China’s central bank, admits the reform faces some internal resistance from people who worry that giving foreign players a greater role could harm the stability of the domestic financial system. But Yi believes foreign competitors can benefit Chinese people.
“Given the experience of our opening history, we think that every field that are opening, it's getting more competitive, better services, and any field that are closed, it's less efficient, it's more backwards,” said Yi at the forum.
China also doesn’t want to seem like it’s caving to the U.S. and that it’s opening up in exchange for U.S. recognition. “Chinese government has this roadmap and timetable,” said Yi. “They are going to do it for the sake of China.”
But another top financial regulator seems to care more about what the U.S. has to say. Fang Xinghai, the vice chairman of the China Securities Regulatory Commission (CSRC), said China's financial sector is well prepared for opening up and signals more could come.
"The CSRC is in charge of the securities, public fund and so on. We have no problem opening up and competing in this field. If the U.S. has such a complaint that we’re too slow, we can also speed up,” Fang said. “Let’s wait and see what will happen."
Krystal Hu covers technology and China for Yahoo Finance. Write to her via krystalh@yahoofinance.com
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