Xi Jinping Speech Makes Same Old Promises

I woke up to headlines saying the trade war is over, but I don't see anything said by Xi Jinping that wasn't said in various speeches by Chinese high level officials over the past 10 years.

Full text of remarks: 习近平出席博鳌亚洲论坛开幕式 发表主旨演讲|全文

The reports glossed over this paragraph:
Facing the future, we must respect each other and treat each other as equals. We must adhere to the five principles of peaceful coexistence, respect the social systems and development paths independently chosen by countries, respect each other’s core interests and major concerns, and engage in dialogue rather than confrontation and companionship but not in alliances. We will not engage in a zero-sum game between China and the rest of the world. We will not engage in a zero-sum game that respects you and wins you and loses. We will not engage in power bullying that uses our neighbors as ours, bullying the weak and weak, and properly manage and control contradictions and differences and strive to achieve lasting peace.
Facing the future, we must work together in a concerted effort to achieve win-win cooperation, adhere to the path of openness, mutual benefit and win-win progress, build an open world economy, strengthen cooperation within the multilateral frameworks of the G20, APEC and other multilateral frameworks to promote trade and investment liberalization. Facilitate the maintenance of the multilateral trading system, jointly create new technologies, new industries, new forms of business, new models, and promote economic globalization toward a more open, inclusive, inclusive, balanced and win-win direction.
Reports focused on these four paragraphs:
In expanding its opening up, China will take the following major measures.

First, greatly ease market access. This year, we will launch several landmark initiatives. In the service industry, especially the financial industry, the major measures announced in late last year to liberalize the ratio of foreign-capital shares in the banking, securities, and insurance industries must be ensured, and the opening up of the insurance industry should be accelerated, the restrictions on the establishment of foreign-funded financial institutions should be relaxed, and foreign-funded financial institutions should be expanded. The scope of business in China has broadened the scope of cooperation between Chinese and foreign financial markets. In terms of manufacturing, it has basically been liberalized. The reservations are limited to a few industries such as automobiles, ships, and airplanes. Now that these industries have an open foundation, the next step is to relax restrictions on foreign shareholdings, especially the restrictions on foreign investment in the automobile industry.
First, this isn't a big thing because it is late and not the U.S. goal. China should have already opened these industries and as things stand today, they aren't core concerns. China's offering to do what it should have done in its own interest years ago (at least a decade ago) and now it hopes that offering to do what it planned to do anyway will satisfy the U.S.
Second, create a more attractive investment environment. The investment environment is like air, fresh air can attract more foreign capital. In the past, China mainly relied on preferential policies to attract foreign investment, and now it must rely more on improving its investment environment. We will strengthen the interface with international economic and trade rules, increase transparency, strengthen the protection of property rights, persist in handling affairs according to law, encourage competition, and oppose monopoly. In March this year, we set up the State Market Supervision and Administration Bureau, and some other new institutions. We have made substantial adjustments to existing government agencies and resolutely eliminated the constraints that make the market play a decisive role in the allocation of resources and better play the role of the government. Institutional mechanism drawbacks. In the first half of this year, we will complete the revision of the negative list of foreign investment and fully implement the pre-entry national treatment plus negative list management system.
Another reform that is a decade late in coming.
Third, strengthen the protection of intellectual property rights. This is the most important content of improving the property rights protection system, and it is also the greatest incentive to increase China's economic competitiveness. In this regard, foreign-funded enterprises have requirements and Chinese companies have more requirements. This year, we will reorganize the State Intellectual Property Office, improve the enforcement of law enforcement, and raise the cost of illegal activities to the fullest extent to fully utilize the role of legal deterrence. 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. At the same time, we hope that foreign governments will strengthen their protection of intellectual property in China.
Another reform that is overdue.
Fourth, take the initiative to expand imports. Domestic demand is the basic driving force for China’s economic development, and it is also an inevitable requirement for satisfying the people’s ever-growing needs for a better life. China does not aim at pursuing a trade surplus, and sincerely hopes to increase imports and promote current account balances. This year, we will reduce vehicle import tariffs considerably, reduce import tariffs on some other products, and strive to increase the import of products with unique characteristics and advantages where the people’s needs are concentrated, and accelerate the process of joining the World Trade Organization’s “Government Procurement Agreement”. We hope that the developed countries will artificially stop artificially high-tech product trade from artificially restricting and liberalizing the export control of high-tech products to China. In November this year, we will hold the first China International Import Expo in Shanghai. This is a big platform. It will be conducted every year in the future. This is not a general exhibition, but a major policy announcement and action that we take the initiative to open up the market. Welcome friends from all countries to participate in China.
This is the fabled rebalacing that has never happened.

Xi has promised to do what was supposed to be done years ago. Whether it will happen is anyone's guess. Most likely the markets will force adjustments on everyone. What is surprising is that President Trump was elected and then he chose to shake up the global trading system. The more likely path was the U.S. would do nothing and then collapse in 10 to 20 years after the dollar system imploded and wiped out America's consumer economy, leaving it a small productive base from which to rebuild. The global financial system would be rebuilt with China at the center, as the U.S. replaced the indebted and hollowed out Britain.

If the trade war is over, it is because Trump decides he wants a win on paper or he was never really interested in reform, but in a fig leaf fulfillment of a campaign promise. Otherwise, the trade war is still on. Nothing in Xi's speech indicates a deviation from existing Chinese policy goals.

Update: Here's the report from a meeting of the Central Economic Work Conference in 2013, chaired by Xi Jinping. The same line about strengthening IP protections is there.

中央经济工作会议在北京举行 习近平李克强作重要讲话

We will vigorously develop strategic emerging industries and accelerate the optimization and upgrading of traditional industries. Create an environment so that companies truly become the main body of innovation. The government must do a good job in strengthening the protection of intellectual property rights and improving the taxation policies that promote enterprise innovation. Strengthen incentives and make good use of talents so that inventors and innovators can rationally share the benefits of innovation and break the bottleneck that hinders the transformation of technological achievements.
This one isn't about trade, but highlights the speed of Chinese reform:
Third, focus on preventing and controlling debt risks. It is necessary to regard controlling and resolving local government debt risks as an important task of economic work, combining short-term response measures with long-term institutional construction, and doing a good job of alleviating local government debt risks.
6. Constantly increase the level of opening to the outside world. It is necessary to maintain traditional export advantages, give full play to the role of exports of technology and large-scale equipment exports to related industries, create new comparative advantages and competitive advantages, and expand imports of equipment and technologies required for domestic transfer of structural adjustments. We must pay attention to institutional development and rule guarantees, accelerate the negotiation of free trade zones, and steadily advance investment agreement negotiations. Create a stable, transparent and fair investment environment and effectively protect the legitimate rights and interests of investors. Strengthen the macro guidance and services for going global, provide accurate information on foreign investment, and simplify procedures for approval of foreign investment. We will promote the construction of the Silk Road Economic Belt, step up the formulation of strategic plans, and strengthen the construction of infrastructure interconnection and interoperability. To build the 21st Century Maritime Silk Road, strengthen the construction of the sea lane interconnection, and tighten the bonds of mutual interest.
When the internal communications reflect a change in policy then we will know China has made significant changes.

Finally, there was this take by the financial markets: The stock market is cheering what China’s Xi ‘didn’t say’ on trade
China President Xi Jinping offered little in the way of concessions in Beijing’s trade flap with the U.S. But he didn’t escalate the situation, either. And that was enough to send markets off to the races, analysts said.
China doesn't engage in fiery rhetoric at the top. Sometimes it signals displeasure or favor with a country by changing the name of disputed territory. If Japan is favored over Russia, then disputed islands get the Japanese name instead of the Russian name, and vice versa. No attention is drawn to the change, but astute observers use it to pick up on policy shifts. Were Xi Jinping to give off even a hint of displeasure in his public comments, it would be a significant escalation in rhetoric.

Update: More sanity on Xi's speech. ZH: One Bank Explains How The Market Was Completely Fooled By Xi's Speech

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