Speaking at the Boao Forum, sometimes known as “Asian Davos”, Chinese President Xi Jinping announced four major areas of reform in opening up the market. First, the government would “significantly” ease market access, lowering restrictions for foreign investment in a number of Chinese sectors. In the financial industry, Xi reinforced the measures announced in late last year to liberalize the ratio of foreign-capital shares in banking, securities, and insurance industries. The government would also reduce restrictions automobile, shipping and aviation industries, among which restrictions on foreign investment in the automobile industry would be lowered as soon as possible
Second, China would create a better investment environment, strengthening adherence to international economic and trade rules, increasing transparency and opposing monopoly, so as to attract foreign capital. More importantly, it aims to complete the revision to the negative list for foreign investors in the first half of the year.
Third, through reorganization of the State Intellectual Property Office, the authority strives to strengthen protection of intellectual property rights though stricter enforcement of law.
Fourth, Xi stressed that China does not aim at pursuing a trade surplus. Instead, it plans to expand imports and promote current account balances. To achieve this, the government would reduce tariffs on autos and some other products. It would also accelerate the process of joining the WTO’s “Government Procurement Agreement”.
The abovementioned measures are nothing new. Indeed, since the 19th Party Congress, the government has in various occasions pledged to ease restriction on the establishment if foreign financial institutions, encourage technological exchanges between Chinese and foreign corporate and improve protection of intellectual property rights, and expand imports. The government has announced in January the organization of the first “China International Import Expo” this November. At the Boao speech, Xi mainly reinforced the importance and urgency of implementing these reforms. However, he has still refrained from offering the timeline of them. We believe his speech aims mainly at cooling down the intensified tensions with the US on trade.