Chinese President Xi Jinping will deliver a keynote speech at the Boao Forum for Asia on Tuesday.
- The speech comes at a time of heightened trade tensions between the United States and China.
- TD Securities thinks Xi may use the speech to open the door to begin trade negotiations with the United States.
Chinese President Xi Jinping will deliver a keynote speech at the Boao Forum for Asia today.
At a time of heightened trade tensions between the United States and China, there’s naturally going to be a lot of interest in what Xi has to say, especially among those in financial markets.
Sacha Tihanyi, Deputy Head of Emerging Markets Strategy at TD Securities, thinks investors are going to like what they hear.
“We would expect his speech to reiterate China’s stance that tariffs and anti-globalisation policies are not in the world’s best interest,” says Tihanyi.
“To this effect, we are likely to see a gesture towards opening and reform, which may offset some of the market’s negativity towards the ongoing US-China trade tensions.”
Specifically, Tihanyi says Xi may use the speech to open the door to begin trade negotiations.
“Should this include announcements targeting US criticisms towards market access or investment in China, we may see a step towards the building of good will and increased US access,” he says.
“We still believe… that this will be one of the possible ‘carrots’ that China will present in line with various ‘stick’ threats.”
The United States and China have announced proposed tariffs on imports from either nation in recent weeks, creating renewed concern that this tit-for-tat trade spat may escalate into a full-blown trade war between the world’s largest economies.
Sentiment towards whether this is likely has swung wildly in recent weeks, often reflecting contradictory statements from either side on the outlook for trade policy.
Today’s speech from Xi carries to potential to add clarity for investors, either for the better or worse.