China’s Premier Li Keqiang said the country will “not be led by emotions” in a potential trade war with the US as he pledged to open China’s market up even further.
In a press conference on the last day of China’s annual legislative meeting, the National People’s Congress, Li responded to a range of questions covering a potential trade war with the US, the position of Taiwan, and opening up the country’s economy.
Trade war with the US: Li: “What we hope is for us to act rationally rather than being led by emotions. We don’t want to see a trade war … There’s no winner in a trade war.”
Context: The US is expected to announce tariffs on $US60 billion of Chinese goods and technology this week, which could spark a trade war after earlier tariffs on steel and aluminium that were targeted at China. After tariffs, Trump wants to deal with intellectual-property theft in China. Li responded today by saying that “intellectual property rights will be better protected.”
Opening China’s market: Li: “With China’s economy so deeply integrated to the international economy, shutting the door would only block China’s own way… If there is one thing that will be different from the past, that will be that China will open even wider.”
Context: Li said domestic and foreign companies will soon be able to compete on “fair terms” in China, signifying a shift to a more open market. He also said that China plans to cut taxes for imported goods, have zero tariffs on drugs, and will open up access to its manufacturing sector.
Listing Chinese tech companies in China: Li: “What we plan to do is improve the relevant conditions for them to return to the Asia market.”
Context: Two of China’s biggest tech companies are listed overseas – Alibaba in the US and Tencent in Hong Kong, and Xiaomi is set to soon list in Hong Kong. China wants domestic investors to be able to profit from these companies and Alibaba is reportedly planning a second listing in mainland China.
An independent Taiwan: Li: “We must not tolerate any attempt or proposition for Taiwan independence. We should not tolerate any attempt by an external force to use Taiwan as a card to cause difficulties for cross-strait relations.”
Context: Earlier on Tuesday President Xi Jinping gave a hardline speech saying China will not cede a “ single inch of our land.” It’s likely that these comments are referring to the Taiwan Travel Act that Trump signed into law on Friday. The law allows officials from the US and Taiwan to visit one another. China has been angered by the law as it sees the move as a step towards recognition of Taiwan as a country outside of the “one China” policy.