Rajiv Biswas, the chief economist for the Asia-Pacific region at IHS Markit, said Chinese President Xi Jinping’s speech at the Boao Forum earlier today sets a “very positive tone for lowering U.S.-China trade tensions.”
At the opening bell, the Dow Jones Industrial Average rose 360 points to 24,335 on Xi’s comments.
The tensions include a series of trade tariff salvos from both the U.S. and China over the course of the past month. U.S. products that China said it will impose tariffs on include soybeans, corn, wheat and whiskies as well as plastics, tobacco and certain types of automobiles. The U.S. said it would impose tariffs on Chinese steel and aluminum as well as medicine, machinery (including ones for textiles) and engines.
Last week, the U.S. Trade Representative said in a statement that it “has determined that the acts, policies and practices of the Government of China related to technology transfer, intellectual property and innovation covered in the investigation are unreasonable or discriminatory and burden or restrict U.S. commerce.”
In the fashion segment, concerns over intellectual property rights have been at the core of a decades-long battle by brands against Chinese-made counterfeits and knock-offs. The EU’s Intellectual Property Office estimates the sale of counterfeit goods totals $500 billion a year globally.
At the Boao Forum, Xi said he wants to open up the Chinese economy and better enforce intellectual property rights for foreign companies as well as lower tariffs on automobiles.
Biswas described Xi’s speech as an “extremely constructive” signal that China “will lower tariff barriers, work hard to boost imports and take measures to enforce intellectual property rights. President Xi also pledged China’s commitment to globalization as well as trade and investment liberalization.”
The chief economist said Xi’s speech could create a “very good platform to launch U.S.-China dialogue at the WTO to find a deal on intellectual property rights that will address U.S. concerns. If a U.S.-China deal can be struck on intellectual property rights at the WTO, this could pave the way for the U.S. withdrawing its proposed Section 301 tariff measures on China, allowing China to also withdraw its retaliatory tariff countermeasures.”