Chinese President Xi vows to open up economy, reduce tariffs by year-end

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London (Reuters): Global equity markets rallied and the Japanese yen fell on Tuesday as Chinese President Xi Jinping’s promise to cut import tariffs eased investor concerns about an escalating U.S.-China trade row.

Russian assets extended Monday’s slide as investors digested the new round of U.S. sanctions targeting the country’s tycoons. The Russian ruble plunged more than 4 percent against the dollar to its lowest since late-2016.

The speech at the Boao Forum for Asia in the southern province of Hainan had been widely anticipated as one of Xi’s first major addresses in a year in which the ruling Communist Party marks the 40th anniversary of its landmark economic reforms and opening up under former leader Deng Xiaoping.

Xi said China would raise the foreign ownership limit in the automobile sector “as soon as possible” and push previously announced measures to open the financial sector.

“This year, we will considerably reduce auto import tariffs, and at the same time reduce import tariffs on some other products,” Xi said.

He also said, “Cold War mentality” and isolationism would “hit brick walls”.

Chinese officials have been promising since at least 2013 to ease restrictions on foreign joint ventures in the auto industry, which would allow foreign companies to take a majority stake.

Chinese Vice Premier Liu He promised at the World Economic Forum in January that China would roll out fresh market openings this year, and that it would lower auto import tariffs in an “orderly way”.

Foreign business groups welcomed Xi’s commitment to reforms, including promises to strengthen legal deterrence on intellectual property violators, but said the speech fell short on specifics.

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