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International relations

China seeks to accelerate trade talks with Japan, South Korea, EU

In Shanghai, Xi stresses need to combat unilateralism by 'tearing down walls'

Chinese President Xi Jinping delivers a speech at the opening ceremony of the second China International Import Expo in Shanghai on Tuesday.   © Reuters

SHANGHAI -- President Xi Jinping said China was willing to sign trade deals with more countries, as he pledged to further lower tariffs and transaction costs to boost imports into the world's second-largest economy.

In an address at the opening ceremony of the China International Import Expo in Shanghai on Tuesday, Xi said that China's huge middle income group provided "unlimited potential."

"The Chinese market is such a big one that you should all come and see what it has to offer," Xi told the gathering that included French President Emmanuel Macron and other foreign dignitaries.

In his speech, Xi said China was ready to sign more "high-standard" free trade agreements and accelerate the negotiation process of free trade deals with the European Union, Japan and South Korea. He added that he hoped the 16-nation Regional Comprehensive Economic Partnership (RCEP) could be signed soon. This is despite India's opposition to the deal on Monday.

The six-day expo is touted as a key diplomatic event for showcasing Beijing's commitment to economic liberalization. It comes amid a feud with the U.S. -- China's top trading partner -- over what U.S. President Donald Trump sees as unbalanced trade volumes and practices.

In a message that appeared to be aimed at Washington, Xi emphasized the need to stand up to unilateralism by "tearing down walls" and called on nations to embrace technological innovation as a means to develop their economies.

"Protectionism and unilateralism should be resolutely opposed to in a bid to jointly build a world economy of openness and cooperation," Xi said. "Efforts should be made on continuous reduction of trade barriers and further improvement of global value and supply chains to jointly nurture market demand."

Macron concurred with Xi, saying the trade war has already "hurt the world economy."

The French president said he recognized China's commitment to opening its markets, and urged Beijing to accelerate the process of enabling more foreign access to its economy, including participation in government procurement.

Held for the second year in a row, the expo has attracted over 3,000 companies from 150 countries. Last year, buyers agreed to commit to nearly $60 billion worth of deals

Xi's speech came nearly a week after concluding a key Communist Party meeting that reiterated the "centralized and unified leadership" in all aspects of life.

However, a European business group in China raised the alarm in August over Beijing's attempts to regulate the market through a social credit system where companies face the risk of penalty for failing to conform to rules that could include data disclosure.

"China's swing toward more party control has the raised the cost of doing business for foreign firms," Enodo Economics said in a recent note. The research company said random implementation of "murky" regulations and unannounced visits by fire safety or health inspectors were a norm. But such supervision has became "bigger" since Xi came into power in 2012.

Even so, for many, the promise of a growing middle income group estimated at 800 million people is hard to dismiss. The prospects for China's consumer market are the "most appealing," Stuart Tait, head of HSBC's commercial banking in Asia Pacific, said in an interview.

The London-based lender said in a report on Tuesday that five in nine Asian companies planned to expand intra-Asian trade with China, Japan and Australia.

"The shift toward higher quality goods and demand for services make China really an appealing market," Tait said.

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