Envoy says China poised to open markets 'beyond expectations' as tough US tariffs loom

A Chinese envoy to the US promised easier access to China's markets for foreign investors, promising reforms "beyond expectations", as Washington moves to institute punishing trade and other sanctions against Beijing for rules that restrict foreign participants.

Will Trump back away from the brink of a trade war with China?

Speaking at a China General Chamber of Commerce USA event, New York-based Consul General Zhang Qiyue said barriers will be removed or eased for foreign investors in the country's financial sector and that market entry standards will be the same for Chinese and foreign banks.

"Many more measures will be introduced this year and some of the measures will be beyond the expectations of foreign companies and investors."

Beijing is facing a groundswell of acrimony from US policymakers and members of Congress over an ever-increasing trade imbalance in China's favour and restrictions on US companies operating in the Asian country. 

US President Donald Trump accused the country of actively undermining American national security. 

Lawmakers have portrayed China's support for "national champions" in the tech sector and efforts to acquire advanced technology from US companies as part of a plan to gain military advantages over Washington.

G20 vs USA: leaders call for talk as Trump readies China tariffs

Trump is expected to announce within the next two days the imposition of a package of as much as US$60 billion worth of annual tariffs on telecommunications equipment, consumer electronics and other goods from China, the result of a months-long investigation into rules faced by foreign companies operating in the country.  

In August, US Trade Representative Robert Lighthizer launched an investigation under section 301 of the US Trade Act of 1974 into the Chinese regulations, which force US companies operating in the country to transfer technology and intellectual property rights to local business partners. 

'China's Alan Greenspan' steps down as central bank chief

Soon afterward, USTR began taking testimony from US companies, seeking verification that the Chinese government uses unfair tactics on US companies' operations in China "to require or pressure the transfer of technologies and intellectual property to Chinese companies", according to USTR documents. 

Zhang's comments echo those made by China's Premier Li Keqiang at the end of the country's National People's Congress, an annual parliamentary convocation, earlier this week.  

"We will fully open up the manufacturing sector, with no mandatory technology transfers allowed, and we will protect intellectual property," Li told a press conference wrapping up the NPC in Beijing. 

'Man of action' takes the helm of China's new financial watchdog

Zhang provided more detail on the scope of market openings China's government is planning for foreign investors.

"The general manufacturing sector will be completely opened up and access to sectors like telecommunications, medical services, education, elderly care and new energy vehicles will be expanded," Zhang said in New York. 

"China will phase in the opening up of bank card clearing and other markets, lift restrictions on the scope of operations of foreign-invested insurance companies and ease or lift restrictions on the share of foreign-owned equity in companies in sectors including banking, securities, fund management, futures and financial asset management."

Xi Jinping has consolidated power, but China is still waiting for the promised waves of reform

These moves might be too little and too late, according to US politicians and advisers. 

Addressing the US's record US$276 billion (HK$2.16 trillion) trade deficit with China last year, Edward Cox, chairman of the New York Republican State Committee, said Beijing's status as a geopolitical competitor makes such an imbalance politically unsustainable.  

Trade deficits the US carried with Japan, South Korea, and European countries since the mid 20th century had geo-strategic goals, making trade deficits with them more acceptable to the US government, Cox, who spoke at the CGCC event, told reporters after his presentation. 

"The Cold War was going on and these were our allies," Cox said. "We wanted to show that free markets and capitalism worked and so we were very happy to be generous in that process. China's not an ally. We are partners in trade and he have relations, but we're not allies. 

Amid White House chaos, Wang may have no one to meet at trade talks

"The deficit [with China is] more serious, particularly when you take that back even more into the geopolitical realm and the things we have to deal with, that is the Korean Peninsula issues, the South China Sea issues, the growing [Chinese] blue-water navy, the shore-to-sea missiles that are very effective that China's developing."

The USTR may announce tariffs as high as 100 per cent on some goods from China, former acting deputy US trade representative Wendy Cutler said in a conference call. 

"The administration has been clear that when it takes action under 301 it won't be limited to tariffs and at a minimum it will include investment restrictions in an effort to set up a reciprocal investment system that would restrict Chinese investment in the United States, trying to mirror Chinese practices," Cutler said. 

US 'not planning to start a trade war', Mnuchin claims

"We should all get ready for some serious trade action in the coming days." 

Cutler, who now serves as managing director of the Asia Society Policy Institute's Washington office, was responsible for negotiations leading to the Trans-Pacific Partnership under former President Barack Obama. Trump pulled Washington out of the TPP soon after taking office last year.

This article originally appeared on the South China Morning Post (SCMP).

Copyright (c) 2018. South China Morning Post Publishers Ltd. All rights reserved.