Wang Xiangwei

China Briefing | Cheer up, crises like the US trade war reform China’s economy

In 1998, China paved the way to economic lift off with World Trade Organisation talks. In 2008, it beat the Global Financial Crisis. So in 2018, on its 40th anniversary of reform and opening up, it’s at a familiar juncture

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It might not seem like it, but there could be something to smile about regarding the US-China trade war. Photo: Xinhua

Wang Xiangwei

Published: 9:30am, 22 Dec 2018Updated: 4:15pm, 22 Dec 2018

In the run up to President Xi Jinping’s speech at the grand gathering in Beijing on Tuesday to mark China’s 40th anniversary of reform and opening up, expectations were high, particularly among some overseas analysts, that he would announce substantive measures to defuse the trade war with the United States and outline plans to overhaul the economy.

Disappointment was palpable and stock markets in Asia took a hit as Xi announced no new policies and instead devoted the bulk of his speech to lauding the vision and wisdom of the ruling Communist Party and vowing to continue to strengthen authoritarian rule.

In fact, some overseas media detected a defiant tone in Xi’s speech. While he vowed to continue the economic reforms started by Deng Xiaoping 40 years ago, he also declared that no one was “in a position to dictate to the Chinese people what should or should not be done” and said there was “no textbook of golden rules to follow”. His remarks appeared to be aimed at countering demands from Washington, which has turned up the pressure on Beijing to undertake structural changes regarding its support for the state sector and its discrimination against foreign and private enterprises, among other things.

Some overseas analysts have thus surmised that Xi’s slogan-laden speech may mean China’s concessions to the US in the upcoming trade negotiations will be more cosmetic than substantial.

But this view is misplaced as it fails to appreciate China’s opaque political conventions in such matters.

China and the US have only until March to defuse the trade war. Photo: Reuters