Sunday, May 26

China Vows to Open Economy, Reduce Auto Import Tariffs

Xi Jinping, President of China promised to lower down import tariffs on products including cars and open country’s economy in a speech delivered on Tuesday over matters concerning around ongoing trade tensions between China and the United States.

At present, a 25 percent import duty is levied on Chinese imports. In his address speech at Boao Forum for Asia, President said, “China’s door of opening will not be closed and will only open wider.”

Going by the present market scenario, if a foreign company operating in China partners with a local manufacturer, former’s stake will be limited to 50 percent of the joint entity. This can come off as a great news for Jaguar Land Rover, a subsidiary of Tata Motor’s which are involved in selling Range Rover and other high-end models to China.

President, Xi Jinping also informed that foreign ownership limit in automobile sector would be raised and the previously pushed measures will be made robust to give an impetus to the financial sector.

Various Analysts expressed their opinion on Xi’s speech.

 

David Qu, Market Economist at ANZ, said

 

His speech seems to have a broader view and we consider it more as a declaration. While, it will not affect market directly, yet it would be interesting to see how it will affect the ongoing turbulence over trade issues.

 

Ang Hai, Strategist at Kaiyuan securities, said,

 

Xi is offering a solution to Sino-U.S Trade dispute.President is waiving an olive branch to the U.S and now market would be waiting to hear a response from U.S side.The market appears positive and hopefully, the dispute would get solved through negotiations.