China well on its course of reforms

By Xu Qinduo

"I wish to emphasize that with regard to all those major initiatives of opening-up that I have just announced, we have every intention to translate them into reality, sooner rather than later," said President Xi Jinping during a recent speech at the Boao Forum on Asia. 

President Xi talked about new reforming and opening up measures including "significantly broadening market access," "creating a more attractive investment environment," "strengthening protection of intellectual property rights" and "expanding imports" from around the world. 

There's been warm response to that message of further opening up.  But there are also questions and suspicions, such as whether China would truly follow a path of reforms after 40 years of opening up to the rest of the world.  

A man charges an electric car in Qinghe County, Hebei Province. [File Photo: Xinhua]

Now, those suspicions are being dispelled as more and more concrete reforms are unveiled by the Chinese government. On Tuesday (April 17), China's top economic planner - the National Development and Reform Commission (NDRC) - announced that China will end shareholder limits for new energy vehicle firms this year, including those that produce electric cars. 

The move, according to AFP, will be followed by commercial vehicles in 2020 and passenger vehicles in 2022. After a five-year transition period, the auto sector will no longer have any restrictions.  Restrictions on foreign ownership will also be lifted in shipbuilding and aircraft manufacturing. A new negative list for foreign investment is expected to be released in the first six months of this year to "substantially relax foreign investment access."

The latest announcement comes only a week after Xi Jinping's speech on April 10th.  A day after that historic speech, China's central Bank – the People's Bank of China – detailed the new reforms, which include allowing foreign firms to invest in trust companies, financial leasing, auto finance and consumer finance.  A planned trading link between stock markets in the mainland and London will also be launched by end of this year. 

Three days later after his Boao speech, Xi Jinping announced another big move of plans to turn the Province of Hainan into a pilot free trade zone and then into a free trade port.

Detailed guidelines were then publicized the following day, suggesting a free trade port system will be "basically established" in Hainan by 2025.  The free trade port system will be "more mature" by 2035.

Yes, China is good at long-term planning, rolling out new policies and rapid implementation. China now faces the threat of a trade war from the United States. Yet, its practices present a sharp contrast with the volatile Trump Administration, which announced new sanctions on Russia but then ditched the idea the next day, which scrapped the Trans-Pacific Partnership a year ago but is now flirting with the idea of returning to the treaty. 

What's even more incomprehensible, Trump complained in a tweet that "Russia and China are playing the Currency Devaluation game as the U.S. keeps raising interest rates. Not acceptable!"  This is an outright falsehood.

"China's yuan has appreciated against US dollar by 3.7% so far this year, and has risen by 10.7% since Trump took office" more than a year ago, tweeted Patrick Chovanec, Chief Strategist at Silvercrest Asset Management. 

The US side has resorted to domestic laws, instead of the international dispute settlement mechanisms, to deal with its trade issue with China.  There's growing concern that protectionism and unilateralism in Washington will deal a heavy blow to the global multilateral trading system. 

With its firm commitment to more reform and opening up, China, the second largest economy in the world, shoulders a massive responsibility to promote free trade and globalization. 

Xu Qinduo is a political analyst for CRI and CGTN, and a Senior Fellow of the Pangoal Institution. He has worked as CRI's chief correspondent to Washington DC.