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January 17, 2020

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Liu: China will open wider to world

CHINA will further deepen domestic reforms and open up wider to the outside world, Chinese Vice Premier Liu He said in Washington yesterday.

Liu, who signed the phase-one China-US economic and trade agreement with US President Donald Trump in the White House earlier in the day, made the remarks during an afternoon briefing with the Chinese press.

Asked about what the deal means to China’s reform and opening-up drive, Liu said that the goal of China’s economic reform is to let the market play a decisive role in resources allocation and improve the functions of the government, adding that the reform should be implemented on the premise of upholding the socialist system.

China’s Ministry of Finance released the full text of the phase one trade agreement yesterday.

The agreement, released in both Chinese and English, consists of eight chapters touching in detail several subjects, including intellectual property, technology transfer, food and agricultural products, and financial services.

According to the agreement, China will purchase at least US$200 billion in additional US goods and services over two years, including US$32 billion in additional imports of US farm products.

The agreement calls for punishment of the theft of trade secrets. It also stipulates that neither side will force persons from the other to transfer technology “in relation to acquisitions, joint ventures, or other investment transactions.”

Under the agreement, China will make it easier for US banks to underwrite the debt of Chinese firms and lower barriers to market entry for certain investment services.

Additionally, China agreed to allow US electronic payment services like Mastercard, Visa and American Express to apply to become bank card clearing institutions.

By April of 2020, China is to allow wholly-owned US companies to participate in the life, pension and health insurance sectors.

In the agreement, both sides commit to abide by the International Monetary Fund’s principles on avoiding the manipulation of exchange rates and say they will work to achieve market-determined exchange rates and refrain from competitively cutting their value of their currencies.

China has achieved rapid economic growth while maintaining lasting social stability, a great feat that should mainly be attributed to the leadership of the Communist Party of China as well as the country’s socialist system, the vice premier said. “We will continue to be committed to creating conditions for the Chinese people to satisfy their needs for a better life.”

Liu said the phase-one deal is more than an economic deal, as it also has a bearing on world peace and prosperity.

After the signing of the deal, China will strive to implement it together with the United States by sticking to the principle of equality and mutual respect and abiding by all agreed terms, said Liu.

As the world’s two largest economies and two major countries with great responsibilities in international affairs, China and the United States have reached the deal “with the big picture in mind,” Liu said.

“From an economic perspective, this agreement helps ease trade tensions and remove market uncertainty, thus being an agreement that stabilizes expectations, enhances confidence, creates opportunities and promotes prosperity,” said the vice premier.

Liu also said China’s gross domestic product is estimated to expand over 6 percent year on year in 2019, and the latest data indicates a better-than-expected economic outlook.

China’s economy has been generally stable and is one of the fastest-growing economies in the world in 2019, said Liu. He also pointed out that China’s economic output has reached nearly 100 trillion yuan (US$14.49 trillion), and that its annual economic expansion of about US$1 trillion is almost equivalent to a medium-sized economy in today’s world.

Major macro-indicators including jobs, consumer prices and balance of payments, are all within reasonable ranges, with industry upgrading and structural adjustments advancing firmly, the vice premier added.

This year will witness China’s accomplishment of building a moderately prosperous society in all respects, as well as its completion of the 13th Five-Year Plan.

Liu noted that China has seen some positive signs in key indexes including the purchasing managers’ index, and indexes for industrial added value and enterprise efficiency in the past two months. Some high frequency data in January also showed that China’s economic performance is better than expected.


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