Chinese President Xi Jinping pledged last Tuesday to further open the world's number two economy amid escalating trade tensions between China and the US, news wires reported. Xi addressed the Boao Forum for Asia, held on the southern island of Hainan. The annual summit brings together politicians and business leaders and is been dubbed the Asian Davos. “China does not seek trade surplus. We have a genuine desire to increase imports and achieve greater balance of international payments under the current account,” Xi said. He promised China will take measures to liberalise automobile investment, significantly reduce tariffs on cars this year and protect intellectual property. Xi pushed measures in areas that have been high on the list of US President Donald Trump's ire at China, observers noted. “When a car is sent to the US from China, there is a Tariff to be paid of 2 1/2%. When a car is sent to China from the US, there is a Tariff to be paid of 25%,” Trump tweeted last Monday. “Does that sound like free or fair trade. No, it sounds like STUPID TRADE - going on for years!”

Beijing's restrictions on foreign ownership in the auto sector have forced foreign companies to partner with Chinese firms and share their technology. Elon Musk, CEO of electric car giant Tesla asked for Trump's help on the issue this year, alluding to the troubles his firm has faced producing in China. Xi said those restrictions would be liberalised.

The threatened tariff war was spurred by a US Trade Representative investigation into China's intellectual property practices, which alleged wide-scale theft and forced technology transfers. Xi also pledged specific measures to address IP protection. “This year, we will reorganise the State Intellectual Property Office to strengthen law enforcement,” Xi told the forum. “We encourage Chinese and foreign companies to carry out normal technical exchanges and cooperation to protect the legitimate intellectual property rights of foreign-funded enterprises in China,” he said.

Pledges on autos and IP were accompanied by a promise to push through reforms in the financial services industry, which would open up to more foreign participation.

Observers noted that many of the steps Xi outlined last week are ones Beijing has already proposed in some form.

Xi didn't mention Trump or the US by name in his speech. But he stressed the need for tackling problems through dialogue rather than confrontation, warning against adopting a “Cold War mentality”. He also complained about limits other governments have put on trade with China. “We hope developed countries will stop imposing restrictions on normal and reasonable trade of hi-tech products and relax export controls on such trade with China,” he said.

China has asked the World Trade Organisation to mediate in its dispute with the US over tariffs on steel and aluminium imports, a WTO statement confirmed last week. China has said the duties of 25% on imports of steel products and 10% on those of aluminium breach the WTO agreements.