Chinese PM Calls for Open Markets to Fight 'Instability, Uncertainty'

China has urged some of the world’s top business people to help counter “rising instability and uncertainty”.

At a global business gathering in Beijing on Sunday, Chinese Premier Li Qiang called for countries to open their markets, as the country braces for more US tariffs.

“In today’s increasingly fragmented world with rising instability and uncertainty, it is more necessary for countries to open up their markets and enterprises… to resist risks and challenges,” Li told dozens of foreign CEOs and visiting US Republican Senator Steve Daines at the China Development Forum, state media reported.

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Foreign CEOs including Tim Cook of Apple, Cristiano Amon of Qualcomm, Pascal Soriot of AstraZeneca and Amin Nasser of Saudi Aramco are attending the two-day forum, which ends later on Monday, and some are expected to meet President Xi Jinping on Friday, sources have told Reuters.

Beijing is keen to attract foreign investment at a time of heightened geopolitical tensions, as policymakers try to boost domestic consumption to offset fresh US tariff headwinds.

“We will focus on combining policy intensification with stimulating market forces,” Li said, according to a Xinhua report, without elaborating on specific stimulus measures.

“We will implement more active and promising macroeconomic policies, further intensify counter-cyclical adjustments, and introduce new incremental policies when necessary.”

Li expressed hope that entrepreneurs would be “staunch defenders and promoters of globalisation” and “resist unilateralism and protectionism”.

Li meets seven American CEOs

There were fewer American CEOs attending the summit than last year due to heightened geopolitical tensions between Beijing and Washington, according to one source.

Li met with Daines and seven other American CEOs on Sunday afternoon, which Daines billed as a chance for them to share their views of the business environment in China.

The Montana lawmaker, a strong supporter of President Donald Trump, met with Vice Premier He Lifeng on Saturday in the first visit to China by a US politician since Trump took office in January.

Trump has announced a wave of fresh “reciprocal” tariffs to take effect on April 2, targeting countries with trade barriers on US products, which could include China.

He imposed 20% tariffs on Chinese exports this month, prompting China to retaliate with additional duties on American agricultural products.

The Trump administration is set to conclude a review by April 1 of Beijing’s compliance with a “phase one” US-China trade deal struck in his first term.

During the forum, Chinese economic policymaker Han Wenxiu vowed further efforts to deepen supply-side reforms and promote self-reliance in science and technology, according to state media.

Nomura said a new assessment by China’s central bank “of increasing external uncertainties,” plus its desire for steady financial markets, and lingering concerns over long-term bond yields and strong determination to defend its currency, could be “a rising hurdle to policy rate cuts.”

“We see an increasing risk that the PBoC [the People’s Bank of China] may deliver fewer rate cuts than our current forecast of 30bp this year,” – 15 basis points in the second quarter and 15bp in fourth quarter – as it “might consider lowering relending rates to underscore its policy focus to promote sci-technology innovation and consumption.”

But its analysts (Jing Wang, Harrington Zhang, Hannah Liu, Ting Lu) maintained their forecast for 100 basis points of cuts in the reserve requirement ratio for Chinese banks this year – 50 basis points in the second and fourth quarters.

Meetings with foreign CEOs, as FDI plunges

In recent weeks, Chinese commerce ministry officials have met with at least a dozen executives from foreign firms including Brazilian mining giant Vale, Airbus, PepsiCo, Procter & Gamble, Honeywell, and Swire.

These meetings came as official data showed foreign direct investment (FDI) last year plummeted the most since the 2008 global financial crisis.

China’s State Council unveiled an action plan to attract foreign investment last week, which promised measures such as smoothing cross-border data transfers.

As China concluded its annual parliamentary session this month, the government vowed to “vigorously boost” consumption in an economy facing sluggish consumer demand and a protracted property crisis.

However, analysts have said policymakers will need to launch greater stimulus efforts if Beijing is caught up in a spiralling trade war with Washington.