China’s economic mastermind pledges more reform at Davos

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Liu He, the man behind China's economic policy, vows to further open up the country

DAVOS, SWITZERLAND: The man behind China's economic policy took the stage at Davos yesterday, pledging to push forward the country's four-decade reform and further open the country to the world.

Mr Liu He, President Xi Jinping's main economic adviser, echoed his boss's lofty pro-globalisation words from last year's Davos summit, promising foreign companies greater access to China's financial services market, manufacturing and some service industries.

He also vowed to carry out China's financial services liberalisation, which was unveiled late last year.

Banking, securities and insurance industries will allow more foreign access, Mr Liu said, adding that these measures will be implemented one at a time.

China will work to increase imports, do better at protecting intellectual property and "gradually lower the imported automobile tariff rate", he said.

Noting this year was the 40th anniversary of China's reform and opening policy that brought about the country's economic miracle, Mr Liu said: "We will continue to press our reform and opening policy in China."


Added to the Communist Party's 25-member politburo in October last year, Mr Liu holds substantial clout in China, and analysts forecast the 65-year-old will take on greater responsibilities this year.

In another development, China's Foreign Ministry said yesterday, after US President Donald Trump signed into law a steep tariff on imported solar panels, that protectionism is a double-edged sword that will harm both sides.

We will continue to press our reform and opening policy in China. Mr Liu He

The tariff of 30 per cent is among the first unilateral trade curbs imposed as part of a protectionist agenda to help US manufacturers, but it has alarmed Asian trading partners that produce lower-cost goods.

The Trump administration also put a tariff on imported washing machines, Reuters reported.

China, the world's biggest solar panel producer, has already branded the move an "overreaction".

"Protectionism is a double-edged sword. It not only wounds others but wounds themselves," Foreign Ministry spokesman Hua Chunying said at a daily news briefing.

But China is confident in its own economy, which this year will see the scale of domestic consumption overtake the US for the first time, she said, citing comments the previous day by Chinese Foreign Minister Wang Yi in Chile.

"This means that after this year, the world's biggest market will be China," said Ms Hua, adding that the market had been developed on the back of its people's sweat rather than having been snatched away from anyone.

However, some economists remain sceptical.

Said Mr Tang Jianwei, an analyst at the Bank of Communications in Shanghai: "It is impossible China's consumption will surpass the US this year.

"Consumption accounts for 70 per cent of the US economy, while in China, it accounts for only 30 per cent. And China's economy is not as large as the US' yet." - REUTERS, AFP