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On Wednesday, hours after the election polls closed in the U.S., President Xi Jinping delivered a keynote speech to the China International Import Expo (CIIE) in Shanghai—an annual trade event China created just two years ago to prove China remained open to foreign trade even as it entered a trade war with the U.S.
The President didn’t mention the U.S. election during his talk, as official policy is to remain neutral until the results are announced. Instead, Xi looked to assure investors that China remained open for business, despite a global pandemic that has shut borders and fractured Beijing’s relationship with its peers.
“This year’s CIIE is convened at a special time. COVID-19, which caught us all by surprise, has hit countries hard and dealt a heavy blow to the world economy,” Xi said in his opening remarks. China’s economy has already returned to growth, after a bruising first and second quarter when China enacted severe lockdown measures.
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The country’s comeback—with GDP rising 4.9% in the third quarter over the year before—has been fueled largely by exports of medical equipment and electronics, which saw a demand spike as working from home became the norm.
But China’s domestic consumption has not yet returned to the same extent, with retail sales rising for the first time in August by just 0.5% over last year. Facing weak consumer appetite at home, Xi began promoting a new policy for economic growth in May called “dual circulation.”
The somewhat nebulous policy seeks to boost domestic consumption as well as onshore high-tech manufacturing. Bo Zhuang, chief China economist at TS Lombard, says the policy is an act of “rebalancing” in the face of deglobalization, but some business leaders worry the policy means China’s market will become less open to foreign investment. Xi’s speech at the CIIE Wednesday sought to dissuade those fears.
The President—who delivered his speech via video—told attendees that “China is hosting this global trade event that demonstrates China’s sincere desire to share its market opportunities with the world and contribute to global economic recovery.”
But the President’s words are at odds with Beijing’s recent actions. China is piling import restrictions on goods from Australia, including barley, beef, wine, coal and copper ore with media reporting that a raft of new restrictions will be introduced this week. And on Thursday, China closed its borders to travelers from Britain and Belgium, citing a rise in coronavirus cases in those countries.
China began granting entry to foreign residents with valid visa or work permits in September, after closing borders to all foreign nationals in March. The early restrictions “stirred feelings of resentment” among the international business community, the European Chamber of Commerce said in its annual report on the state of doing business in China, published in September.
The report also said that the importance of China’s market had been overshadowed by political factors, such as the persecution of Uyghurs in Xinjiang, oppression of dissent in Hong Kong and the rise of pugnacious “wolf warrior” diplomats.
In its report Jörg Wuttke, president of the EU Chamber of Commerce in China, said, “Closing the gulfs between rhetoric and reality, market potential and market access, and the positive progress in China’s private sector and the regression of the state-owned sector, is in China’s immediate and long-term interests.”
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