Although Chinese President Xi Jinping has called for “inclusive globalization” China itself has enforced strong capital controls and has placed measures that impede global investment in its economy.
With Chinese President Xi Jinping talking about protectionism at the World Economic Forum in Davos, Switzerland, the European Union has urged the Chinese leadership to make “concrete progress” in opening up its markets to global investment
“A speech is a speech and actions are actions,” said Hans Dietmar Schweisgut, EU’s Ambassador to China. He went on to add, he would be “surprised” if Xi was unable to translate his words into action.
Last week at the convention in Davos, Xi had called for an “inclusive globalization” and for global unity, saying “self-isolation will benefit no-one”, just two days before U.S. President Donald Trump took the oath of his office.
At the same time, although China’s cabinet issued notifications that could further open up the economy to foreign investments, including the easing of limits of financial institutions and banks, However, it did not provide a timetable for their implementation.
Schweisgut told reporters in Beijing that the EU has yet to see “sufficient signs that China will be willing to grant reciprocity of market access to European companies”.
Significantly, in June 2016, the European Chamber of Commerce had notified that foreign companies were facing an increasingly hostile environment in China. As a result, less than 50% of its members were willing to expand operations in the world’s second biggest economy.
As a result of its protectionist tendencies, China has been labelled as the world’s “most protectionist” country by billionaire investor Wilbur Ross, Trump’s choice for commerce secretary.
Ross had earlier stated that Chinese officials “talk much more about free trade than they actually practice.”
Playing down the chances of a trade war between the United States and China, Schweisgut said if this were to happen it would be “self-defeating” and that to even speculate about it risks a “look too far down the road”.
Speaking in a forked tongue, China has stated that it was confident of resolving its trade disputes with the new U.S. government, although government advisers and its state media has warned that U.S. automobile companies, aircraft manufacturers, and agricultural producers could be caught in the cross-fire of increased trade tensions.