Xi-Trump talks calm sharemarkets

Phone talks between Donald Trump and Xi Jinping have provided the Chinese President with a much needed public relations boost.

Donald Trump and Xi Jinping in Beijing last November. Picture: AFP

Telephone talks between Donald Trump and Xi Jinping have injected a note of optimism in regional stockmarkets and provided the Chinese President with a much needed public relations boost ahead of next week’s trade gathering in Shanghai.

After weeks of market uncertainty and rising concern about a slowdown in the Chinese economy, the news the leaders of the world’s largest economies had held positive talks is the first positive news that there may be a solution ahead for the Trump-initiated trade war with China.

The leaders agreed to meet on the sidelines of the G20 meeting in Buenos Aires from November 30 to December 1, when Mr Trump will be unencumbered by next week’s mid-term elections.

In a statement released in China, Mr Xi said he was keen to meet Mr Trump in Argentina and “attached great importance” to good relations with the US leader.

“Both of us have good wishes for the healthy and stable development of Sino-US relations and the expansion of Sino-US economic and trade co-operation,” he said.

“We must work hard to turn this desire into a reality.”

While the US President has conducted a widesweeping attack on China’s trade practices and imposed tariffs on goods worth more than $US250 billion or half of China’s total exports to the US, Beijing has maintained a more measured response, imposing tariffs on $US110bn of US imports while calling on the US to settle their issues by further talks.

Mr Xi said China did not want to see a repeat of past problems where China and the US had had “some differences in the economic and trade field” which had hurt the economies of both countries.

“China and the US have successful precedents for resolving economic and trade problems through co-ordination and co-operation,” he said.

“The economic teams of the two countries should strengthen contacts, conduct consultations on issues of mutual concern and push for a mutually acceptable solution for China-US economic and trade issues.”

Mr Trump revealed details of the conversation in a tweet in which said he had had a “long and good conversation” with Mr Xi.

He said the two leaders had talked on many issues “with a heavy emphasis on trade” as well as North Korea.

He said the discussions between the two countries were “moving along nicely”.

Chinese and Asian stockmarkets rebounded on the news.

“Positive comments from President Trump over US-China trade tensions are cheering the market in the short term,” JPMorgan Asset Management’s Asia-Pacific chief market strategist, Tai Hui, wrote in a report yesterday.

“While we are still cautious over a full resolution of recent tensions in the medium term, resumption of dialogue between Washington and Beijing would be good enough for investors for now.”

Mr Xi is set to make a major speech on Monday at the opening of his import expo in Shanghai.

It follows the speech to the Davos forum in January last year that he used to carve out a role for China as a strong supporter of an open trade system and strong opponent of protectionism.

Mr Xi sees the massive logistical exercise being staged in Shanghai as further evidence of China’s continuing commitment to open up its economy. He is expected to use his speech to launch a raft of measures to make it easier for foreign companies to do business and invest in China.

Mr Xi said yesterday that the import fair showed “China’s positive will to increase imports and expand openness”.

China has invited the leaders of 18 countries to the fair, including Pakistan and Russia, as well as several world business leaders such as Microsoft founder Bill Gates and Alibaba executive chairman Jack Ma.

More than 82 countries, including Australia, will have pavilions at the expo. Australia will have a major presence at the event with a delegation led by Trade Minister Simon Birmingham. A wide range of Australian companies will attend, including Australia Post, ANZ, Coles, Woolworths, Blackmores, BHP, Rio, FMG and Qantas.

The Xi-Trump phone call come after news this week that the trade war with the US had hit the manufacturing sector in China.

Concern about the state of the economy led Mr Xi to meet with private sector leaders in a show of support for private enterprise while giving strong backing to the state-owned enterprise sector.

At the meeting, Mr Xi said he would introduce tax cuts, as well as encourage banks to lend more to the ­private sector and local governments to help “rescue” troubled private firms.