Chinese President Xi Jinping’s historic push for a new era of openness to foreign investment is a stunning victory for Donald Trump and a great outcome for Australia. Trump pushed China to the brink with threats of sweeping new tariffs worth $US150 billion ($194bn) and now Xi has blinked, delivering an outcome that helps avert a major trade war and will benefit countries such as Australia.
It comes only a day after a second potentially vital breakthrough for Trump in Asia, with North Korean leader Kim Jong-un confirming for the first time that he is willing to discuss the denuclearisation of the Korean peninsula in an extraordinary meeting with Trump in the coming months.
The developments suggest that Trump’s forthright if unorthodox approach to foreign policy is securing outcomes in Asia that his more cautious predecessor Barack Obama could only dream of.
Xi’s speech not only promised greater openness to foreign companies, investment and lower tariffs, but he directly addressed Trump’s main concern of China’s whopping $370bn trade surplus with Washington.
“We want to increase imports and have a greater balance of international payments under the current account,” Xi said.
This is the outcome the Trump White House was hoping for when it pursued its high-risk strategy of confronting China over its trade surplus and its history of closed markets and its thieving of intellectual property.
In recent days the Trump administration has been playing down the prospects of a trade war with China, even as Beijing has threatened to match any new US tariffs dollar for dollar.
Xi’s speech does not alone guarantee that there will not be a harmful spike in tariffs between the two countries, but it goes a long way to neutralising the issue and setting the scene for sober negotiations rather than rash actions.
Cameron Stewart is also US contributor for Sky News Australia.
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