Business Basks in Xi's Stability as Boao Elite Eye Trade Tension
(Bloomberg) -- Business executives with interests in the U.S. and China played down the risks of a brewing trade conflict between the two nations, with Chinese President Xi Jinping receiving plaudits for his “authoritarian” leadership.
At the Boao Forum for Asia taking place in the sub-tropical resort on Hainan island, China, Barclays Plc Deputy Chairman Sir Gerry Grimstone endorsed the host nation as a “beacon of stability.” Grimstone, who is also chairman of Standard Life Aberdeen Plc, called China “wonderful” for U.K. business in helping to stabilize a “very troubled world,” in a Bloomberg TV interview with Stephen Engle on Monday.
“The fact that Xi is prepared to give such strong authoritarian guidance within the context of a market economy is great for companies like mine,” Grimstone, 68, said. Standard Life will launch its first onshore fund in China next month, he said.
Xi is due to speak in Boao on Tuesday, with his long-awaited remarks on opening up his nation’s economy now overshadowed by U.S. President Donald Trump’s latest threat to increase the value of imports from China subject to higher tariffs by $100 billion. As that threat is as yet unanswered in any detail, how Xi responds -- if at all -- will be a key signal for investors seeking a de-escalation of the conflict.
John Chen, chief executive officer of BlackBerry Ltd., which is partnering with China’s search-giant Baidu Inc. on autonomous driving technology, said Trump’s attempts to maintain a rapport with Xi may be a good sign, after Trump tweeted yesterday the pair would “always be friends.”
Friends don’t always see eye to eye but try to resolve differences, Chen said in a Bloomberg Television interview at Boao, while adding that the market impact of tension since January had been “damaging.”
Unfazed by the war of words, and also speaking at Boao, Liu Hualong, the chairman of CRRC Corp., China’s state-owned maker of bullet and subway trains, said: “The impact from a trade war with the U.S. is not big on CRRC.”
That optimism came even though railway equipment and technology is listed among 1,333 items targeted for extra tariffs by U.S. trade officials. Liu said 60 percent of the company’s products to be delivered in the U.S. would be produced in that country. The firm is pressing ahead with a plan to open factories in Springfield, Massachusetts, and Chicago.
While business leaders may try to tough out the spat, a Chinese policy adviser saw a bigger agenda at play.
“The U.S. says it is dealing with trade deficits, but it is actually looking to contain China’s development, especially high-tech,” said National Economic Research Institute Director Fan Gang. “The ongoing China-U.S. trade dispute reflects a deeper unease about China’s rise,” Fan said.
Even as the U.K.’s Grimstone talked up China’s role as a stabilizing influence, he remained concerned at the prospect of the dispute damaging the global economy. “This U.S.-China trade war is a very real thing on the horizon.”
To contact Bloomberg News staff for this story: Stephen Engle in Beijing at email@example.com, Miao Han in Beijing at firstname.lastname@example.org.
©2018 Bloomberg L.P.
With assistance from Stephen Engle, Miao Han