Trump amps up trade war, china plays nice with foreign investors

BEIJING (Reuters) – China is trying to reverse its narrative amidst escalating trade war with the United States. as a champion of openness.

But criticism argues that despite its claims to the US President Donald Trump threatens to apply more tariffs on Chinese imports, Beijing's recent moves to make it easier.

This week, China agreed to a $ 10 billion petrochemicals project by Germany's BASF ( BASFn.DE ) that will be the first such plant in China that is wholly foreign-owned, not a joint venture.

Shanghai factory for US electric car maker Tesla Inc. ( TSLA.O ), and a $ 2.3 billion joint venture organic light-emitting diode (OLED) plant to be South Korea's LG Display Co Ltd ( 034220.KS ).

10 percent tariffs on an extra $ 200 billion worth of Chinese imports, Commerce Minister Li Chenggang said on Wednesday that China would not close itself to U.S. business.

"I want to stress that the Chinese government's attitude to support business cooperation between the two countries will not change, its determination to push forward reforms and improve the business environment will not change, and its stance of opposing unilateralism and supporting multilateralism will not change, "Li said at a business forum in Beijing on Wednesday.

"They go low, we go high," he said, in an apparent jab at Trump as he borrowed a phrase used to train U.S. First Lady Michelle Obama in the 2016 U.S. election campaign.

The recent investment announcements came as Premier Li Keqiang this week visited Germany. The two countries signed commercial agreements worth 20 billion euros ($ 23.5 billion), including the BASF agreement.

Chinese state media framed such cooperation in the context of the greater bitter trade dispute with Washington.

"The trade war should push China and the EU to cherish mutual cooperation," said China's nationalist tabloid, the Global Times, said in an editorial on Wednesday.

'PROMISE FATIGUE'

As the threats in the trade dispute have increased, so too have signals from Beijing that it means to follow through on reforms. Chinese officials insist there is no link, and it will be open at its own pace. Rising costs are also frustrating to foreign manufacturers in China.

In recent weeks, China has issued a short list of areas closed to foreign investment, and committed to easing or eliminating foreign equity caps in sectors that include banking, insurance, securities, the auto industry, and aviation industry. .

The purpose of the string of announcements in China and more vociferous complaints about Beijing and the difficulty of doing business in the world's second-largest economy.

And is still holding up at least one major takeover involving foreign companies – U.S. chipmaker Qualcomm Inc. ( QCOM.O ) deal to buy Netherlands-based NXP Semiconductors NV NXPL.O. That has been waiting for approval of China's antitrust regulator for months, leading to speculation among investors that the deal is being held hostage to the trade dispute with Washington.

Years of lackluster follow-through by China on its reform pledges has left what many in the foreign business community call "promised fatigue".

Business leaders have been warned that if they do not have a sense of reciprocal market openness, it would be sow retaliatory sentiment among its largest trading partners. And trade hardliners, particularly in the United States, had argued that Beijing would not make a great deal of money in Beijing.

European Union Chamber of Commerce in China President Mats Harborn on Tuesday called Trump's Tariffs the "sledgehammer approach", but said the root cause of what China has termed the "largest-scale trade war" in China.

"The reason we are here because of the Chinese leadership did not proceed as quickly as we wanted," Harborn told a news briefing.

Some people in the U.S. business community, while there is a lot of pains in the past because of the trump's tariffs.

"Tariffs are biting. The Chinese are less confident internally than externally. They have never been tested, "said the U.S. industry source told Reuters, asking for a comment on the sensitivity of the matter.

Beijing has begun downplaying Made in China 2025, the state-backed industrial policy that has provoked alarm in the West and is core to Washington's complaints about the country's unfair trade practices.

Propaganda authorities have also issued an exceptionally strict rules limiting local media coverage of the war because of unrestrained reporting and reporting.

And European officials have said Beijing is trying to woo the EU against the backdrop of China, but the Europeans, who share the US criticism of China's goal of getting rid of trump's tariffs sides.

"By committing themselves to further openness. I think China hopes it will reduce the departure of China's multinational firms, "said Louis Kuijs, Hong Kong-based head of Asia Economics at Oxford Economics.