Amid trade war, Xi Jinping says China must stay the course on reform

Chinese President Xi Jinping addressed his nation Tuesday morning in Beijing to commemorate the 40th anniversary of China’s “reform and opening up,” striking a relatively defiant tone to international calls for major changes in his country’s economy.

His remarks are being watched to see whether Xi’s idea of progress aligns with the West’s increasingly vocal demands for less state control. That could have significant consequences for whether the U.S. reaches a trade deal with China by the end of its 90-day tariff ceasefire.

“No one is in a position to dictate to the Chinese people what should or should not be done,” Xi said in Mandarin Chinese during the address, according to a translation.

He called for China to “stay the course” on its current path of reform.

“What to reform and how to go about the reform must be consistent with the overarching goal of improving and developing the system of Socialism with Chinese Characteristics and modernizing China’s system and capacity for governance,” the Chinese leader added. “We will resolutely reform what should and can be reformed, and make no change where there should and cannot be any reform.”

Dec. 18 commemorates how former Chinese leader Deng Xiaoping spearheaded the restructuring of the economy in 1978, paving the way for individual ownership in many industries and allowing foreign companies some access. Many credit the policy change for helping lift hundreds of millions out of poverty and turning China into an economic powerhouse that now ranks second only to the United States.

However, many in the West say China did not achieve its success without stealing intellectual property and undermining global market forces with state support. Critics add that Beijing has benefited from joining the World Trade Organization in 2001 but has not followed commitments to reduce government control. After Xi assumed power in 2012, Beijing’s initial policy was more market-oriented. But, in recent years, the direction has reversed and, as of this fall, reform is not moving forward in eight of 10 areas tracked by The China Dashboard, a joint project between the Asia Society Policy Institute and the Rhodium Group.

Throughout his speech, Xi emphasized his vision of the Communist Party’s centrality in all future reform, and noted that “the centralized unified leadership of the party” had overseen the economic transformation over the last 40 years.

This year, Xi abolished the presidential term limit for his one-party-led country. The clause “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era” was also added to the Chinese constitution, following mentions of former Chairman Mao Zedong’s and Deng’s contributions.

Meanwhile, the U.S. under President Donald Trump is stepping up pressure on China with tariffs on the bulk of the country’s exports to America. Beijing retaliated with duties of its own, and the escalating trade tensions between the world’s two largest economies have roiled global markets. Trump and Xi reached a temporary ceasefire earlier this month with the U.S., agreeing not to increase tariffs if the two countries can reach some resolution on issues such as forced technology transfer within 90 days.

China’s leader may save the biggest pronouncements for negotiations with the U.S. on trade. Still, some hope the pressure from the West will push Xi to speed up restructuring of the economy and his remarks on Tuesday will be watched for signs of willingness to see “reform and opening up” as continued implementation of market-oriented policies. But if Xi chooses not to, he is likely setting China on a course that runs counter to an increasingly oppositional U.S., perhaps best exemplified by an October speech from Vice President Mike Pence.

This is a breaking news story. Check back for updates.

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