Chinese leader Xi Jinping has issued a veiled warning to Donald Trump as the threat of a trade war with the US simmers, calling on other countries to refrain from “seeking dominance” and “reject power politics,” adding that “arrogance ... will get [you] nowhere”.

The Chinese president did not directly address his country’s ongoing tit-for-tat tariff dispute with the US on Tuesday, but said that those who ignored the “trend of the times” toward openness would be “left behind and assigned to the dustbin of history”. Xi was speaking at the Boao Forum for Asia in China’s southern province of Hainan, modelled after the World Economic Forum in Davos.

“The cold war and zero-sum mentality looks out of place in today’s world. Arrogance or only focusing one’s own interests will get nowhere. Only peaceful development and cooperation can truly bring win-win or all-win results,” he said in his first public remarks since the US and China trade dispute began.

At the same time Xi struck a conciliatory tone and said that China would lower import tariffs on vehicles, encourage imports, as well as strengthen the protection of intellectual property.

Stock markets in Asia rose in the wake of Xi’s remarks as investors took his tone as a sign that China and the US could be dialling back their trade war rhetoric.

The Nikkei in Japan was up 0.6% on Tuesday while the ASX200 in Sydney rose 0.8% and Hong Kong was up 0.77%. Futures trading pointed to a rise inLondon and New York when trading starts later.

The White House has said that its planned tariffs on Chinese goods, first announced last month, are in response to forced transfers of technology and intellectual property by American companies operating in China. The US has threatened to put tariffs on $150bn in annual Chinese goods imported to the US.

China’s ministry of commerce has responded that China “under this backdrop … will not negotiate.” China has said that it will respond with tariffs on more than 1,000 US goods, including top US exports to China like soybeans, aircraft, and vehicles.



Xi’s remarks on Tuesday come after claims from the White House that Beijing would back down. On Sunday, Trump said in a tweet “China will take down its trade barrier because it is the right thing to do ... A deal will be made on trade.” On Monday, he described China’s behaviour not as free or fair trade, but “stupid trade”.

Like Trump, Xi’s legacy depends on an image of strong leadership. To mark the 40th anniversary of China’s “reform and opening”, pushed by former Chinese leader Deng Xiaoping, Xi was expected to unveil market-opening reforms on par with Deng’s.

He pledged that China had entered a “new phase of opening up,” and pledged to make China’s financial and manufacturing sectors more open for foreign investments. Xi also said China would “significantly lower” tariffs on auto imports this year and loosen restrictions on foreign ownership in the sector “as soon as possible”.

The promises are not new and may still not be enough to defuse tensions. Beijing announced similar pledges last November when Trump visited China but never gave a specific timeline.

“The question is whether [these pledges] go far enough to appease Trump and the US ... hopefully the gesture might be enough to lower the temperature a bit and allow meaningful negotiations to move forward,” said Roland Rajah, the director of the international economy programme at the Lowy Institute in Sydney.

Xi comments, littered with Chinese proverbs and references to the march of history toward openness, were tempered. In previous speeches over the last year, he has struck a more nationalist tone and claimed China is ready to take it’s “due place in the world” and “fight bloody battles against our enemies” if need be.

In contrast to that speech, Xi said on Tuesday that China would never seek to “threaten anyone else” or overthrow the international system. “China has no geopolitical calculations, seeks no exclusionary blocs, and imposes no business deals on others.”