Xi sheds light on market interventions in WSJ interview

Chinese President Xi Jinping is landing in Seattle tonight for his first official state visit to the US.

The Wall Street Journal managed to capture Xi’s first interview with foreign media since the Chinese stock market crashed over the summer. The interview consists of written responses from the president to a dozen questions the paper had to submit to China’s Ministry of Foreign Affairs before the visit.

The following is a summary of Xi’s comments:

The Chinese government’s intervention to halt the market’s plunge was necessary to “defuse systemic risks.” The rescue was akin to acts taken by governments in “some mature foreign markets,” the president said. Xi urged foreign investors to take the long view and compared the world’s second-largest economy to a vessel in rough seas. “Any ship, however large, may occasionally get unstable sailing on the high sea.”

He added that China’s slowing growth and market fluctuations won’t deter needed reforms to help it transition to more sustainable growth: “Like an arrow shot that cannot be brought back, we will forge ahead against all odds to meet our goals of reform.”

On the nearly 2% devaluation of China’s currency, Xi said the reduction in foreign reserves that followed is normal “and there’s no need to overreact to it.”

On China’s relations with the US, Xi said the two were working together on a series of pressing global issues, from agreements to reduce emissions linked to climate change and common efforts in negotiating limits to Iran’s nuclear program.

He said China wants to work with Washington on improving global order. “I don’t believe any country is capable of rearranging the architecture of global governance toward itself,” he said, adding later, “Facts have shown that the interests of China and the US are increasingly intertwined.”

One contentious issue is how China treats foreign businesses. Xi said his government treats all businesses fairly and brushed aside complaints by foreign business organizations that regulations are being used to hobble foreign firms, particularly US technology companies, and favor Chinese competitors.

On allegations about the cybertheft of trade secrets to benefit Chinese companies, Xi said, “The Chinese government does not engage in theft of commercial secrets in any form, nor does it encourage or support Chinese companies to engage in such practices in any way. We are ready to strengthen cooperation with the US side on this issue.”

In Seattle, Xi will see top executives of Apple, Microsoft, Boeing and Amazon.com on Tuesday and Wednesday. He will then go to Washington for a state dinner. He then flies to New York where he will address the UN.

Xi said China needs a military commensurate – with its “vast territorial land, sea and airspace and very long borders.” He added that the Chinese military has benefited the world by contributing more peacekeepers to UN missions than other permanent Security Council members and taking part in the removal of chemical weapons from Syria.

“In strengthening our defense and military building, we are not going after some kind of military adventure. It never crosses our mind,” he said. “China has no military base in Asia and stations no troops outside its borders. … The Asia-Pacific should be a cooperative ground for enhanced China-US coordination and collaboration rather than their Coliseum for supremacy.”

Xi said China is open to foreigners, but must be able to regulate the Internet to “safeguard the country’s sovereignty, security and development interests. … Freedom and order must be upheld side by side in both cyberspace and the physical world. Freedom is the purpose of order, and order the guarantee of freedom.” He didn’t address the issue of blocking foreign news sites, but said foreign companies must “do nothing to undermine China’s national interests and interests of consumers.”

“To understand today’s China, one needs to fully appreciate the Chinese nation’s deep suffering since modern times and the profound impact of such suffering on the Chinese minds,” Xi said. “Every country and every nation has a dream, and dream brings hope.”



Categories: Asia Unhedged, China

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