China reportedly is planning to replace an industrial policy with a new program that promises greater access for foreign companies in a move to resolve trade tensions with the United States.
China’s top planning agency and senior policy advisers are drafting the replacement for President Xi Jinping’s “Made in China 2025” that would play down the country’s bid to dominate manufacturing and be more open to participation by foreign companies, The Wall Street Journal reported, citing people briefed on the matter.
The “Made in China 2025” policy prioritizes development of key industry sectors, from robotics and aerospace to clean-energy cars and has provoked alarm in the West.
The new plan is set to roll out early next year, when the U.S. and China are expected to speed up negotiations for a deal to end their trade war, according to the report.
Beijing’s changes would come in response to pressure from U.S. President Donald Trump, who launched a tit-for-tat tariff dispute with China this year aimed at balancing trade and giving American firms increased access to the world’s second-largest economy.
The program that Chinese officials call “Made in China 2025” has been one of the main targets in Trump’s trade war.
A less aggressive technology plan could address concerns raised by the Trump administration that Beijing unfairly subsidize Chinese companies and steals American intellectual property. U.S. Trade Representative Robert Lighthizer has been tasked with negotiating a deal focused on technology issues by March 1.
Chinese President Xi Jinping’s government has taken steps this week to soothe the U.S., including a plan to cut tariffs on U.S. cars to 15 percent from 40 percent. China also intends to resume purchases of American soybeans soon, according to Chinese government officials. China said last week it would deepen reforms in the area of science and technology and put more effort into protecting intellectual-property rights.
But U.S. officials have been skeptical about China’s willingness to back down from its global technology ambitions. While China has been playing down “Made in China 2025” since trade tensions flared, it’s been pushing ahead undaunted with its state-driven industrial policies, Lighthizer’s office said in a report last month.
China launched the plan in 2015, with the goal of becoming an advanced manufacturing leader within a decade. The initiative aims to develop local expertise in research and development and reduce the nation’s reliance on foreign technology. It targets 10 emerging sectors, including robotics, clean-energy vehicles and biotechnology.
U.S. stocks rose more than 1 percent following the report and after Trump's encouraging comments fueled optimism over trade negotiations between the United States and China.
Trump, in an interview with Reuters, said trade talks with Beijing were taking place by phone and he would not hike tariffs on Chinese imports until he was sure about a deal.
He also said he would intervene in the Justice Department's case against a top executive at China's Huawei Technologies if it would help secure a trade deal.
Recent media reports also say China has agreed to reduce tariffs on U.S. autos. That has raised hopes the two countries can make progress on their trade dispute. Investors worry that weaker global trade would dent economic growth and corporate profits around the world.
Material from Bloomberg and Reuters has been included in this report.
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