China to set up free trade zone on southern island of Hainan

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China to set up free trade zone on southern island of Hainan

President Donald Trump said the US may be able to avoid a trade war with China if Beijing is willing to open its market more to American products, offering a path away from a confrontation over tariffs.

In a move to further force China to lower the billions of goods trade surplus running with the US, Trump unveiled tariff representing about $50 billion of technology, transport and medical products early this month, drawing an immediate threat of retaliatory action from Beijing.

"The sharp decline in March export growth after very solid performance in January and February suggests some exporters may have front-loaded exports [early] this year due to concern over the possibility of a Sino-US trade war after the US hiked tariffs on global imports on solar panels and washing machines", Lisheng Wang, an economist at the financial firm Nomura in Hong Kong, told Reuters.

Meanwhile, China's trade surplus with the 28-nation European Union, its biggest trading partner, shrank by half from the previous year to US$3.6 billion.

Exports contracted 2.7 percent from a year earlier to US$174.1 billion, down from the 24.4 percent growth for January and February, customs data showed yesterday.

Concerns of a trade war have been rumbling since last month after Trump threatened a series of tariffs on hundreds of billions of dollars of Chinese goods, sparking tit-for-tat warnings from Beijing.

Trump cited a speech by Chinese President Xi Jinping that the USA president interprets as a signal China is about to open its markets to more US goods.

Xi "said he's going to open up China".

"We hope both China and the United States can solve the disputes with wisdom and respect, in a constructive way", Spokesman Huang said.

Mr Xi had pledged a "new phase of opening up" on Tuesday in a keynote address to the Boao Forum for Asia in Hainan.

Xi, who now rules the world's second-largest economy without term limits, formally declared the new plans on Friday, Chinese state radio reported. "That could happen. That could be the big breaking story", Trump said during a March 13 speech in San Diego.

Further to that strategy, it has been learned that The Trump Administration is working on a program, which could cost billions of dollars, to compensate farmers suffering from Chinese retaliatory tariffs on U.S. crops.

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