<p>Three thoughts on the Boao Forum opening speech by China President Xi Jinping.</p><p><b><span style="text-decoration: underline;">“Win-win” speech</span></b></p><p>President Xi delivered a speech that appears conciliatory. He expressed the desire to achieve a “win-win” outcome and considered that dialogues are the way to resolve disputes. He also emphasized the need to avoid “Cold War mentality” of zero-sum game thinking.</p><p>In his speech, President Xi reiterated that China will open its door wider instead of closing it. China will further open up its domestic economy by introducing measures to open up the financial markets as well as strengthening the protection of intellectual property. President Xi also highlighted China will voluntarily increase imports by reducing import tariffs on automobiles and other products.</p><p><b><span style="text-decoration: underline;">Bromance</span></b></p><p>The bromance friendship between President Xi and Trump is flourishing. Trump hailed the warm relationship between both of them and claimed that they will “always be friends.” He also responded positively by thanking President Xi’s “kind words” on trade. In line with Xi’s conciliatory tone, he emphasized the desire to “make great progress together’. This is a welcome relief after recent tic-for-tac rhetoric between both sides in the ongoing trade war.</p><p><b><span style="text-decoration: underline;">Devil is in the details</span></b></p><p>The proposals in President Xi’s speech are not new. China had previously stated the need to open up its markets before the trade war started. It is just that the details have not been matched with action yet. Even White House Press Secretary has responded to Xi’s speech by calling for “concrete steps and action.”</p><p>Among the key reforms, financial and insurance market liberalisation reforms are the most anticipated ones, followed by other measures such as opening up of China auto, aircraft and ships sectors.</p><p>Equity markets enjoyed a rally after the softer tone from Xi’s speech. Now, we await the details before a more sustainable rally can unfold.</p><p><b>Edmund Chan, CFA</b></p>