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 Xi, delivering a keynote address to some 650 business executives and
other guests in Seattle, touched on a litany of issues that have
strained U.S.-China ties.
China will not manipulate its currency to boost exports and will
never engage in commercial theft, he said, adding it will not
discriminate against foreign businesses, will speed its market
opening and make efforts to improve human rights.
"If China and the U.S. cooperate well, they can become a bedrock of
global stability...," Xi said. "Should they enter into conflict or
confrontation, it would lead to disaster for both countries and the
world at large."
However, despite his reassuring comments, Xi faces questions about
actual government policies. He will likely be pressed for specifics
as he meets this week with tech and other top business leaders
before attending a black-tie state dinner at the White House hosted
by President Barack Obama.
About 100 people gathered in downtown Seattle earlier on Tuesday to
protest against human rights abuses in China, the first of what
could be a series of demonstrations against Xi's visit.
Xi's U.S. visit ends with an address at the United Nations.
LEVEL PLAYING FIELD
Xi came under a barrage of criticism before his speech over China's
treatment of U.S. businesses operating in his country.
"This week a number of significant deals are being announced
alongside President Xi's visit that exemplify American companies'
commitment to support China's development both with capital and with
world-class technologies," said U.S. Secretary of Commerce Penny
Pritzker.
"Nevertheless, we and our companies continue to have serious
concerns about an overall lack of legal and regulatory transparency,
inconsistent protection of intellectual property, discriminatory
cyber and technology policies, and more generally the lack of a
level playing field across a range of sectors."
John Frisbie, president of the U.S.-China Business Council, a
co-sponsor of Tuesday's event, said the group's latest survey of its
members "shows a continued steady erosion of confidence in the China
business outlook."
Writing in an article in China Business Review before Xi arrived,
Frisbie said: "China’s ambitious economic reform program is entering
its third year, but with little impact so far on the issues faced by
American companies — put simply, China has yet to begin removing
market-access barriers across many sectors of China’s economy and
build a fairer competitive environment. Business is looking for
tangible signals of reforms, but not getting it."
Scott Kennedy, Director of the Project on Chinese Business and
Political Economy at the Center for Strategic and International
Studies in Washington, D.C., praised Xi's strategy.
"Xi played a very good hand," Kennedy said. "He gave comprehensive
verbal reassurance combined with limited actual concessions. This
will avoid full-blown reaction from the U.S. government and the
business community."
CYBER SPYING ACCUSATIONS
Responding to allegations that China has been behind cyber attacks
affecting U.S. business and government databases, Xi reiterated that
China, too, had often been a victim.
"The Chinese government will not in whatever form engage in
commercial thefts or encourage or support such attempts by anyone,"
Xi vowed.
White House officials said cyber spying will be a key part of
discussions between Obama and Xi, but they did not expect the United
States to level economic sanctions against China for cyber espionage
ahead of Xi's arrival in Washington.
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No mention has been made during the early stages of Xi's visit about
an American businesswoman held for six months in China on suspicion
of spying and stealing state secrets.
Xi said China's economy was on course for fast growth and Beijing
remained committed to financial reforms and an open economy.
"China will not go backward in this process," Xi said at a forum for
U.S. and Chinese governors in Seattle.
The Chinese president faces questions about his stewardship of the
economy, which has been slowing after years of rapid growth, and
about his government's heavy intervention in stock markets after key
indexes tumbled over the summer.
The United States will urge Xi to avoid "quick fixes" for its
economy, such as devaluing its currency, to boost exports, White
House chief economist Jason Furman told Reuters.
China's recent loosening of controls on the yuan currency "caused
turmoil" in global financial markets and U.S. officials plan to
raise the issue of China's volatile stock market, Furman said on
Tuesday.
Xi said: "We are against competitive depreciation, or currency war,
and will not lower the renminbi exchange rate to spur exports."
'NO HOUSE OF CARDS'
Xi's meetings with Obama and U.S. business leaders offer the chance
to bolster the president's stature at home, building on a
high-profile military parade earlier this month to mark the end of
World War Two, while deflecting attention from China's recent stock
market rout, slowing economy and a chemical explosion at a Tianjin
warehouse that killed more than 160 people.
Xi said the Chinese people supported his anti-corruption campaign,
which has touched every level of the government, Communist Party and
military. The crackdown would continue and was not a product of
factional struggles, he said.
“There is no power struggle in this. There is no House of Cards,” Xi
said, drawing laughter from the audience with his reference to the
popular U.S. political drama.
In a reminder of potential flashpoints in ties, however, the
Pentagon said on Tuesday that a Chinese aircraft performed an unsafe
maneuver during an air intercept of a U.S. spy plane off China's
northeast coast last week.
Among the few concrete agreements expected to result from the Obama-Xi
summit has been a confidence-building plan aimed at reducing the
risk of aerial collisions between warplanes in areas such as the
South China Sea through adoption of common rules of behavior.
(Additional reporting by David Brunnstrom and Matt Spetalnick;
Writing by Ken Wills; Editing by Lisa Shumaker and Paul Tait)
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