Xi Speech - Analysts react

"Xi's goal appears to have been twofold. First, portray China as a responsible actor and defender of globalism and free trade. Second, convince foreign firms and governments that China is entering a "new phase of opening up". Neither of these narratives are entirely convincing. It is true that Trump sparked the latest flare up in trade tensions. But the broader backdrop is that despite gradually opening up in recent decades, China retains much higher tariffs barriers than both the US and EU. It also ranks far worse on measures of openness to foreign investment. Meanwhile, hopes that Xi would make major new reform announcements were disappointed. " - Capital Economics

"We expected a very conciliatory tone, but the details heighten our conviction that China and the US will produce a grand bargain and avert the imposition of any significant tariffs this year. Our reservations over the longer term, however, persist.

"[...] We noted the comment that China holds the world's largest FX reserves, but aggressive UST sales as literally incredible. In any case, this was one veiled threat amid a speech littered with superlatives on the speed and necessity of opening." - Pantheon Macroeconomics

"Equities reacted positively to the tone of the speech with the Nikkei, Hang Seng and Chinese stock markets all up while S&P futures are higher by 1.4%. However, the reality seems to be that the speech contained very little new material and was largely a rehash of a speech given by Xi at Davos in January 2017." - Rabobank

"No doubt the world will be watching China closely. However, we are cautiously optimistic that China will follow through on its words, as reforms have moved to the top of the agenda. Xi Jinping has a strengthened mandate and more power to push through the reforms he has outlined for some years." - Danske Bank

"President Xi has succeeded in batting the ball back into the US court, so we now watch and wait for a response – a firm negative will send equities tumbling back down, but if Mr Trump nods his approval of this first step towards negotiation we might see stock markets edge up once more. Now is not the time to chase equities, particularly with earnings season just days away, but those who bought into last week’s lows will be keeping their fingers crossed that this bounce has a bit more life in it yet." - IG