MNI POLICY: China Should Not Look Inwards; Allow 0% Tariffs

China should be on guard against narrow-minded nationalism and populism, instead focus on moves to engage more with the wider world to counter threats to its influence and established global networks, Liu Shijin, a top government advisor, wrote in an article on Sina.com.cn.

China should look to introduce policies including "zero tariffs" when necessary to show its leadership and good intentions, wrote Liu, a deputy director of the economy committee of the Chinese People's Political Consultative Conference.

"The zero tariffs, zero barriers, zero subsides policy should be announced when necessary even as the measures are hard to carry out," Liu said. "It is necessary to get ahead in rules setting for globalization and at least win moral support in the world," he added.

"China's trade advantage has nothing to do with tariff protection," he said.

Liu made the comments amid escalating U.S.-China tension. China's state media has also adopted hostile rhetoric toward the White House, calling for China to be more self-independent.

Without naming the U.S., Liu said policies could "form effective countermeasures against certain international forces".

Liu also warned on the potential for asset bubbles given increased stimulus policies in H1, with moves to stop excess capital flowing into sectors such as real estate and the stock market, he said.