Chinese President Xi Jinping has promised to open the country’s economy further and lower import tariffs, in a move interpreted by one expert as an admission that escalating a trade war with the US would be China “shooting itself in the foot”.

Mr Xi said China would raise the foreign ownership limit in the automobile sector “as soon as possible”, lower import tariffs on products including cars, and push previously announced measures to open the financial sector.

“This year, we will considerably reduce auto import tariffs, and at the same time reduce import tariffs on some other products,” Mr Xi said on Tuesday (Australian time) at a speech in Hainan province.

The comments sent US stock futures, the dollar and Asian shares higher.

They followed rising trade tensions between China and the United States following a week of escalating tariff threats sparked by US frustration with China’s trade and intellectual property policies.

Dr Alice de Jonge, senior lecturer in Asian business law at Monash University, said the move was a recognition by China that engaging in any trade war would be “shooting itself in the foot”.

“Any attempt to stop imports into China would only hurt Chinese industry,” she told The New Daily.

China was potentially more vulnerable in any trade war because of the large number of services it imports from the US, Dr de Jonge said.

So potentially the US could do real damage to China by closing the likes of all the McDonald’s or Starbucks [in China] which would then lead to job losses in China which would hurt the government.”

The other factor favouring the US was the fact that it exports many components to China which are used in products produced and exported by China, De de Jonge said.

“If China puts any import barrier on components from the US, it may make it harder for China to export those products are more competitive prices.”

As to whether China’s backdown can be seen as a victory for Donald Trump, Dr de Jonge believed the US President would “certainly try to see it as such, but really it’s just another minor play in the major game” of gaining an upper hand in trade relationships.

And would it be seen as a loss of face in China?

“No, because the Chinese media will ensure it is portrayed as China being a good global citizen and acting responsibly.”

During his speech, Mr Xi made no direct mention of his American counterpart, Donald Trump, or the tariff spat.

But he mentioned themes that are key irritants in relations with Washington, repeating pledges to open China’s banking and finance industries to foreign ownership and to protect the intellectual property of foreign companies.

Mr Trump has threatened to raise tariffs on Chinese goods worth $US60 billion (A$78 billion) in response to complaints Beijing pressures foreign companies to hand over technology in violation of its market-opening pledges. Beijing responded with its own $US50 billion list of US goods for possible retaliation.

Mr Xi said China will take measures to sharply widen market access for foreign investors.

China will also speed up opening of its insurance sector to foreign investors, Mr Xi said.

Earlier in the week, Mr Trump’s new economic advisor, Larry Kudlow, said China was “in an impossible situation” and must stopping flouting the internationally agreed rules of free trade.

“Does China want to be part of the global economic and trading system, I ask you,” Mr Kudlow told a Chinese journalist, according to the Financial Times.

“They are in an impossible position, my friend. They cannot continue to break the laws of trade as they have for over 20 years.

“They have no supporters. Who is on your side? That’s what I am saying. It’s not a matter of saving face and this and that. It’s a matter of a newly first-rate, first world economy integrating itself into the rest of the world.”

-with AAP