China’s president launched a robust defence of globalisation and free trade on Tuesday, drawing a line between himself and Donald Trump just three days before the US president-elect’s inaugural address in Washington.
“The problems troubling the world are not caused by globalisation,” Xi Jinping said in an address at the World Economic Forum in Davos. “They are not the inevitable outcome of globalisation.”
The spectacle of a Chinese Communist party leader in the spiritual home of capitalism defending the liberal economic order against the dangers of protectionism from a new US president underscored the upheaval in global affairs brought about by the election of Donald Trump.
“Countries should view their own interest in the broader context and refrain from pursuing their own interests at the expense of others,” Mr Xi said without mentioning Mr Trump by name. “We should not retreat into the harbour whenever we encounter a storm or we will never reach the opposite shore.”
He also warned that “no one will emerge as a winner from a trade war” and pledged that China would not seek to benefit from devaluation of its currency or a “currency war”.
Mr Trump’s victory in the US presidential election and Britain’s decision to leave the EU have shocked the global elite who gather every January in the Swiss mountain resort.
The US president-elect, who assumes office on Friday, has threatened trade wars with Mexico and China over recent weeks, and even cast aspersions on the EU as a “vehicle for Germany” that is on the brink of collapse.
Mr Xi used the WEF platform to draw a contrast, presenting himself as a leading international statesman.
In an apparent reference to Mr Trump’s threats to abandon last year’s Paris accord on climate change, Mr Xi hailed it as “a hard-won agreement” that “all signatories should stick to”.
In what many Davos delegates took to be a pointed dig at Mr Trump, Mr Xi seemed to suggest the President-elect needed to focus on more profound matters than he did during his campaign or since his election victory.
“As the Chinese saying goes: People with petty shrewdness attend to trivial matters while people with great vision attend to governance of institutions,” Mr Xi said.
The Chinese leader made a case for an overhaul of global governance systems, which he suggested were outdated and represented an old, Western-centric global order.
“The global financial market mechanism fails to meet the new requirement and is unable to effectively resolve problems such as frequent volatility in international financial markets and the build up of asset bubbles,” he told delegates.
Mr Xi argued that China’s economic growth had global benefits, with the world’s second-largest economy expected to import $8tn worth of goods and services over the next five years. He added that Chinese outbound investment over the same period would reach $750bn, exceeding expected foreign direct investments of $600bn.
As he was speaking, China’s State Council announced it would further open the country’s mining, infrastructure, services and technology sectors to foreign investment.
“China will keep its doors wide open,” Mr Xi said. “We hope that other countries will also keep their doors open to Chinese investors and maintain a level playing field for us.”
This year’s US delegation to Davos is led by outgoing vice-president Joe Biden and John Kerry, secretary of state. Even European leaders such as German chancellor Angela Merkel, who is seeking a fourth term in office, have stayed away from Davos this year, wary of the populist backlash that has reverberated around the world.
In a further juxtaposition of China’s confidence and a new, more isolationist era in the US and Europe, British prime minister Theresa May spoke in London about her vision of a “clean break” for the UK from the EU shortly after Mr Xi’s keynote address at Davos.
Shi Yinhong, professor of international relations at Renmin University in Beijing, said Mr Xi’s appearance at Davos also highlighted the Chinese government’s increased confidence about economic prospects at home. At this time last year, global markets were reeling from turmoil on China’s equity and currency markets.
It took months for Chinese leaders to address the twin crisis publicly, and Beijing dispatched two relatively unknown officials to Davos in January last year.
“Beijing is confident in its ability to deal with financial risks as it continues to reform the economy,” Professor Shi said. “Faced with pressures from Trump and Brexit, Xi is also willing to reaffirm China’s belief in an open and liberal global economic order and our opposition to trade protectionism and economic nationalism.”
The Chinese government will announce on Friday that the country’s economy expanded about 6.7 per cent last year, well within Beijing’s target range. On Monday the International Monetary Fund revised its estimates for global growth upwards, citing a stronger than expected Chinese economy and possible stimulus spending by the new Trump administration.
Some diplomats have, however, contrasted Mr Xi’s pro-globalisation rhetoric with protectionist policies back in China.
In a statement on Monday, Germany’s ambassador to Beijing said that “political assurances of equal treatment [for foreign companies] give way to protectionist tendencies”. Michael Clauss also urged a quick conclusion to Sino-EU trade talks, which he said would be “a clarion call showing that two of the world’s leading trading regions are determined to move forward towards more investment, more trade and more prosperity”.
Additional reporting by Liu Xinning
Letter in response to this article:
China likes to put its stamp on multilateralism / From Randhir Singh Bains, Gants Hill, Essex, UK
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