China Leader Warns Against Protectionism, Trade Wars
Chinese President Xi Jinping used his first appearance at the 47th World Economic Forum to mount a robust defense of globalization.
“It is the result of growing social productivity and is the natural outcome of scientific and technological advances”, Xi said in the forum’s opening plenary. “It is not something created by individuals or any countries”. He said many people are concerned about what has gone wrong with the world in recent years. But, he said, it was wrong to blame economic globalization, news outlets reported.
The Chinese leader told the WEF in Davos that the "migrant crisis had been caused by war, conflict and regional turbulence," not globalization. Similarly, the 2007/8 financial crisis was caused by "the excessive pursuit of profits and a lack of economic regulations," he said.
Speaking amid a growing populism movement in the West demanding greater protectionism from the worst effects of globalization, Xi said the world should not write off globalization altogether, but instead countries must "cushion its impact".
While acknowledging that a new path for the global economy remained elusive since the financial crisis, Xi warned against calls for increased protectionism, a message aimed at US president-elect Donald Trump, who has vowed to confront China on trade, DW reported.
"We must say no to protectionism," Xi said, likening it to "locking oneself in a dark room" to protect from danger but also depriving the room of "light and air".
He told countries not to pursue their own interests at the expense of others adding that "no one will emerge as a winner in a trade war."
The Chinese leader called for emerging markets and developing countries to be given a greater voice in global decision making. He also urged all signatories to stick to the Paris climate deal, agreed in December 2015, which Trump has vowed to cancel.
Having outlined the historic benefits of globalization to both China and the rest of the world, Xi told delegates that open markets also had their pitfalls, and has been “inadequate in terms of representation and inclusiveness”.
Rich-Poor Gap Persists
A significant number of global business leaders have questioned whether globalization has done anything to tackle inequality or mitigate the issue of climate change, according to a new survey by the audit firm PwC, CNBC reported.
"For the past 20 years, CEOs have been largely positive about the contribution of globalization to the free movement of capital, goods, and people. However, this year's survey respondents are skeptical," the survey, released on Monday evening at the World Economic Forum in Davos, said.
The survey by PwC was carried out between September and December 2016 with 1,379 CEOs responding from 79 countries with a range of online, postal, face-to-face and phone interviews. Forty-four percent of respondents said that globalization had "not at all" closed the gap between the rich and poor. Just 13% agreed that it had helped this inequality "to a large extent". The rest implied that it had had some effect.
PwC contrasts the latest results with its survey from 1998 when CEOs were positive about the drivers of globalization. It also highlighted in the 2017 survey that only 60% of CEOs believed that globalization has had a largely positive impact on improving the movement of capital, people, goods and information.
Four Major Tracks
During a pre-event press conference, WEF executive chair Klaus Schwab talked about the four major tracks for the annual meeting. These are: reinvigorating global economic growth; ensuring that market capitalism is more inclusive; addressing the fourth industrial revolution; and reinforcing global ties.
“We need to adapt to the new context and reinforce global ties. If we don’t address issues as a global community we will all fail,” said Schwab.
He warned that the current growth rate of 3% was not enough to solve the major challenges in the world such as the lack of social inclusion and youth unemployment.
“Every market economy will produce winners and losers,” he added, “but the system will only be sustainable if there is enough solidarity between winners and loser.”
Over 2,500 international leaders are attending the four-day WEF Forum in Davos that opened on Tuesday.