Thursday 18 January 2018

Xi trade war warning as China bids to raise profile

Chinese President Xi Jinping attends the World Economic Forum (WEF) annual meeting in Davos, Switzerland
Chinese President Xi Jinping attends the World Economic Forum (WEF) annual meeting in Davos, Switzerland

Noah Barkin and Elizabeth Piper

Chinese President Xi Jinping has offered a vigorous defence of free trade at the World Economic Forum in Davos in a speech that underscored Beijing's desire to play a greater global role as the United States turns inward.

In the first appearance by a Chinese leader at the annual meeting of political leaders, CEOs and bankers in the Swiss Alps, Xi also cautioned other countries against blindly pursuing their national interests - an apparent reference to the policies of Donald Trump.

The real estate mogul and former reality TV star will be inaugurated as US president on Friday, after campaigning on a promise to confront China more aggressively on trade.

He has vowed to renegotiate or ditch multilateral trade agreements and protect US industries from foreign competition by levying new tariffs on goods from abroad.

Xi compared protectionism to "locking oneself in a dark room" in the hopes of protecting oneself from danger, but in so doing, cutting off all "light and air".

"No one will emerge as a winner in a trade war," Xi said in a nearly hour-long speech in a large conference hall as an audience, including US Vice President Joe Biden, looked on.

He said Beijing would not boost its trade competitiveness by devaluing its currency, something Trump has repeatedly said China has done in the past, and urged all signatories of a landmark climate deal in Paris last year to stick to the agreement.

Mr Trump has criticised the deal and indicated he may pull the US out of it.

As Mr Trump vows to focus on American interests, Europe is increasingly preoccupied with its own troubles, from Brexit and militant attacks to the string of elections this year in which anti-globalisation populists could score gains.

This has left a vacuum that China seems eager to fill.

"In a world marked by great uncertainty and volatility the world is looking to China," WEF founder and chairman Klaus Schwab said before welcoming Xi to the stage.

"There is a vacuum when it comes to global economic leadership, and Xi Jinping is clearly aiming to fill it. With some success," said former Swedish Prime Minister Carl Bildt, reacting to Xi's speech on Twitter.

Xi's appearance took place at a time of rising tensions between Beijing and Trump, who broke with decades of precedent last month by taking a congratulatory telephone call from the president of Taiwan, which Beijing sees as part of China.

Although Xi painted a picture of China as a "wide open" economy, his government has come under mounting criticism from trading partners for its continued restrictions on foreign investments.

China, the world's top exporter, is heavily dependent on free trade and would be hit hard by a new wave of protectionism and a broader backlash against globalisation.

In his speech, Xi acknowledged that globalisation has become a "Pandora's Box", benefiting certain segments of society while harming others.

"It was the best of times, it was the worst of times," Xi said, quoting Charles Dickens.

But he added that globalisation was not to blame for the global financial crisis, which he attributed to an excessive pursuit of profits, nor for the flood of refugees from the Middle East. (Reuters)

Irish Independent

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