No winner in a trade war, Xi Jinping says in salvo against protectionism

VIDEO: REUTERS
Mr Xi, the first Chinese head of state to address the annual gathering, delivering his speech at the World Economic Forum yesterday in the Swiss resort town of Davos.
Mr Xi, the first Chinese head of state to address the annual gathering, delivering his speech at the World Economic Forum yesterday in the Swiss resort town of Davos.PHOTO: AGENCE FRANCE-PRESSE

Addressing WEF summit in Davos, he also calls on signatories to stick to Paris climate deal

DAVOS • Chinese President Xi Jinping warned against protectionism and urged signatories to stick to the Paris climate deal, as he pushed back against criticism of globalisation by incoming United States president Donald Trump and other Western populists.

"Pursuing protectionism is like locking oneself in a dark room. Wind and rain may be kept outside, but so is light and air," he told the World Economic Forum yesterday, the first Chinese head of state to address the annual gathering in the Alpine resort town of Davos.

"No one is a winner in a trade war," he said in an oblique reference to Mr Trump, who has accused China of trade policies leading to US job losses and threatened to impose tariffs of up to 45 per cent on the country's goods.

Mr Xi also urged Mr Trump, a climate change sceptic, to keep the US in the "hard won" Paris agreement, in a speech that touted the world's largest polluter as a leader in the fight against global warming.

Mr Xi said "all signatories must stick to" the 2015 Paris deal to limit global temperature increases to well below 2 deg C. "Walking away" from the pact would endanger future generations, he said.

MR XI ON THE GLOBAL ECONOMY

The global economy is a big ocean you cannot escape from. Any attempt to cut off the flow of capital, goods and people between economies and channel the waters in the ocean back into isolated lakes and creeks is simply not possible.


ON GLOBALISATION

The problems troubling the world are not caused by globalisation. They are not the inevitable outcome of globalisation.


ON THE INTERDEPENDENCE OF COUNTRIES

Countries should view their own interest in the broader context and refrain from pursuing their own interests at the expense of others.

Overall, he used his speech to support a global economic order that has helped fuel China's almost four-decade economic boom.

While a surge in protectionist sentiment threatens to slow the engine of China's growth, it also offers Mr Xi a chance to advance his goal of shaping global economic systems.

The Chinese President urged the world's elite to address the problems of globalisation, without turning away from economic trends fuelling decades of growth. Leaders should address the excesses of growth, such as growing wealth gaps, while embracing new industries and innovation, he said.

The world's second-largest economy represents a bastion of consistency to Davos attendees facing a string of European elections - in France, the Netherlands, Germany and possibly Italy - after the twin shocks of Mr Trump's victory and Britain's Brexit vote.

Mr Xi, who pledged to continue to overhaul China's economic structure, said he had no intention to devalue his country's currency to boost competitiveness.

Since taking power in 2012, Mr Xi has shown a desire to raise his profile globally, addressing the United Nations in 2015. Less than two weeks after Mr Trump's win last November, Mr Xi delivered a speech in support of free trade and globalisation at the Asia-Pacific Economic Cooperation summit in Lima, Peru.

Mr Trump, who is due to be inaugurated as president on Friday, has said he would withdraw from the 12-nation Trans-Pacific Partnership trade pact on his first day in office.

Mr Arthur Kroeber, the Beijing- based founding partner and managing director of Gavekal Dragonomics, said it was important for Mr Xi to be visible among the international business community at Davos, which is "the samba party for the globalisation crowd".

The event also gave Mr Xi a platform to demonstrate his overseas clout back home, where he is preparing for a mid-term reshuffle of the party's leadership ranks.

"It is in Xi's interests to take every opportunity he can and present himself as this leader who is powerful, strong and visionary, to give himself some international prestige," Mr Kroeber said.

Separately, in a meeting with US Vice-President Joe Biden yesterday, Mr Xi called for joint efforts by China and the US in building a long-term, stable and cooperative relationship to meet the interests of both countries and the world.

BLOOMBERG, REUTERS

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A version of this article appeared in the print edition of The Straits Times on January 18, 2017, with the headline 'No winner in a trade war, Xi says in salvo against protectionism'. Print Edition | Subscribe