Davos 2017: China president calms stormy economic waters

President Xi Jinping’s historic opening address to the World Economic Forum offered welcome reassurance of business as usual to delegates.

President Xi Jinping shakes Professor Klaus Schwab's hand at WEF 2017 Davos opening

Valeriano Di Domenico

Having accepted a year ago the invitation to open this year’s World Economic Forum (WEF) meeting, China’s President Xi Jinping aimed to set minds at rest during this time of significant global economic and political upheaval.The premier’s speech ended an hour before British Prime Minster Theresa May was set to break her silence on the terms of Brexit, and acknowledged the difficulties of the global economy and how China saw its role in overcoming them.

Current problems not caused by globalisation

In his landmark speech – the first for a Chinese political leader at the economic and leadership institute's annual gathering in Davos – President Xi Jinping addressed the idea of economic globalisation and set out his view on its role in the world’s current difficulties.Referring first to the refugee crisis across North Africa and parts of the Middle East, then to the financial crisis of the last decade, he said these were not caused by economic globalisation, but by “war, conflict” and a lack of “effective financial regulation and governance.”“We should recognise that economic globalisation is a double-edged sword," President Xi said. "The pitfalls of economic globalisation have been laid bare and we need to take these seriously. Nothing is perfect in the world. It is true that economic globalisation has created new problems. But this is no justification to write off economic globalisation altogether.”He said it is the role of leaders to “cushion the negative impact, and deliver the benefits of economic globalisation to all countries and nations.”

Reform and focus on inclusion to overcome challenges

In his firm defence of the benefits of economic globalisation, President Xi Jinping recalled China’s past doubts about the benefits of free trade and its opportunities.He set out the responsibilities of countries and leaders in making globalisation’s benefits more uniform, and offered his views on how to restart global growth through innovation, regulation reform and greater inclusion. His comments offered an illuminating insight into China’s position and an unmistakable counterpoint to the more protectionist trade policy US president-elect Donald Trump is expected to lead.

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China's open-door policy to business

President Xi Jinping said China’s door is “wide open” to foreign people and businesses. He said he hoped that others countries would continue to reciprocate in this relationship as China seeks to integrate further into globalised trade. “We open our arms to foreign companies and people so they can get on China’s development express train,” he said as he outlined China’s success story and where its future was headed.Acknowledging the problems China’s economy faces, such as “excess capacity, an accumulation of financial risks" and some regional aspects to this in delivering fair and equal economic growth domestically, President Xi Jinping pointed out that despite these pressures of its new normal, China’s economic and social fundamentals remain sound.

One Belt, One Road to success?

To address the problems domestically and globally of uneven economic development, slower economic growth and unbalanced equitable and inclusive growth, President Xi Jinping said that China would continue to seek to work with investors and countries under the Belt and Road initiative. It would also seek to improve transparency, reform institutions and deliver more equitable growth.Delegates were left in no doubt the further opening up of Asia’s free trade areas, and a deepening of cross-border ties, are high on China’s agenda as it seizes the global trade initiative as the world’s second largest economy.

Cooperation and conciliation

Concluding his confident and conciliatory opening address that sought to deliver the responsible and responsive leadership agenda set out by WEF founder Professor Klaus Schwab and reaffirm China’s commitment to its economic globalisation, President Xi Jinping said that “trade wars are in no one’s interest” and cooperation is the way forward.Responding, Professor Schwab thanked President Xi Jinping for his important speech. “Globalisation is win-win and we have a common destiny,” he continued. “We are committed to the same objectives, which is to the make the world a better world, where everyone is equal and feels part of a society. It is all on us to make it happen. Here we join forces with you.”

For related news and features from Davos 2017, see our leadership & management section.

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