Many years ago, people used to tell me that one day, China would be the most powerful nation in the world; even above the United States. Of course, it was hard to imagine how that would happen and what it would mean.
Today, as Donald J. Trump ascends to power, and if he delivers on his promises, it is easy to see what China rising above the United States actually may mean.
The United States of America will continue to be the leader of the ‘free world’, perhaps even more so than ever before, while China will occupy America’s place in the corporate-controlled, globalised world.
While with Trump America seems to be attempting to rebuild itself from the inside out, in China its leaders see America’s nationalism as an opportunity to take over the place that may be vacated by the US, especially when it comes to trade.
Right now, while the US is just one more guest at Davos, China’s Xi Jinping is there speaking against what he calls a trade war. Xi implies that such a war would be detrimental to everyone who participates in it, while he positions his country as the next America, the new leader of the rapidly decaying globalisation.
In a speech that at any other time could have been shared by almost any president of the United States and in clear contrast to the postulates defended by President-elect Donald Trump, Xi Jinping has made his debut at the Davos Forum, the platform from which to stand In the world leader of globalisation and free trade.
Xi warned that “no one wins a trade war” and ruled out that his country is going to wage a currency war.
No one seems to be defending globalization as enthusiastically as the Chinese president, and he devoted much of his inaugural address to the 2017 edition of the World Economic Forum (WEF) to do just that.
“Many of the problems that the global economy have not come from globalization,” Xi said in his speech. “The financial crisis was not the result of globalization but of the lack of adequate regulation and the search for benefits at all costs,” he said.
In his speech, the Chinese leader spoke of the benefits of globalization, although he acknowledged that it is a “double-edged sword” that has aggravated the gap between rich and poor, between north and south. “The Chinese often say that dates grow on thorny shrubs. Nothing is perfect, “Xi said.
The first Chinese president to attend Davos advocated a new model of inclusive growth, with innovation as the main driver, and stressed the need to adopt a coordinated approach among countries.
“We must promote the liberalization of trade and investment by saying no to protectionism. Because no one will win the victory over a trade war,” Xi warned in clear reference to protectionist messages launched by President-elect Trump.
“Like it or not, the global economy is the big shrub we can not escape. Everyone should choose the best path and pace that suits their needs,” he insisted.
“We will be betting on a network of free and open trade agreements,” he said, in clear reference to the Trans-Pacific Partnership Agreement (TPP) passed by the outgoing Barack Obama Administration – though not yet ratified by Congress – and with which the US sought to isolate China commercially. And although he mentioned it in passing, no one in the room escaped his commitment to “we are not going to launch a currency war”.
Earlier, Trump’s only unofficial delegate to the WEF, Anthony Scaramucci, Trump’s economic adviser during the campaign, warned that US authorities must “be careful” regarding the strength of the dollar, after Trump considered that the currency is “too strong”.
The renminbi depreciated almost 7% against the dollar last year, as a result of a massive outflow of foreign capital from the country.
Xi regained the leading role of emerging countries and called for greater weight of developing economies in global governance forums and garnered the greatest applause from attendees when he championed the Paris agreement on climate change and the supposed need to implement it.
No one wanted to miss Xi’s speech at the World Economic Forum (WEF). Neither US Vice President Joe Biden nor International Monetary Fund (IMF) number two, David Lipton, nor the hundreds of executives, economists and journalists who crowded the main hall of the Congress Center. The Chinese leader was perfectly aware of the kind of audience that comes to these encounters, so he took advantage of it to deliver a catchy message:
“Over the next eight years, China will import products and services valued at $ 8 trillion, approve foreign investment projects for $ 650 billion, and invest $ 750 billion overseas. In addition, 700 million Chinese tourists will travel abroad.”
“China will keep the doors open for investment, we will not close them. Hopefully so will others,” he concluded.
With this message, it is clear that China used the Davos conference as a launchpad to offer itself to as the new leader of the corporate-controlled world. That position is one that the United States had occupied until now, but that may be vacant with the arrival of Donald Trump to the White House.