Leader of Globalization. Does Xi Really Mean It?
Chinese President Xi Jin Ping spoke to defend globalization and advocated for free trade at the World Economic Forum in Davos. While the speech has been hailed by many, commentators around the world also question whether Xi was sincere about it. See the following:
Forbes: Xi Jinping’s Davos Speech Defends Globalization But Does China Really Mean It?
About this time of year, most years, journalists looking for inspiration can always turn their eyes towards the rarified atmosphere of a certain Swiss ski resort, find out what the assembled notaries are discussing, and produce a few thousand words of inconsequential burbling about technology, economics and social transformation. This year, however, the entire world is a target rich environment–excuse the pun–for the doleful hack in need of inspiration.
Fortunately, the organizers of the World Economic Forum meeting at Davos had the inspired idea of inviting Xi, President of the People’s Republic of China, who arrived to a red carpet welcome on Monday. As brand management strategies go, this is “Grade A,” ensuring the name Davos appeared on today’s front pages around the world, rather than in comment page reflection pieces entitled “Whatever happened to … ?”
Instead, Davos showed the world the urbane figure of Xi, quoting Dickens’ A Tale of Two Cities. “It was the best of times, it was the worst of times,” he said to a flutter of applause, laying an unambiguous claim on the sort of cosmopolitan sensibility that is de rigeur in these climes. Unfortunately, Xi also suggested Dickens was portraying the industrial revolution, rather the much bloodier French revolution that informs the story and constructs a metaphor for a progressive, liberal country, rising to global prominence, while its old enemy descends into bloody strife.
There is no escaping, however, that Xi delivering the opening plenary speech at Davos is also a powerful metaphor, the only question is, of what? Many headlines will refer to Xi’s defence of globalisation in the face of endless challenges. Other’s will complement the emerging helmsman for his pragmatism while sneering at Trump’s bombast.
But behind it all is public diplomacy; it is China sounding reasonable, conciliatory, patient, ready to assume the mantle of leadership that so many are so eager to thrust upon it. And the Davos crowd seemed to love it. Xi’s joke about “Schwab-onomics”– after Klaus Schwab, the founder and guiding spirit of Davos–was wooden, but everyone laughed politely anyway. There were no interruptions. No activists bursting in to scream obscenities, no impertinent questions about his private wealth, no mention of the routine censorship and suppression of dissent in China. Just Xi, holding court to a roomful of forlorn globalization disciples, searching for new hope.
The speech itself contained little of substance, many selective embellishments and quite a few glaring omissions, but was what everyone has come to expect of a Chinese leader on the world stage. The real problems, he said, were threefold: Not enough ‘driving force’ for reform and development. Inadequate global governance, by which he really meant that China did not have enough say over the rules and institutions. And lastly, unequal global development.
What is required, apparently, is innovation, and a new economic model to encourage it. One might conclude from these words that capitalism would be worth a try, but no, each country must develop “according to their own conditions,” he said. Absent from the speech was any mention of global imbalances, or closed capital markets and a history of currency manipulation. These were, however, stern demands that countries “honour promises and obey rules.”
Two developments accompanied the speech suggest a degree of predictable choreography for a set-piece performance such as this. The State Council issued new policy guidelines to help foreign investors in China, which only served to remind people that these same promises have been made many times before, indeed they were among the many conditions of China’s WTO accession agreement in 2001, but clearly sticking to those promises and obeying those rules is not in accordance with China’s conditions.
Then it transpired that “state investors bought shares to steady” a declining Chinese stock market, which reminds everyone that the Chinese state maintains its ‘driving force’ for a reason, which is to make markets do what they are told.
The difficulty of interpreting a speech like this is not really in the content of the speech itself–Chinese speeches are always about reading between the lines in any case–so much as understanding reactions to it. China watchers are used to sifting through the dense web of self-justification and misdirection that comprise a major address like this, but such a speech is not really a positive contribution to global dialogue so much as another rehearsal of China’s global outlook.
The setting, however, is of crucial importance as it creates the impression that China is keen to support globalization. An impression Klaus Schwab and the Davos elite fell over themselves to endorse. And what this rapturous reception signifies is that globalization, increasingly abandoned in the West, thinks it has found a new champion in the East.
Towards the end of his address, Xi uttered one of those amusingly mistranslated aphorisms when he said “no pie falls from the sky” when he likely meant “no such thing as a free lunch,” a saying which the applauding dignitaries appeared keen to refute.
China’s Xi Jinping Seizes Role as Leader on Globalization
‘No one will emerge as a winner in a trade war,’ Chinese president says
The Wall Street Journal,
Chinese President Xi Jinping issued a full-throated defense of international trade and economic integration before a packed hall here, as doubts about the merits of globalization mount in the U.S. and elsewhere in the West.
“No one will emerge as a winner in a trade war,” Mr. Xi, the leader of the world’s second-biggest economy, said in an hourlong speech on Tuesday to members of the world elite gathered for the annual World Economic Forum. “Pursuing protectionism is just like locking one’s self in a dark room. Wind and rain may be kept outside, but so are light and air.”
The Chinese leader’s message comes as the U.S. prepares to inaugurate President-elect Donald Trump, who has voiced skepticism about the benefits of free trade to the U.S.
Mr. Xi sought to portray Beijing as a benevolent power intent on upholding an international order that has boosted common prosperity. He exhorted world leaders to “join hands and rise to the challenge.”
The speech was portrayed by some who heard it as a response to politicians in the U.S. and Europe who are turning their focus inward.
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“There is a vacuum in global leadership. Xi sees it and he seizes it,” said Carl Bildt, a former prime minister of Sweden, who was in the audience. “If the U.S. does take a more mercantilist route, overall the Asians and Europeans will have to combine to preserve global free trade.”
China has been one of the biggest beneficiaries of globalization, which opened the way for the country, with its vast and relatively low-wage workforce, to become the world’s factory floor. Inexpensive goods manufactured in China have flooded the planet.
That shift helped lift hundreds of millions of Chinese from poverty. But it was also a factor that contributed in costing millions of workers in the West their jobs, fueling mounting suspicion of transnational economic integration and the current antiestablishment backlash in politics in much of the developed world.
“Some people blame economic globalization for the chaos in our world,” Mr. Xi said. He dismissed the idea—and acknowledged that globalization had resulted in growing income inequality within many countries.
“It’s important that China is saying that there are important benefits of globalization and acknowledges that there are many problems that have to be worked through,” said David Lipton, first deputy managing director of the International Monetary Fund.
In many ways, Mr. Xi—and his government—are deeply ambivalent about globalization. Mr. Xi is an unabashed nationalist, who resents the West’s lecturing on human rights and democracy. He has sought to bulk up state-run companies and kept China’s internet isolated behind its Great Firewall.
Mr. Xi stressed that no power should attempt to dictate to other countries a specific path. Development, he said, is “of the people, by the people, and for the people,” borrowing a phrase from U.S. President Abraham Lincoln’s Gettysburg Address.
Some in the audience noted irony in the appeal from the leader of a country that has undermined competition.
Foreign companies and governments complain that China has moved to restrict foreign companies’ access to its markets, while buying up technology and assets from firms abroad. The U.S. and Europe also accuse China of selling goods from steel to solar panels at improperly low prices.
“Here, we have the global elite embracing Xi as the anti-Trump,” said Lawrence Freedman, emeritus professor of war studies at King’s College, London.
Mr. Trump has pledged to defend American firms and workers against foreign competition and impose tariffs on imports from China and Mexico, among other countries. Mr. Trump also accused China of manipulating its currency to boost exports.
“China has no intention to boost its trade competitiveness by devaluing the renminbi, still less will it launch a currency war,” Mr. Xi said.
China’s yuan weakened almost 7% against the dollar last year, nearly double the drop in the year earlier. In recent weeks, China’s central bank has stepped up its effort to prop up the yuan as Beijing pledges to keep the currency largely stable.
In his speech, Mr. Xi built a case that China should have a greater formal role in guiding the world economy. He gave his endorsement to the 2015 Paris agreement on carbon emissions, calling on countries to “stick to it instead of walking away from it.”
Mr. Trump has called climate change a hoax, fueling speculation that he might pull the U.S. out of the accord.
Some in the audience questioned the readiness of China to adopt the leadership role that Mr. Xi was viewed as mapping out.
“In these times of a lack of leadership, particularly in Europe, it was quite impressive,” said Werner Hoyer, president of the European Investment Bank, which is owned by the 28 member states of the European Union.
But when asked if he thought that China’s institutions were ready to take on the leadership of the world economy, Mr. Hoyer said: “Not yet.”
Mr. Xi’s legitimacy at home depends in large measure on his ability to manage a continued slowdown in China’s own economy while continuing to assert Chinese territorial claims despite U.S. opposition.
Mr. Xi said China’s economy has entered a “new normal” of slower but more sustainable growth. Household consumption and services have become new growth drivers for the economy, Mr. Xi said.
He said China’s economy grew at 6.7% last year, within the range of between 6.5% and 7% targeted for 2016.
Still, that growth came through easy credit and other stimulus that revved up industries and the property market, contributing to overcapacity and soaring house prices. Mr. Xi acknowledged those headwinds. China’s leadership has made fending off asset bubbles a key economic task for 2017.