China warns of a global trade war
As annual World Economic Forum begins
CHINA’S president yesterday warned that a global trade war would be a disaster for the world economy in a thinly veiled attack on Donald Trump.
In a speech to the World Economic Forum in Davos, President Xi Jinping cautioned against protectionism as he launched a staunch defence of globalisation. The comments were widely seen as a rebuke to Trump who rode to power in the United States amid a popular backlash against free trade.
But one of Trump’s closest advisors said the US would win a trade war with China – before insisting the billionaire businessman wanted ‘free’ but ‘fair’ trade with the communist state.
Financier Anthony Scaramucci also echoed Trump’s support for a trade deal with Brexit Britain.
Trump, who is due to be sworn in as leader of the world’s most powerful economy on Friday, has accused China of ‘raping’ the US by artificially devaluing its currency. He has threatened to raise tariffs on Chinese goods to protect American manufacturers.
But addressing the global elite in Davos yesterday, President Xi said: ‘Protectionism is like locking yourself in a dark room, which would seem to escape wind and rain, but also block out the sunshine.’
In the first speech by a Chinese head of state to the annual summit in the Swiss Alps, he added: ‘No one is a winner in a trade war,’ and invoked the words of Abraham Lincoln’s Gettysburg Address.
‘No country should view its development path on its own,’ said President Xi. ‘Development is of the people, by the people and for the people.’
Scaramucci, the only member of the president-elect’s team in Davos, insisted the new administration would work with China.
‘But if they really believe in globalisation and the words of Lincoln then we need to find a way to get more symmetry in trade deals,’ he said.
Scaramucci insisted Trump backed ‘free, fair trade’ and said the president-elect is ‘not talking about isolationism’.
Trump has already indicated he backs a trade deal with the UK following the Brexit vote.
Scaramucci said Britain will be at the ‘front of the line’ for a trade deal with the US, reversing President Obama’s warning that the UK would be ‘back of the queue’ following Brexit. With the global elite who gather in Davos every year reeling from the Brexit vote and the election of Trump – and bracing for further upheaval through elections in Europe this year – China is looking to position itself as the guardian of globalisation and trade.
In a speech that might traditionally have been made by a US president, President Xi said: ‘There is no point in blaming economic globalisation for the world’s problems because that is simply not the case.’ In a sign of President Xi’s ambitions, China Daily, which often prints the official views of the Communist regime in Beijing, said: ‘Ready or not, China has become the de facto world leader seeking to maintain an open global economy and battle climate change.’
Nariman Behravesh, chief economist at IHS Markit, said: ‘President Xi gave a very rigorous and articulate defence of globalisation. However, actions speak louder than words.’