The Davos stage
At economic forum, China argues for free trade
It is a tribute to the World Economic Forum held in Davos, Switzerland, that it is enough to say “Davos” to evoke the confluence of rich, influential people and organizations that gather there annually to discuss the world economy and to network with each other in a relatively private setting to try to make sure that they remain the economic elite of the modern world.
It began there again Tuesday, with some 2,500 bankers, businesspersons, academics and celebrities from 90 countries in attendance. Neither President Barack Obama nor President-elect Donald J. Trump was present. Mr. Trump has never been invited. The keynote speaker, in terms of importance, was Xi Jinping, the first Chinese president to attend. His country’s economy is still the second in size in the world, but America’s is considered either to be in decline or to be in a position of fluidity, with a somewhat dramatic change of leadership scheduled to take place Friday.
Mr. Xi’s address Tuesday included an interesting combination of ideas. He and other Chinese spokespersons have set out a strong position — a warning, in fact — against Mr. Trump’s threats to undertake an American trade war against the Chinese. The U.S. president-elect’s basic theme has been that China has been taking advantage of the United States economically, resulting in a trade balance adverse to America. He has indicated that he — presumably through the Republican majority in Congress — would impose taxes on Chinese imports into the United States. What he could presumably expect the Chinese to do to avoid these tariffs would be to open up China’s own economy to make American investment there easier and more profitable.
The price, of course, if it came to a trade war between the United States and China, would be paid on the American side by the low-income American consumer, who would find the shelves of Wal-Mart and other low-cost U.S. outlets empty of low-priced Chinese imports. Those consumers are said to be the same people who voted for Mr. Trump in November.
In addition to warning against trade wars — “Pursuing protectionism is like locking oneself in a dark room,” he said — Mr. Xi’s address endorsed globalization, including openness of Chinese markets, and included a sharp condemnation of some companies’ “excessive pursuit of profit.” Even though Mr. Xi’s position was orthodox communism and consistent with the populism that is showing itself in the United Kingdom’s Brexit vote and, arguably, in the U.S. 2016 elections, it was also basically hypocritical in that China itself in practice pursues basic capitalism disguised with a still-red coat. His presence at Davos was seen by some as an acknowledgement of concern about the impact that trade wars would have on the Chinese economy.
Davos is still a gathering that is useful for the world. These people talk with each other, and enough leaks out so that the rest of the world has some idea of what they might be up to. The newest basic fact not to forget is that the eight richest people in the world have as much combined wealth as the 3.6 billion people in the poorer half of the world, the results of a recent reputable study. Blowing up Davos would not change any of that.