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Xi Jinping at the WEF in Davos: “no-one can win a trade war”

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Globalization versus protectionism, this could be the focus of the clash that prepares globally in the coming years between the two giants of the world economy: China and the US.

The elected president Donald Trump’s rhetoric, summarized in the “America first” slogan, focuses on the American interests protection on the commercial level, questioning the economic relations with the Asian opponent. After the sunset of ambitious Trans-Pacific Partnership trade agreement (TPP), the new administration seems willing to withdraw from international treaties favoring bilateral free trade agreements which may provide greater protection of American interests. A perspective that puts Beijing in alarm, as it sees in globalization and liberalization of trade the high road to continue on the growth path.

Chinese President Xi Jinping has therefore decided to take the field in person, by taking part today, with a delegation of the highest level, at the World Economic Forum in Davos, Switzerland. Never in the past any Chinese leader participated in the prestigious annual Davos summit, a novelty that well represents the importance of the moment, a few days before the assignment of the new president Trump at the White House, on 20th of January.

As expected, in his speech Jinping spoke in defense of globalization and free trade, while warning Washington against the danger of a trade war between the first and the second largest economy on the planet, from which no one would come out as a winner.

In a symbolic speech, the Chinese president has defended the outcomes of economic integration, considering it, at the same time, inevitable and unavoidable. “Many of the problems troubling the world are not caused by economic globalization,- Jinping said. “Whether you like it or not, the global economy is the big ocean you cannot escape from.” “We must remain committed to free trade and investment. We must promote trade and investment liberalization,” he added, stressing that “No one will emerge as a winner in a trade war.” A clear message for the new Trump administration, in order to deter any markedly protectionist choice.

While recognizing the negative effects of globalization on certain sectors of the economy and society, Chinese President considers isolationism a wrong reaction: “TThe right thing to do is to seize every opportunity to jointly meet challenges and chart the right course for economic globalization”.

With the Davos speech, Xi Jinping has a twofold purpose: to counter the protectionist narrative of President Trump and remind everyone that China is ready to take over the US, if the protectionist choice will be confirmed by the facts, in the role of global economic leader. Beijing is ready to propose a series of new free trade agreements, not only with the countries of the Pacific region, orphans of the TPP, but also with the Latin American continent.

Is Trump really inclined to leave the field open to the emerging superpower to focus only on defense of american internal market? In this case, Beijing will be able to create new conditions to sustain chinese growth?

2017 could be a year of great changes for the global economic order.

Luca Marchesini
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