World

China: No one wins from trade war

President Xi likens protectionism to locking yourself in a dark room - you keep out both the bad and good stuff

DAVOS: Chinese President Xi Jinping presented himself as a champion of globalisation yesterday, lecturing the world elite in Davos on the dangers of protectionism and the futility of trade wars.

He also urged climate change skeptic Donald Trump to keep the United States in the "hard won" Paris agreement, in a Davos speech that touted the world's largest polluter as a leader in the fight against global warming, reported Bloomberg.

The leader of the world's second-largest economy became the first Chinese president to address the World Economic Forum (WEF), where 3,000 prominent delegates from government, business, science and the arts have gathered.

His appearance comes as populist protectionism is on the rise across Europe and in the US, where November's election of Mr Trump as the next US president sent shockwaves through the global liberal order.

There is "no point in blaming economic globalisation for the world's problems", he said, saying that the process was not at the root of the Syrian refugee situation or the 2008 financial crisis.

"It's true that economic globalisation has created new problems, but this is not justification to write off economic globalisation altogether," he added.

Globalisation should be "more inclusive, more sustainable", he said, adding that existing global institutions are "inadequate" and should be more "representative".

BENEFITS

While acknowledging that globalisation was a "double-edged sword", Mr Xi argued that the benefits far outweighed the negatives and there could be no turning away from international economic integration.

"The global economy is a big ocean you cannot escape from," he said, likening goods, services and capital to waters that cannot be channelled back into landlocked streams and lakes.

"Pursuing protectionism is like locking oneself in a dark room. Wind and rain may be kept outside, but so are light and air."

"No one will emerge as a winner in a trade war," he added, in an oblique reference to Mr Trump.

Mr Trump has repeatedly accused China of carrying out trade policies that have led to massive US job losses and has threatened to slap tariffs of up to 45 per cent on the country's goods.

Beijing is seeking to pick up the mantle of world economic leadership set to be shrugged off by Mr Trump.

China supports building regional free-trade arrangements and opposes those that are "exclusive" or fragmented, Mr Xi said.

China is pushing two major trade pacts, the Regional Comprehensive Economic Partnership and the Free Trade Area of the Asia Pacific.

Mr Xi added that China has "no intention" to boost its trade competitiveness by devaluing the yuan currency or launching a currency war.

As for climate change, Mr Xi said "all signatories must stick to" the 2015 Paris deal to limit global temperature increases to well below 2 deg C, reported Bloomberg.

"Walking away" from the pact would endanger future generations, he said. - AFP

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