Chinese President Xi Jinping delivers a keynote speech at the opening session of the 2017 World Economic Forum annual meeting in Davos, Switzerland, on January 17 (XINHUA)

For the first time, China's top leader addressed global issues in the Swiss ski resort of Davos, where political and business elites from across the planet gathered at the 2017 World Economic Forum (WEF) annual meeting. Chinese President Xi Jinping attended the opening session of the event on January 17, a key part of his state visit to Switzerland at the beginning of this year.

The WEF made "responsive and responsible leadership" this year's theme. In view of rising global uncertainty, driven by populist and anti-globalization sentiment, effective leadership is crucial. In Xi's keynote speech in Davos, he called on the world to "jointly shoulder responsibility of our times and promote global growth."

The Davos forum is not only the world's premier annual elite fest, but is also seen as a weathervane of the global economy. This year's gathering embraced the largest ever Chinese delegation since the Chinese Government first took part in 1979, following the start of the nation's reform and opening-up drive one year earlier. Over the past three decades, China has become the world's second largest economy and the WEF Annual Meeting of the New Champions (also known as Summer Davos) has also gained a foothold in China. Since 2007, two Chinese cities, Dalian and Tianjin, have taken turns to host the event.

"The Chinese president's Davos attendance shows China's active stance in participating in global governance at the elite forum platform," Peng Zhiwei, associate professor and Director of the Department of International Economics and Trade at Nankai University in Tianjin, told Beijing Review. Peng is also a member of the agenda panel at Summer Davos Tianjin.

"Chinese leaders have attended Davos for three consecutive years. This implies that they pay much attention to the WEF's role in promoting consensus on global challenges," Peng said. "The WEF always presents its foresight on world economic trends. Since its establishment, the forum has contributed much to promoting cooperation and narrowing differences as well as improving global governance."

According to Peng, Xi's presence at the Davos forum is of great significance to the world given the current wave of populism in many developed economies, which has a destabilizing effect likely to alter the international landscape. Therefore, there is a lot of curiosity about the next step of the world's second largest economy.

Xi spoke on globalization, trade protectionism, climate change, development and China's economy during his Davos speech, giving a Chinese perspective to global issues and clearly marking out a strategy for global recovery and prosperity.

Globalization irreversible

Historically, the West initiated economic globalization and benefited from the course. Yet now, some blame this trend for domestic problems. The anti-globalization voice is growing louder than ever in the West, with the world economy under threat from isolationism and protectionism.

At Davos, Xi illustrated the importance of economic openness, pointing out that "many of the problems troubling the world are not caused by economic globalization. "Global economic depression strains the relations between growth and distribution, between capital and labor, and between efficiency and equity. Both developed and developing countries have felt the punch," he said.

To counter such problems, "we should strike a balance between efficiency and equity to ensure that different countries, different social strata and different groups of people all share in the benefits of economic globalization," Xi suggested.

Fan Yongpeng, a research fellow with the China Institute at Fudan University in Shanghai, echoed the president's call. "Global issues generated in the course of globalization can't be solved by one country in a unilateral way. Even a super power like the United States becomes unwilling to undertake more work in international affairs," Fan told Beijing Review.

Fan explained that despite various challenges at home and abroad, China works together with the international community. For example, at the G20 Hangzhou Summit last September, Xi proposed a number of constructive ideas on global governance.

Workers manufacture an electric bus at a factory of Chinese automaker BYD in Lancaster, California, the United States, on September 23, 2016 (XINHUA)

Growth prospects

Global economic growth is a quintessential topic at Davos, as the world economy has remained sluggish for years. Meanwhile, the gap between the rich and the poor and between the South and the North is widening. To realize steady and healthy growth, as Xi pointed out, the world needs to presently address three critical issues--a lack of robust forces driving global growth, inadequate global economic governance and uneven global development.

Peng believes new growth sources have yet to emerge and fresh drivers of development remain in incubation. He told Beijing Review, "We need to pay attention to the obstacles that hinder growth."

According to him, trade protectionism in various forms is rising. Donald Trump's U.S. presidency increases the risk of trade conflict between the United States and other countries, he warned.

However, Xu Hongcai, Deputy Chief Economist at the China Center for International Economic Exchanges (CCIEE), is optimistic about global economic prospects in 2017. "In 2016, the world economy grew 3.1 percent year on year. I predict that figure will reach 3.3 percent and global trade will post a 2-percent growth in 2017. The world economy is still on the way toward recovery," Xu told Beijing Review.

He explained, "The U.S. economy had a robust recovery in the third and fourth quarters of 2016. It is expected that the Trump administration will adopt an expansionary fiscal policy combined with a tight monetary policy. I think the U.S. economy will perform solidly this year."

Meanwhile, China's economy will maintain stable growth in 2017, perhaps at around 6.5 percent, according to Xu. He said along with economic recovery in the United States and Europe, China's exports would jump, which would drive Chinese economic growth this year.

During his presidential campaign, Trump repeatedly threatened to impose high tariffs on Chinese imports in a typical gesture of trade protectionism. Many worry that Trump's policy could trigger a trade war with China.

Xu stressed that trade protectionism will benefit no one. "Trump promises to revive U.S. industry. He is very likely to pursue an expansionary fiscal policy, including tax cuts and investment increases in infrastructure construction. This will intensify the U.S. balance of payments deficit. Thus, the U.S. market needs foreign investment, including China's," Xu said.

At the same time, China also welcomes the participation of U.S. businesses in building the Silk Road Economic Belt, a multilateral economic cooperation initiative proposed by Xi in 2013. The potential is great to enhance economic and trade cooperation between China and the United States, Xu asserted.

Xi used an appropriate metaphor to depict trade protectionism in his speech in Davos, "Pursuing protectionism is like locking oneself in a dark room. While wind and rain may be kept outside, that dark room will also block light and air. No one will emerge as a winner in a trade war."

China's evolving role

In Davos, Xi also reiterated China's willingness to share the great opportunities presented by its development with other countries. "We will open our arms to the people of other countries and welcome them aboard the express train of China's development," he said.

Over the past three decades, China has maintained rapid economic growth. Despite a fragile global situation, the Chinese economy grew 6.7 percent year on year in 2016, still one of the highest in the world, according to China's National Bureau of Statistics. In addition, China remained the top engine of global growth last year by contributing 33.2 percent of the world's economic expansion.

In terms of trade, China has become the world's largest cargo trader for four consecutive years as well as being the globe's largest exporter and second largest importer. China has opened 104 of its 160 services sectors to foreign investors according to its membership commitment to the World Trade Organization (WTO). The country is also making efforts to reduce tariffs and promote free trade with the rest of the world.

"China provides the world with a huge market, so other economies have benefited from China's economic development," said Zhao Ping, Research Director at the Academy of China Council for the Promotion of International Trade, in an interview with Beijing Review.

She believes that China will play a bigger role in advocating free trade and participating in reform of global governance infrastructure. "In future, China should work to close the global North-South divide and promote inclusive and sustainable development that seeks common interest," Zhao said.

Copyedited by Dominic James Madar

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