The World Economic Forum (WEF) Annual Meeting 2025 began in Davos, Switzerland, on January 20, coinciding with U.S. President Donald Trump's inauguration in Washington, D.C.

From January 20 to 24, nearly 3,000 attendees from around the world, including Trump, participated in this unofficial economic forum—known as the world economic barometer—either in person or virtually. As Borge Brende, WEF President and CEO, remarked before the event, the world is facing the highest level of global uncertainty in a generation, driven by geopolitical tensions, economic fragmentation and accelerating climate change. In the face of such immense uncertainty, finding solutions to these challenges has become the key focus for the global elite in 2025.

Global risks 

In 2024, the world economy had still yet to substantively recover from the impacts of the COVID-19 pandemic. Economic data from various international organizations are inconsistent, but overall, the global economic growth rate for 2024 was between 2.7 percent and 2.9 percent, approximately 1 percentage point lower than the 3.8-percent average growth rate of the first two decades of this century. Looking ahead, most economies are not optimistic. According to the Chief Economists Outlook report released by the WEF on January 16, over half of the economists surveyed anticipate a weakening economic outlook in 2025.

According to the Global Risks Report 2025 released by the WEF on January 15, state-based armed conflict, extreme weather, geoeconomic confrontation, misinformation and disinformation, and societal polarization are the five major risks facing the world in 2025. Since the report is based on a survey conducted in September and October 2024, when the outcome of the U.S. presidential election was still uncertain, it is important to reassess these risks and challenges facing the world economy in light of the now clearer international situation.

The ongoing Russia-Ukraine conflict, which has persisted for nearly three years, remains unresolved. Although a ceasefire agreement between Israel and Palestine is in effect, its implementation and the broader situation in the Middle East remain uncertain. During his campaign, Trump emphasized his foreign policy goal of mediating international conflicts and avoiding new wars. However, state-based armed conflicts are unlikely to end simply due to a shift in the U.S. political landscape.

Will the Trump administration raise tariffs, triggering a new round of geoeconomic confrontations? The World Bank warned on January 16 that if the U.S. increases tariffs, the global economic growth rate in 2025 could drop by 0.3 percentage points, from 2.7 percent to 2.4 percent. The U.S. itself would also face a larger impact, with its economic growth rate projected to decline by 0.9 percentage points. In 2018, during his first term, Trump imposed tariffs and initiated a trade war against China, aiming to reduce the U.S. trade deficit and bring manufacturing back to the country. However, in recent years, the U.S. trade deficit has surged to over $1 trillion, far exceeding the $750 billion deficit in 2016, before Trump's first election.

The theme of this forum was Collaboration for the Intelligent Age, focusing on the development potential brought about by international collaboration in emerging technologies such as artificial intelligence (AI). Some argue that, if properly utilized, emerging technologies like AI could increase global productivity by 10 percent in the coming decade. However, during Joe Biden's administration, the world's largest economy launched a tech war against the second largest economy, attempting to hinder China's technological progress through unilateral sanctions and technology blockades. The stance of the new U.S. administration on continuing this policy remains unclear. Nonetheless, such actions, which artificially divide global markets, do not align with the overall interests of the international community.

In his inaugural speech, Trump emphasized the need to reduce investments in green energy, expand oil and natural gas production, and continue developing the traditional automotive industry. On his first day in office, he also publicly announced that the U.S. would once again withdraw from the Paris Agreement, which aims to combat climate change. These policies stand in stark contrast to the collaborative approach to addressing climate change championed by the Davos forum.

The foreseeable future 

Although the global economic outlook appears uncertain, China remains a stabilizing force. According to the Global Risks Report 2025, China is one of the most influential players in global dynamics. The report underscores China's importance in geopolitics, energy transition, supply chains, technological innovation and international cooperation.

"Human society has once again come to a critical crossroads, hoping that the sun will break through clouds and mists to light up the way forward," Chinese Vice Premier Ding Xuexiang said in a special address at the China session during the opening plenary. Ding is also a member of the Standing Committee of the Political Bureau of the Communist Party of China Central Committee, which consists of the governing party's highest-ranking officials.

He called on all nations to provide more stability and certainty for the world and build a just world of common development. In his speech, he proposed four suggestions: jointly promote a universally beneficial and inclusive economic globalization; jointly uphold and practice true multilateralism; jointly foster new drivers and strengths for global economic development; jointly tackle major global challenges.

"Whenever world economic issues are discussed at Davos, a lot of attention would be on China," Ding said.

He pointed out that China is still a key engine for global economic development, as its high-quality development is making solid progress, green and low-carbon transition is accelerating across the board, and the country's reform and opening-up program is moving up to a higher level.

In 2024, China demonstrated a strong economic performance. In terms of constant prices, China's GDP grew by 5 percent compared to the previous year. More importantly, its green transition continued to make headway. More than 30 million electric vehicles were on the road in China by the end of 2024.

China's total import and export value in 2024 reached 43.85 trillion yuan ($6 trillion), setting a new record. Data show that in 2024, China traded with nearly all countries and regions covered by UN statistics, with trade growth with over 160 partners. Beginning on December 1, 2024, China granted zero-tariff treatment to 100 percent of tariff lines from the world's least developed countries with which it has diplomatic relations, resulting in an 18.1-percent increase in imports from these countries that month­—an acceleration of 5.8 percentage points compared to the first 11 months of the year. This demonstrates China's immense market potential, providing vast opportunities for other countries. "We sincerely welcome more foreign enterprises to invest and do business in China, and achieve greater success in sharing China's opportunities," Ding said.

China has consistently signaled openness to the world, taking practical actions to sustain and develop an open global economy. It has always advocated resolving differences through dialogue rather than confrontation, particularly with the United States. On January 17, Chinese President Xi Jinping spoke with then U.S. President-elect Trump by phone at the latter's request. Both sides expressed a desire to ensure that their relationship begins positively in the new U.S. presidential term. Such interactions have instilled confidence in achieving a smooth transition.

Although they cannot be considered the sole basis for predicting an improvement in China-U.S. relations with certainty, the global market undoubtedly welcomes the positive signals emerging from this relationship. A stable, manageable and orderly competitive relationship between China and the U.S. will serve as an essential foundation for global economic recovery.

Copyedited by G.P. Wilson 

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