Will Davos see China trump the US?

US officials set an aggressive tone ahead of President Trump's visit to Davos where his 'America First' agenda is getting a chilly reception. China, meanwhile, is enhancing its credentials as a leader in globalisation.

US Treasury Secretary Steven Mnuchin (L) and Communist Party of China Politburo member Liu He.
Reuters

US Treasury Secretary Steven Mnuchin (L) and Communist Party of China Politburo member Liu He.

Senior US officials hit back on Wednesday against suggestions that Donald Trump's "America First" agenda was hurting globalisation and trade, setting an aggressive tone ahead of the US president's visit to the World Economic Forum.

World leaders, including Indian Prime Minister Narendra Modi, Canada’s Justin Trudeau and Brazilian President Michel Temer, raised concerns this week at the gathering in the Swiss ski resort of Davos about growing protectionism, in remarks that delegates said seemed aimed at Trump’s policies.

German Chancellor Angela Merkel and French President Emmanuel Macron are also expected to speak later on Wednesday.

Under his America First agenda, Trump has threatened to withdraw from the North American free-trade agreement (NAFTA), disavowed the global climate change accord and criticised global institutions including the United Nations and NATO.

Trump is expected to arrive by Thursday and deliver a keynote address to the forum on Friday, mingling with the same elite "globalists" that he bashed during his 2016 presidential run.

In a press briefing in Davos ahead of his visit, US Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross defended aggressive trade actions taken by the United States and said more were to come.

"This is about an America First agenda. But America First does mean working with the rest of the world," Mnuchin said. "It just means that President Trump is looking out for American workers and American interests no different than he expects other leaders would look out for their own."

Ross said US trade actions were provoked by "inappropriate behaviour on the part of our trading counterparties."

American jobs

On Tuesday, for example, the United States slapped steep import tariffs on washing machines and solar panels, in moves billed as a way to protect American jobs. China and South Korea condemned the tariffs, with Seoul set to complain to the World Trade Organization over the "excessive" move.

"Many countries are very good at the rhetoric of free trade but in fact actually practice extreme protectionism," Ross said.

Many in Davos worry that a brighter world economic outlook could darken if geopolitical threats — from protectionism and climate change to cyberattacks and war — gather pace in 2018.

Trump, the first sitting US president to attend the forum since Bill Clinton in 2000, is a source of much of this anxiety after a volatile first year in office in which he has turned American foreign policy on its head.

China burnishes its global credentials at Davos

Reuters

Liu He, a member of the Communist Party of China's governing Politburo, at the World Economic Forum (WEF) annual meeting in Davos, Switzerland, January 24, 2018.

In stark contrast to the tone the US delegation set ahead of Trump's arrival was the rhetoric of the Chinese delegation, which is at Davos to enhance China's status as a champion of globalisation.

The man behind China's economic policy took the stage at Davos on Wednesday, pledging to push forward the country's four-decade reform and further open the country to the world.

Liu He, President Xi Jinping's main economic advisor, echoed his boss's lofty pro-globalisation words from last year's Davos summit, promising foreign companies greater access to China's financial services market, manufacturing and some service industries.

He promised to carry out China's financial services liberalisation, which was unveiled late last year.

Banking, securities and insurance industries will allow more foreign access, he said, adding that these measures would be implemented one at a time.

China will work to increase imports, do better at protecting intellectual property and "gradually lower the imported automobile tariff rate," he said.

Noting this year was the 40th anniversary of China's reform and opening policy that brought about the country's economic miracle, he said "we will continue to press our reform and opening policy in China."

Those market reforms were "behind China's growth," he said

Added to the Communist Party's 25-member politburo in October, Liu holds substantial clout in China and analysts forecast the 65-year-old will take on greater responsibilities in China's government this year.

Liu began his speech to the forum of global elite leaders with a rundown of Xi's three-and-a-half-hour address to the 19th Party Congress delivered last October, telling the crowd the address was the place to start for insight into China's policy priorities.

He reiterated China will focus on three battles in coming years: resolving risks, reducing poverty and controlling pollution.

China will make our "skies blue again," he vowed.

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