President Xi climbs the Magic Mountain

On Tuesday Jan. 17, China's President Xi Jinping will address the World Economic Forum in Davos, Switzerland. Surprisingly perhaps, he will be the first paramount Chinese leader to do so. The Davos Forum has always been one of the most significant multilateral discussion forums. The setting, high up in the Swiss Alps, is extremely imposing and adds to the prestige which attracts the leading players in both political and economic fields. Interestingly, though China's President will be attending, the controversial U.S. President-elect Donald Trump will not.

Davos has a well-known place in world literature too. In Nobel Prize-winner Thomas Mann's great novel "The Magic Mountain" the entire action takes place there, in a sanatorium where the characters are all awaiting a cure for their tuberculosis. Into this context Mann puts a great deal of symbolism regarding the ills of Europe at the beginning of the last century. And now, this week, Davos once more becomes a "magic mountain" where wise people meet to seek a cure for the economic ills of a world which is certainly less healthy than we would all wish.

But it is already clear what will be the most serious challenges faced by President Xi in Davos. China has never been very fond of the form of the economic world order assumed in the post-Cold War period, finding it too redolent of American hegemony. But, unexpectedly, it is the U.S.A. herself which appears intent on demolishing the current system, by unilaterally withdrawing from work on the TPP for example. The problem is that the immediate consequence of this sharp reversal of U.S. policy will not be a more balanced and multipolar economic order, but a gaping hole where global economic governance ought to be. As one of the only major powers to have developed a medium-term strategy for building growth and mutually beneficial economic interactions, China will find any such situation particularly disruptive, even if in the long term it is likely to lead to greater Chinese influence.

A case in point is the Paris climate change accord, endorsed by both China and the U.S. after years of tight negotiations with the Obama administration. It is unlikely that President-elect Trump will follow through on all the extreme rhetoric of the campaigning and immediate post-campaigning period. Nevertheless, the fact that since his election he has shown no sign of moderating any of his positions cannot but undermine confidence in prospects for the immediate future; and all economic planning depends to some degree on confidence.

In this context the eyes and ears of the world will certainly be on President Xi: everyone will be looking to China to inspire confidence by providing a source of stability. It will not always be comfortable for China to have so many expectations hanging on her; but in the current situation it would seem inevitable.

All the signs are that the President will speak strongly in favor of what he calls "inclusive globalization." By this he means an expansion of both bilateral and multilateral investment partnerships. As well as Chinese direct investment under the broad umbrella of the "Belt and Road" program, the Chinese leadership would welcome increased foreign investment in China.

This has been a fixed policy of China for several years now, and no aggressive intent will be shown by President Xi in firmly restating it now. Nonetheless, globalization has become a "hot potato" in Western countries. Both Britain's decision to leave the European Union and Trump's election itself can be seen to a large extent as a grassroots rebellion against the insecurities of globalization.

But China's support for the free trade agenda -- which used to be regarded as a paramount concern of the U.S.A. -- has been absolutely consistent since entry into the WTO in 2001, following which China has benefited hugely from her resulting access to international markets. China will have to continue making this case, and persuading other economies not to react to a suddenly uncertain world by retreating into protectionism.

And thus it is good that China's paramount leader will be showing his face at Davos this week. A few days on the "Magic Mountain" will not, of course, provide a cure for the ailing global economy, any more than it could automatically cure tuberculosis a hundred years ago. Nor can China possibly have all the solutions in a little black doctor's bag. But symbolism is also important. Whatever others may do, President Xi's attendance shows that China is prepared to take a hands-on role in global economic management; and the sight of China stepping up to the plate should bolster that confidence which is at the moment so sorely lacking.

Tim Collard is a columnist with China.org.cn. For more information please visit:

http://www.china.org.cn/opinion/timcollard.htm

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