The Chinese leadership has come to Davos, the snowy mountaintop in Switzerland, where the great and the good come once a year every January. Chinese President Xi Jinping opened proceedings at the World Economic Forum by warning countries against returning to protectionist trade policies, saying there would be no winners in a trade war.
Likening protectionism to “locking oneself in a dark room” to protect from danger but also depriving the room of “light and air,” he told countries not to pursue their own interests at the expense of others.
“No one will emerge as a winner in a trade war,” said Xi.
He also said economic globalisation has become a Pandora’s Box for many, but global problems are not caused by it. He said international financial crises were caused by the excessive pursuit of profits, not globalisation.
It is perhaps symbolic of the confusing new world we live in that as the Chinese praise globalisation, the leader of the free world in America seems busy trying to bury it. President-elect Donald Trump is threatening to impose tariffs on German cars made in Mexico.
Most Americans aren’t in Davos this year, they are too busy in Washington preparing for their new leader, but just about everybody else who matters is. In many ways the Davos Man, a name coined by Samuel P Huntington, a political scientist, is almost the epitome of a global citizen.
Highly mobile, well-educated and often able to speak more than one language, Davos Men are the face of globalisation. Davos men see their identity as a matter of personal choice, not an accident of birth. They are people who in Huntington’s words “have little need for national loyalty, view national boundaries as obstacles that thankfully are vanishing, and see national governments as residues from the past whose only useful function is to facilitate the elite’s global operations.”
Global Citizens share these aspirations, although sadly things have changed. National boundaries are no longer vanishing, but rather are in danger of being reintroduced. Donald Trump wants to build a wall between America and Mexico. In Britain Theresa May has taken the Brexit vote to mean that Britain is no longer a part of Europe, and her government will seek to impose tougher sanctions on people trying to move freely.
The populist votes of 2016 suggest that the Davos Man may be in retreat, or at least under attack. Donald Trump doesn’t like international elites, even though of course as a billionaire, he is one. His supporters see him as a straight-talking everyman, who in his own words (even if he borrowed them from Ronald Reagan) is aiming to “Make America Great Again.” It’s no surprise to learn that he’s never been to Davos, nor has Nigel Farage, the controversial British politician credited with masterminding the Brexit vote.
Much of the words this week from Davos are from politicians and businessmen trying to justify globalisation, and in a sense, their own existence. For the Chinese, globalisation has dragged the country out of poverty. The Indian government also sees the possibilities that access to markets and jobs can bring. It is elsewhere, in Britain and in America, that opposition to globalisation appears strongest. PwC, an accountancy firm, published a poll to coincide with Davos that concluded that while business leaders remain positive about the economic benefits of the free movement of goods, people and capital, they are beginning to question whether globalisation has done anything to narrow the gap between rich and poor or to stop global warming.
In my mind, greater globalisation, or the creation of global citizens who are not constrained by national borders, is not only admirable but also inevitable. The issues we face today are often global in nature: climate change, water and food security, international terrorism and other issues. They cannot be solved by retreating behind national borders and erecting walls and fences.
It appears that I am not alone in thinking this. Anthony Scaramucci, Mr Trump’s newly appointed public liaison official, told the World Economic Forum in Davos on Tuesday that the European and American elite had misunderstood Mr Trump. He said that it was wrong to assume that Mr Trump was opposed to free trade. He was simply seeking to ensure that trade deals were “symmetrical,” rather than organised as a means for the US to help other countries.
“If the Chinese believe in globalisation they have to reach to us and create this symmetry because the path to more prosperity is via the American middle class and workers,” said Mr Scaramucci. “Trump could be one of the last great hopes for globalism.”
Not everybody is convinced, or at least they are hedging their bets. America’s business leaders are falling over themselves to trumpet themselves as creators of American jobs, with General Motors announcing that it will be “insourcing” about 450 jobs from Mexico to Michigan. Chief Executive Mary Barra also said the company has already relocated more than 6,000 IT jobs back to the United States.
The benefits of free trade — affordable products for mass consumption and the raising of a billion people out of poverty — risk being replaced by concerns about the outsourcing of jobs to lower-cost markets and reversing that trend.
However, if Mr Scaramucci is correct, then President Trump could be transformational for world trade and globalisation, particularly if the American worker has more dollars in their pocket to spend every week.
