Chinese president Xi Jinping warns against trade protectionism

Swiss president Doris Leuthard and Chinas president Xi Jinping. Picture: AFP/Getty Images

Chinese president Xi Jinping has highlighted the need for free trade and urged the world to “say no to protectionism,” delivering a strong rebuke to isolationist tendencies that helped fuel Donald Trump’s presidential election victory.

Focusing on the “double-edged” impact of economic globalisation in a speech that alluded variously to Charles Dickens, Greek mythology and Chinese proverbs, the leader of the world’s second-largest economy stressed the need for stability, new vision and perspective that has left many citizens disenfranchised and worried about the future.

His visit to the World Economic Forum (WEF) in Davos, Switzerland, is the first by a Chinese president and appears timed to position the country as a leader on the global stage as Western countries increasingly look inward.

“We must remain committed to promoting free trade and investment through opening up and say no to protectionism,” Mr Xi told an opening meeting of the WEF. “Pursuing protectionism is like locking oneself in a dark room. While wind and rain may be kept outside, so are light and air.”

“No-one will emerge as a winner in a trade war,” he said.

During his campaign, Mr Trump promised to raise tariffs on Chinese goods and declare Beijing guilty of keeping its currency artificially low. That would be a first step toward imposing sanctions. But in fact, for the past couple of years China has been intervening in markets to prop up its currency, not push it lower.

“China has no intention to boost its trade competitiveness by devaluing the renminbi, still less will it launch a currency war,” Mr Xi said.

Mr Xi made no direct reference to Mr Trump, but his vocal support for free trade and attack on protectionism could appear contradictory to Western countries who have complained about commercial restrictions in China.

Foreign companies complain Beijing has cut access to its markets for electric cars, computer security technology and other fields or pressing them to give know-how to potential Chinese competitors. Some say they are blocked from acquiring assets in China while Chinese companies have been on a foreign buying spree.

“The political leadership of China never ceases to assure us that further opening toward foreign investment ... is a priority,” Germany’s ambassador to China, Michael Clauss, said this week. “However, many companies keep telling us that their difficulties in these areas have increased.

“It often appears that somewhere down the line, political assurances of equal treatment give way to protectionist tendencies.”

Beijing also faces US and European complaints it is exporting steel, aluminium, solar panels and other goods at improperly low prices, threatening thousands of jobs abroad.

Aside from the economy, Mr Xi stepped into other areas of international consensus, calling the Paris accord to fight climate change a “hard-won achievement”, and urging signatories to “stick to it instead of walking away from it as this is a responsibility we must assume for future generations”.

Mr Trump, who has called climate change a Chinese hoax, has raised speculation that he might pull the US out.

The visit by Mr Xi caps the largest-ever Chinese delegation to Davos, including more than 100 officials and scores of business executives and embodying a tectonic shift at an event that started nearly a half-century ago among Europeans and Americans. He is the first Chinese head of state to visit Davos since the annual conferences began in 1971.

WEF founder Klaus Schwab said this year’s event is “not just a Western meeting”. One-third of the participants are from the emerging world.