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Home / Business / 2018 Summer Davos

Key role for China in global trade

By Chen Jia in Tianjin | China Daily | Updated: 2018-09-19 09:41
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Klaus Schwab, founder and executive chairman of the World Economic Forum (WEF). [Photo by Zou Hong / China Daily]

Schwab says rules-based system vital

China will play a leading role in shaping a new framework for global cooperation to maintain open markets and facilitate globalization, Klaus Schwab, founder and executive chairman of the World Economic Forum (WEF), said in Tianjin on Tuesday.

"China has the key role in the global transformation toward new development models," which are characterized by technological innovation and much more based on intangible and digital assets, he said.

The forum's founder made the remarks in a speech at Nankai University. He gave the speech during the Annual Meeting of the New Champions 2018, or Summer Davos Forum, with the theme of shaping innovative societies in the fourth industrial revolution.

It has been almost 40 years since Schwab first came to China in 1979, and the World Economic Forum has been associated with China since the beginning of the reform and opening-up process.

Supported by the technology innovation wave, further reform and opening-up will help China continually achieve its goals, not only by focusing on quantitative targets, but being mainly driven by high-quality standards, Schwab said.

On the same day, US President Donald Trump announced that additional tariffs on $200 billion of imports from China would be imposed on Sept 24, which marks a major escalation in trade tensions.

A calculation by Moody's indicated that about half of the products are intermediate goods, 30 percent are capital goods, and the rest are consumer goods.

 A VR display section outside the venue of the Annual Meeting of the New Champions 2018, or the Summer Davos Forum, in Tianjin. [Photo by Zou Hong/China Daily]

Jiro Tamura, a professor at Keio University, said at the forum that "We should be careful not to focus on the sort of negotiation tactics that Trump is using, and should instead concentrate on a discussion on free, fair and multilateral trade".

An integrated global system is the foundation of economic development, and "more globalization is needed", said Schwab, "although it is now in a difficult phase".

"Some countries are against globalization, but we have to support a more globalized community for cooperation. Governments should never forget that open markets and multilateralism are a major driver for creating wealth and welfare."

Schwab expected China to take more responsibility on improving the international integration of governments, business and civil society, given that anti-globalization is rising and disrupting the world's development.

"We must restore the vitality of international trade regimes to avoid disrupting global value chains leading to lower growth and greater geopolitical stress," said Schwab.

"Agreements are needed, which address the challenges of the global commons. In a multipolar world, such agreements cannot just be imposed by the most powerful countries anymore. To ensure both efficacy and legitimacy, they must be both co-designed and co-created," he added. "Now we have to make everything to keep a multilateral and open system, and a trade war will certainly at the end lead to a lose-lose situation."

The WEF founder believes that markets and businesses should adhere to a clear order and abide by principles and conditions which regulate fair competition and restrict unfair business practices. "This is the reason why we need rules-based globalization."

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