As the spectre of new trade wars looms following United States president Donald Trump’s inauguration, the Davos crowd of policy and business leaders has been looking to China for answers on how to respond to the climate emergency amid a rapidly transforming world order.
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Day one of annual meetings at the World Economic Forum (WEF) at the Swiss alpine resort on Tuesday saw Chinese vice-premier Ding Xuexiang take centre stage, alongside leaders such as WEF founder Klaus Schwab, WEF president Børge Brende, and European Commission president Ursula von der Leyen.
Beijing’s profile at the Davos meet has been growing. In his speech, Ding, the first senior leader from China to address global concerns about the country’s economic and foreign policy priorities, said China does not want trade disputes and signalled that it is committed to “make greater contributions to the global climate response”.
There needs to be a “consistent approach” in addressing major global challenges like climate change, said Ding. “The international community should work together to accelerate the energy transition in an equitable, orderly and just manner, keep the new energy industrial chain stable, and promote green products and technologies.”
This would “prevent economic and trade frictions from impeding the process of the green transition and avoid the erection of green barriers that could disrupt normal cooperation”, Ding stressed, but made no direct mention of Trump or the US.
Trump’s return to the White House has coincided with the kick-off of the global Davos summit. At the annual meeting, other leaders such as von der Leyen also spoke out against damaging trade wars. The European Union would be ready to negotiate with the US, and also seek to improve ties with China, said von der Leyen.
Ding, in his special address, noted the threat of “imminent tariff wars and trade wars, an ongoing tug of war between the forces for and against economic globalisation, and intense rivalry between multilateralism and unilateralism”. “The global governance system is undergoing profound adjustments,” he said, as he called on Davos leaders to provide “more stability and certainty for the world”.
China “hopes that the sun will break through clouds and mists to light up the way forward”, he said. In terms of foreign trade, it will not seek trade surplus but want to import more competitive quality products and services to promote balanced trade.
Chinese electric vehicle (EV) makers have met with strong resistance in their push into the European markets, as tariffs add to import costs. In the US, Trump announced on Tuesday planned policies, including a 10-per-cent tariff on China come 1 February.
The tariffs would come on top of levies that he slapped on more than US$300 billion worth of Chinese imports during his first term. These tariffs were kept in place by former US president Joe Biden who imposed additional levies on Chinese EVs, solar cells, semiconductors and advanced batteries.
Against this backdrop and with Beijing’s attempt in recent months to boost domestic consumption to prevent an economic fallout, Ding warned against any party exercising protectionism, and said there would be “no winners in a trade war”.
At a fireside chat with Schwab, he addressed a question on China’s analysis of what would be in store for the world if it was “divided into two systems”, presumably one driven by the Chinese economy, and the other led by the West.
Ding said China is seen as a key engine for global economic development, and it is understandable that whenever world issues are discussed at Davos, a lot of attention would be on China. “But China is a responsible major power and wants to maintain global order and peaceful development…We cannot imagine a divided world, because no country can escape the negative consequences if it happens.”
Ding added that major powers should exercise their influence to lead and show the way on the green transition and multilateralism. “Major powers should behave like major powers,” he said.
On climate action, Ding said that the low-carbon transition and accelerated efforts to mitigate for climate change will continue to be a “salient feature of the Chinese economy”. China has pledged to peak carbon dioxide emissions before 2030 and achieve carbon neutrality before 2060. It is due to submit its next round of Nationally Determined Contributions (NDCs) by February, as mandated by the Paris Agreement.
Ding noted that China’s renewable energy now accounts for over 35 per cent of its total power generation. Globally, he said China has built the world’s largest and “most complete” clean energy industrial chain – 70 per cent of solar photovoltaic components and 60 per cent of wind power equipment globally now comes from China.
These “serve as a strong boost to global green development,” Ding said. “China’s pursuit of the green transition is a long-term commitment rather than an act of expediency.”
