The World Economic Forum published its 2019 Global Risks Report in London on Wednesday as the global economy is under the shadow of geo-economic and geopolitical tensions. Alan Beebe, president of AmCham China, however, does not believe that the world economy is slowly slipping into another crisis.
On some big challenges, whether geopolitical, environmental or economic challenges, Beebe says that “from our perspective, we are not sleepwalking, and our members are not sleepwalking into another crisis. They are very aware of the challenges both the two nations face. We are certainly hopeful that we can continue to focus on these challenges.”
Regarding trade issues, companies are doing a range of things to cope with the uncertainties currently going on between China and the U.S. “They are preparing for protracted discussions. At the same time, they are very hopeful. But hope is not a strategy. We recommend that companies hope for the best but prepare for something that could be drawn out. Enterprises need predictability and an environment where they can make rational decisions,” Beebe explained.
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Many market watchers believe a further erosion of multilateral trading rules and agreements could be played out in 2019.
“It's certainly possible,” Beebe said, “from what we have seen from the past years or so, there are growing concerns and consensus that changes need to happen within the WTO.”
When the WTO was founded, it was built on principles, including comparative advantages and developing towards a market-oriented economy. “The WTO then could not predict where we would be today in terms of how technology has evolved and many of the non-tariff barriers now have come to the forefront not just between the U.S. and China, but also between many other countries,” Beebe said.
According to a recent survey conducted by AmCham China, companies from both China and the U.S. are acting very rationally. They are re-accessing their global supply chains, delaying investment decisions, thinking more thoughtfully on how to manage through this period of unpredictability.
