China’s leading economist Li Daokui, a frequent guest who attended the World Economic Forum (WEF) over the past decade, interpreted Chinese President Xi Jinping’s speech in the Forum, and analyzed the challenges China’s economy is facing, as well as its influence exerted in Davos.

President Xi urged the world to reject protectionism and instead work together to guide and adapt to economic globalization in a keynote speech at the opening session of the WEF on Tuesday.

“I think the single biggest message President Xi just delivered to the audience here is that China will be the key supporter of globalization, despite other claims in the US and other countries…” remarked Li.

Li pointed out China is not only a beneficiary, but a strong contributor to globalization as well, and China is very open and welcomes everybody to share the prosperity of economic growth.

He said many policies are expected to follow Xi’s general message in the speech, which will substantiate its overall tone.

Li continued to disagree with the international economic community that may have unrealistic and high expectations of the US economy, due to the promises made by US President-elect Donald Trump in the first half of 2017.

He admitted China is indeed facing challenges of self-fulfilling expectations. One is from many investors who are expecting the appreciation of the US dollar and the devaluation of the RMB, and are trying to dump the RMB in the foreign exchange market, which leads to the reality of RMB depreciation. Li said the self-fulfilling expectation would intertwine with the capital flight from China. 

He added the second challenge for the Chinese economy is the protectionist trend going against China, starting in the US and other countries. These countries will continue fighting against China’s exports, which has indeed been declining for the past two years.

However, Li said Trump cannot deliver on his promises during the first half of this year, because it takes time to carry out tax cuts, conduct infrastructure investment, and erect trade protectionist policies, and argued China will have to fight against the expectations.

With his decade long experience in Davos, Li revealed the influence of China’s economy in the WEF has been increasing over the past decade. 

However, he said the increase of its influence has not been a smooth one. In some years, the Chinese participants were not very active, carrying the worries of the participants about uncertainties or risks from China’s economy, according to Li.

In other years, Li said people look at China for optimism, ideas, and solutions, and so there are both big and small years in terms of China’s influence in the WEF. This year is definitely a super year, because Chinese President Xi Jinping went to Davos and delivered [the opening] speech, according to Li.

(Video and photo taken by Dang Zheng; video edited by Duan Rong)