Global Economic Uncertainty Looms as Trade War Fears Intensify
The world’s second-largest economy, China, is bracing itself for the possibility of tariffs under the newly-inaugurated administration of Donald Trump. Chinese Vice Premier Ding Xuexiang warned that “protectionism leads nowhere” and that a trade war would have “no winners.”
A Cautionary Tale from Davos
Speaking at the World Economic Forum in Davos, Switzerland, Ding referenced Chinese President Xi Jinping’s 2017 speech, which emphasized the dangers of protectionism. Xi had likened it to “locking oneself in a dark room,” where “wind and rain might be kept outside, but so are light and air.”
Tariffs on the Horizon
Following his second inauguration, Trump hinted at levying tariffs on Mexico and Canada as early as February. China is also in the crosshairs, with Trump suggesting that tariffs could be used to pressure Beijing into forcing the sale of TikTok, a social media app owned by ByteDance.
China’s Economic Challenges
Despite officially growing by 5% last year, China’s economy has struggled with lackluster consumption and a real estate slump. Ding attributed these challenges to the external environment and “temporary pains” caused by the country’s economic restructuring efforts.
A Shift Toward High-End Technology
China is attempting to move away from real estate as a pillar of growth and toward new drivers such as high-end technology. Ding emphasized that Beijing’s technological achievements are the result of “open cooperation” and that the country is developing artificial intelligence for the “intelligent transformation” of its economy.
Global Coordination on AI Governance
Ding called for global coordination on AI governance through the United Nations, warning of “unimaginable consequences” if the world were to split into different systems. He cautioned against a “relapse into confrontation,” which would leave no country unafflicted.
A Warning for the Future
As the world navigates the complexities of trade and technology, Ding’s words serve as a stark reminder of the importance of cooperation and coordination. The consequences of a trade war or reckless competition in AI governance could be devastating, and it is up to global leaders to work together to avoid such a scenario.
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