As tensions between the US and China intensify over the escalating trade war, the world has their eyes on the Chinese city of Tianjin. This is the home of the 2019 Summer Davos, an economic forum that has been nicknamed ‘China’s Davos’. Business leaders, politicians, academics and industry experts are gathering in a bid to find solutions to the trade dispute that is engulfing not just these two countries, but the global economy. With the world watching, what is the consensus of Tianjin’s Summer Davos?
1. The Uncertain Future of Trade: The Lowdown from China’s ‘Davos’
China has become increasingly important in the international trade landscape, with their position especially strengthening on the global stage with their hosting of the World Economic Forum (known as ‘Davos’) in 2019. During the 2019 Davos, China suggested a global path of governance to accept, emphasizing the importance of free trade and an open economy in order to maintain the global economic system, avoid an economic downturn, and reach an inclusive and sustainable future.
Despite China’s optimistic outlook on the future of trade, many of China’s trading partners are concerned with the practices of the country. Countries have expressed doubts in China’s commitment to free trade, pointing to protectionism, a chronically undervalued currency, and the country’s inability to effectively enforce their intellectual property laws. These doubts and disagreements could lead to the continued breakdown of trust between parties, and could spell uncertainty for the future of global trade.
2. War of Words: Chinese Divides at the Country’s Alternative to Davos
While the World Economic Forum takes place each year in Davos, Switzerland, an alternate version of the event takes place in China. The Boao Forum for Asia is a nonprofit organization known for bringing together business leaders and discussing trends in economy, society and technology. As the forum comes with a host of political, economic and social implications, dialogue between participants often takes on the form of a war of words, making for an interesting and sometimes heated series of exchanges.
China’s annual Boao Forum often focuses on major questions stemming from the current global economic status quo. This year’s discussions included topics such as:
- Chinese fiscal policies: how they are impacting international economic growth and development
- International trade disputes: their effects on the international market
- Income inequality: how to address the gap between rich and poor
Discussing matters of this magnitude, however, often leads to dissension in the ranks. Participants are divided in their views of the implications of China’s rise as a global economic super power and the impact of their policies on the international market. Some participants have issued stern warnings about the looming effects of the country’s fiscal policies on global economic development, while others push for a more measured approach. It’s a debate that isn’t likely to end anytime soon, and will keep the Boao Forum for Asia an exciting and transformative event for years to come.
3. International Voices Speak Out on the Trade War’s Impact on the Chinese Market
As the US-China Trade War intensifies, businesses and investors across the globe are starting to feel its effect. The Chinese market has been hit hard, with stock prices dropping and trade tariffs reducing investments.
- International Monetary Fund (IMF): According to the IMF, the trade war is having a “significant” impact on both countries’ economies, which could cause worldwide ramifications.
- American Chamber of Commerce in China (AmCham): AmCham found that 63% of about 430 American companies in China reported losses due to the tariff war, and that 63% of companies had stopped purchasing Chinese goods.
- Europe-China Chamber of Commerce (EUCCC): The EUCCC found that the Chinese economy is predicted to slow down in the next few years, with an estimated 3-5% overall trade loss in 2021.
- United Nations Conference on Trade and Development (UNCTAD): UNCTAD has projected that the Chinese economy could slow by 0.1-0.2% due to the trade war and global economic uncertainties.
From trade agreements to market projections, international voices are speaking out on the impact of the trade war on the Chinese market. Local businesses, global investors, and everyday citizens alike are feeling the burden of the conflict, waiting to see how the situation resolves itself.
4. Business Leaders Weigh In: Is Conflict Only Leading to Greater Inequalities?
Responses vary greatly. From those in larger organizations to small business owners, a range of opinions exist.
- Some leaders rely on extra efforts and creativity to navigate the systemic inequalities, such as providing additional resources for minority groups or mentorship for upward mobility.
- Others assert that the focus should be on long-term impact of conflict. They argue that tackling larger, structural changes is the key to reducing inequality.
- Some see no middle ground and propose completely pairing the idea of conflict and inequality.
Still, most business leaders agree that communication and collaboration are the fundamentals of mitigating — and even eliminating — the impact of conflicts on inequality. Through constructive dialogue, leaders can better understand and serve their employees, customers, and communities. With that understanding, they can create positive outcomes and new opportunities, while also preventing future conflict. The trade war between the US and China continues to be a source of contention between the two countries, and it’s clear that the issue and its implications are still up in the air. As the discussions in Boao continue, it’s likely that the future of the economic landscape will become clearer as the dialogue matures – and, with it, so too will the fate of the trade war.