China’s ‘Summer Davos’ offers rare respite from trade war

As he took the stage to open the World Economic Forum in Tianjin this week, China’s second-in-command Li Qiang drew a direct comparison to the first such event in the city during the global financial crisis of 2008.

“People felt disoriented and anxious, not knowing whether the world economy could emerge from the difficult situation and where it was heading,” the Chinese premier said.

“History often rhymes,” he added.

This year’s “Summer Davos” — China’s answer to the annual winter meeting of business leaders and heads of state in Switzerland — unfolded against a backdrop of similar uncertainties, with a conflict in the Middle East and a full-blown trade war between the US and China.

Washington and Beijing struck a fragile truce in London this month to reduce their tariffs, but the end of a 90-day pause on US levies against dozens of other countries still looms on July 9.

The mood at the vast conference centre on the outskirts of Tianjin was upbeat, however, especially compared with recent years that were marked by the slow thaw of Covid measures and a weaker economic backdrop.

The World Economic Forum in China, which alternates between Tianjin and the city of Dalian, was paused for years during the pandemic. Its relaunch in 2023 was marked by a notable drop in US attendees — a trend that persisted this year, with 950 Chinese participants far outnumbering 180 from Europe and 110 from North America.

“The big shift is before and after Covid,” said Darko Matovski, co-founder of London artificial intelligence company casuaLens, who has attended the event since 2019. “It was more west and east, more equal, now I think it’s more east”.

“It’s not good or bad,” he added. “It’s just different.”

Even so, delegates pointed to opportunities for growth at a time when the US has shaken up the global trading order and Beijing has sought to position itself as a stabilising force.

“There is more substance this year compared to last,” said Chris Torrens, managing director for greater China at consultancy APCO. “More multinational companies are serious about ramping things up with China.”

As well as his opening address, Li held a closed-door meeting with executives from multinational companies, where representatives from groups including Cisco, LG Chem, Unitel, Syensqo and Louis Dreyfus were invited to comment on the operating environment for foreign companies in China. Li was “very receptive and open to their feedback”, which included concerns about the risk of sudden regulatory changes, according to one participant.

Hussain Dawood, group chair of Pakistani conglomerate Engro Corp, said Li touted “openness and fairness” at the summit. He noted that the Chinese premier bowed twice to the audience.

China has sought to expand its relations with developing economies, unveiling tariff-free trade with 53 African countries this month, and Li cited the rise of the global south in his opening address.

“This is the kind of forum with the biggest gathering of people who believe in globalisation,” said Gao Yuning, an academic at Tsinghua University in Beijing.

“It is still very important to have the chance to participate in face-to-face [meetings],” he said, adding that the “optimistic strategy for China is to keep a reciprocal tariff against the US, but actively lower its tariff against all other economies”.

The field of delegates this year included Carlson Tong, head of HKEX, and Liu Qiangdong, also known as Richard Liu, founder of ecommerce giant JD.com, as well as the prime ministers of Singapore, Vietnam and Senegal and the president of Ecuador.

On the main stage, former British prime minister Sir Tony Blair outlined an emerging world order, which he said by mid-century would be directed by three superpowers: the US, China and India.

“There are people who do not want China to be powerful, and then there are people who are perfectly willing to accept that China should be powerful but wonder to what purpose this power will be put,” he said, putting himself in the latter category.

“What I say to people is, we should be strong enough to deal with whatever happens in China, but we should be engaged with China,” he added.

That sentiment was echoed by Arnold Puech d’Alissac, president of the World Farmers’ Organisation in Rome, who told the Financial Times he had a “very good meeting” with a former Chinese WTO representative.

“They [China] buy some of our products, [so] we need [a] connection with them,” he said, pointing to French exports of flax, sugar, beef and cereal. 

Other attendees included Harvard professor Graham Allison, who popularised the Thucydides trap, or the idea that a rising power challenging a dominant one could result in war. The framework has gained wide currency among Chinese policymakers and commentators.

“What would Thucydides say now? He would say, ‘right on script’,” Allison said on a panel on geopolitics.

He added, however, that in his view Donald Trump was not a “China hawk”, and was willing to speak positively about the country. “The opportunity for Trump and Xi [Jinping] to surprise us on the upside is, I think, enough to be hopeful,” Allison said.

Blair, who first visited China in 1988, reflected a wider sense of pragmatism. “China is most countries’ biggest trading partner other than their nearest neighbour,” he told the audience.

“You’ve got to see China through China’s eyes and not through the west’s eyes.”