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International relations

Xi slams new Cold War, but White House says competition inevitable

Biden to form 'new approach' on China after consulting allies and Congress

Chinese President Xi Jinping addresses the Davos Agenda meetings on Jan. 25 in a screenshot from the World Economic Forum video feed.

SHANGHAI -- Nations must reject Cold War thinking and embrace "strategic communication" to build trust, Chinese President Xi Jinping said in an address to the World Economic Forum on Monday, making his case to a global audience days after new U.S. President Joe Biden's inauguration.

"The problems facing the world are interconnected and complex," Xi said via video link to the Davos Agenda meetings -- an online prelude to the forum's mid-pandemic, in-person summit in Singapore in May. "The way out of them is through upholding multilateralism and building a community with a shared future for mankind."

His words were later countered by the White House, with press secretary Jen Psaki saying that the U.S. and China are in a "strategic competition" and that China is "engaged in conduct that it hurts American workers, blunts our technological edge, and threatens our alliances and our influence in international organizations." 

This was Xi's second time speaking to the WEF. The first, in January 2017, was three days before Donald Trump began his presidency, when Xi presented himself as a defender of free trade and globalization in contrast to Trump's "America First" isolationism.

Xi listed what he sees as four major tasks for the world: to step up macroeconomic policy coordination; to abandon "ideological prejudice" and pursue win-win cooperation; to close the gap between developed and developing countries; and to come together to tackle global challenges, including COVID-19.

White House Press Secretary Jen Psaki speaks to reporters at the White House in Washington on Jan. 25.   © Reuters

This time, in a message apparently directed at the U.S. and its partners but without naming names, Xi denounced the polices of the Trump era. "To build small circles or start a new Cold War, to reject, threaten or intimidate others, to willfully impose decoupling, supply disruption or sanctions, and to create isolation or estrangement will only push the world into division and even confrontation," he said in his roughly 20-minute address.

Xi vowed that China would continue on the path of reforming and opening up its economy based on market principles and international standards. "We hope these efforts will bring more cooperation opportunities to other countries, and give further impetus to global economic recovery and growth," he said.

He also called for taking "down barriers to trade, investment and technological exchanges."

At the White House, Psaki was asked whether Xi's call for unity and cooperation on issues such as the coronavirus was likely to change America's stance toward the Asian rival.

"No. I think our approach to China remains what it has been since -- for the last months, if not longer," she said. "We're in a serious competition with China. Strategic competition with China is a defining feature of the 21st century."

Noting that China is growing more authoritarian at home and more assertive abroad, and with Beijing "now challenging our security, prosperity, and values in significant ways," Psaki said what is now required is "a new U.S. approach." 

"We want to approach this with some strategic patience," she added, saying that the Biden administration seeks to engage more with Republicans and Democrats in Congress and allies to discuss the path forward with regards to China policy.

As it happens, figures released by the United Nations Conference on Trade and Development on Sunday showed foreign direct investment into China grew 4% to $163 billion in 2020, making the country the largest recipient. The increase came despite an overall drop in global FDI, which fell by 42% to $859 billion amid COVID-19 lockdowns and other uncertainties. The FDI flow to the U.S. plunged 49% to $134 billion.

Likewise, both the Regional Comprehensive Economic Partnership, signed with 15 countries in November, and the conclusion of the Comprehensive Agreement on Investments with the European Union in December underscore China's growing influence in regional trade. "China will continue to promote trade and investment liberalization and facilitation," Xi pledged.

HSBC in a December survey found 18% of businesses in the Asia-Pacific region intend to prioritize trade with China in 2021, versus 16% focusing on the U.S.

China's ostensible success in containing COVID-19 has not hurt its global appeal. The first country to suffer a major outbreak was also one of the first to rein in the virus, and assuming that success holds, the Chinese economy is expected to grow about 8% in 2021.

Once again countering criticism that Beijing's initial handling of the virus contributed to the pandemic, Xi emphasized how China has assisted 150 countries and stressed its commitment to "closer solidarity and cooperation, more information sharing, and a stronger global response."

Without going into specifics, Xi also appeared to push back against international pressure over its policies toward Hong Kong, Xinjiang and Taiwan. "Differences in history, culture and social system should not be an excuse for antagonism or confrontation, but rather an incentive for cooperation," he said. "We should respect and accommodate differences, avoid meddling in other countries' internal affairs, and resolve disagreements through consultation and dialogue."

The WEF's online meetings -- held in lieu of the usual gathering in snowy Davos, Switzerland, due to still-surging infections across the globe -- began Sunday and started a full slate of sessions on Monday under the theme of "rebuilding trust." Klaus Schwab, the WEF founder and executive chairman, called on the world to seize the chance together to end the COVID-19 crisis and rebuild economies.

"We have to create a new multilateral system, which is fair ... [and] takes into account the necessities of the 21st century," Schwab said.

Besides Xi, other leaders such as Germany's Angela Merkel, Japan's Yoshihide Suga and India's Narendra Modi are due to speak to the forum, which runs until Friday. Biden is not expected to participate.

If all goes according to plan, global luminaries will then reconvene in person a few months from now in Singapore. The plan to hold a physical summit in an ongoing pandemic has drawn criticism, though the WEF has insisted it will be safe and successful.

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