China's Premier Li Qiang spoke at the 2024 World Economic Forum meeting at Davos, addressing the theme of the meeting which was “Rebuilding Trust”.

Li's speech comes at a foreign policy crossroads. On one hand, 2023 ended with a relatively warm and successful meeting between the Presidents of the United States and China.

But at the same time, economic tensions continue to mount, with the U.S. continuing to engage in measures to limit exports of critical components, such as Artificial Intelligence research chips.

It also comes as Mexico was revealed to have overtaken China as the U.S.’s number one trading partner, a result of the U.S.’s policy of “Friendshoring”, as reported by Nikkei.

So while there had been an expressed desire for warmer ties between the two countries, the evidence suggested that ties were still chilly.

Rebuilding trust

Li said that as far as rebuilding trust was concerned, he agreed, saying that the current foundation of trust globally had been eroded.

He said that that lack of trust was aggravating risks to global growth and peaceful development.

Because of this, rebuilding trust was essential to overcome current difficulties and create a better future.

In order to rebuild that trust, it is essential for the world to discard prejudice, bridge differences, and work as one to tackle the trust deficit.

Li said that trust must come from a shared aspiration for a better future for humanity, and from the world's common will to work together for that vision.

He said the world had entered a new period of turbulence and transformation, and that global leaders should “all the more” cherish communication, solidarity, and cooperation.

Proposals for rebuilding trust

Li set out five proposals to rebuild, trust and enhance corporations in the global economic field.

Macroeconomic policy coordination

First, he proposed strengthening macroeconomic policy coordination in order to build greater synergy for global growth.

Li said countries now had very close economic linkages, and their macroeconomic policies had notable spillover effects, especially during times of global crisis, where separate responses would only leave the world economy more fragile.

Therefore, Li said that it was crucial that when making and executing microeconomic policies, major economies should increase dialogue and communication, when coordinating and executing measures.

Global supply chains

Secondly, he proposed strengthening international industrial specialisation and collaboration, in order to keep global and industrial supply chains stable and smooth .

Li said that between 2020 and 2023, there had been on average 5,400 discriminatory trade and investment measures worldwide, double what it had been in the pre-pandemic era, before 2019.

He compared the industrial and supply chains of the global economy to that of the circulatory system of the human body.

Any obstacles or disruptions could slow down or block the flow of life blood to the world economy.

This would compromise development efficiency, but it also triggered economic risk and problems.

What truly served the common interest was for all to respect the laws of international industrial specialisation, firmly advance trade and investment liberalisation, and facilitate the tightening of bonds of cooperation.

This would increase mutual benefit and steadily enhance the stability of global industrial and supply chains.

"Coopertition"

Thirdly, Li suggested strengthening international exchanges and cooperation on science and technology.

He characterised the new round of technological revolution and industrial transformation as “coopertition”, a portmanteau of cooperation and competition.

Li said in the only way to keep competition healthy was to enhance cooperation and innovation in science and technology, instead of using it to become a means to restrict or contain development of other countries.

Li might have been referring to the U.S.'s efforts to restrict China from importing certain types of goods relevant to its ongoing economic development efforts, such as its ban on the export of AI research chips to China.

Green cooperation

Li’s fourth suggestion was to strengthen international cooperation on green development, and to actively tackle climate change worldwide.

Humanity, he said, still faces many challenges in addressing climate change and promoting the green and low carbon transition.

Li that some countries often talked about the need for stronger cooperation in climate governance.

But these counties also erected barriers to “green trade”, preventing high quality and efficient green and low carbon technologies and products from flowing freely .

It should be noted that while some outlets such as China Daily have reported that the U.S. is possibly targeting Chinese made solar panels for import controls; China has likewise threatened bans on foreign solar panel components, notably from Europe.

North South, South South

Li's fifth suggestion is to increase cooperation between the Global North and the Global South, as well as encouraging cooperation between countries of the Global South.

Li was referring to the relatively more economically developed world, typically identified as the “North”, with developing countries generally referred to as the “South”.

Li lamented that in recent years there had been a notable divergence in the recovery (in the post-pandemic period) and technological divide between the Global North and Global South .

Many developing countries are in distress, Li said, with one-third of low income countries’ average incomes stuck below 2019 levels.

China and its people, Li said, believed in mutual benefit. “True development is development for all.”

Li called for the full implementation of the United Nations 2030 agenda for sustainable development, for the strengthening of global development cooperation, and the bridging of development gaps.

A better version of oneself

Li said that Chinese culture valued credibility, and attached great importance to its commitments, honouring its words, and with concrete actions.

China, he claimed, had proven consistently to the world that it was a country worthy of trust.

But he also acknowledged that there were objective reasons and subjective factors that aggravated the current global trust deficit, between bilateral and multilateral relations.

Without naming any particular country, he said that there were many examples where one side's capriciousness undermined mutual trust, a term China has previously used to describe U.S. policy.

“In our view,” Li said, “the best way to earn trust is to be a better version of oneself.”

“Only then could all sides treat each other with sincerity and work in the same direction.”

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Top image via World Economic Forum/YouTube