Davos 2017: China's Commitment to Globalization

Read the transcript below.

JAMES ROOT: There were 70 governments here; 300 ministers; almost 3,000 participants. When you look at this collision of business, government, philanthropy, education, media, the arts—sparks should fly. Conversations should happen. And they do. That's what's still amazing about Davos.

As I reflect on the week, there is still a tension that I feel in the conversations. Coming into the meeting, there was a lot of hand-wringing about inequality—the uneven distribution of the spoils, if you like, of shareholder-value creation.

And when I say hand-wringing, I don't mean to be cynical. I mean there was real concern about what could be done. Because the evidence is now clear that governments and voters are objecting to some of these outcomes. There were real concerns [like], should some of the momentum behind globalization and free trade be questioned.

Lo and behold, the leader of China comes into the meeting for the first-ever time and says, No, no, no, globalization is here, globalization is inevitable; it cannot be stopped, it must not be stopped. We heard that message repeated in session after session after session.

That was a relief, in a way, for many business leaders to hear about that. Not that they expected a different answer; but to have it affirmed. It was very good to hear a much more definitive assessment of the situation in China from central bankers, business leaders and various other participants.

Essentially, [they were] saying, Look: We are, in China, as a government and as a set of leaders, aware of our shortcomings and aware of the risks. And we have an agenda to deleverage, and to destock, and to reduce capacity in many, many sectors of the economy, and we're going to do it. It's going to take time, but that's the path we're on.