Chinese Vice Premier Ding Xuexiang speaks during COP29 on Nov. 12, 2024.
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BEIJING — Chinese Vice Premier Ding Xuexiang warned there are “no winners” in a trade war, as the world’s second-largest economy faces the possibility of tariffs under the freshly-inaugurated administration of Donald Trump.
“Protectionism leads no where. [A] trade war has no winners,” Ding said Tuesday, according to an official English translation. He was speaking at the World Economic Forum in Davos, Switzerland.
The vice premier began his address largely by referencing Chinese President Xi Jinping’s speech at Davos in 2017, which took place just days before Trump headed to the White House to begin his first term.
At the time, Xi had said that “pursuing protectionism is just like locking one’s self in a dark room. Wind and rain might be kept outside but so are light and air.”
After his second inauguration on Monday, Trump said the U.S. could levy tariffs on Mexico and Canada as soon as February. As for China, the returning U.S. president indicated tariffs could be a way to pressure the country into forcing Beijing-based ByteDance to sell TikTok, whose future availability in the U.S. is now in question.
“If we wanted to make a deal with TikTok, and it was a good deal, and China wouldn’t approve it, then I think ultimately they’d approve it, because we’d put tariffs on China,” Trump said. “I’m not saying I would, but you certainly could do that.”
Trump said he and Xi discussed TikTok and trade during a call on Friday. The Chinese readout of the exchange did not mention the social media app. Neither leader attended Davos this year.
Ding, who said he was attending Davos for the second time, is one of China’s four vice premiers. China economy has struggled with lackluster consumption and a real estate slump. Despite this, the country’s GDP officially grew by 5% last year after a flurry of stimulus announcements starting in late September.
In his speech on Tuesday, Ding attributed China’s economic challenges to the external environment and to “temporary pains brought [about] by our own economic restructuring.” He referenced that the country is trying to move away from real estate as a pillar of growth and toward new drivers such as high-end technology.
China’s technological achievements are the result of “open cooperation,” Ding added in a subsequent discussion with World Economic Forum founder Klaus Schwab. The Chinese official emphasized that Beijing is developing artificial intelligence for the “intelligent transformation” of its economy, and has institutions capable of controlling the emerging technology.
Under the administration of former President Joe Biden, the U.S. had said it was in competition with China and imposed sweeping restrictions that prevent Chinese companies from buying high-end semiconductors used for training artificial intelligence systems.”
“On the global governance of AI, this is a tough issue,” Ding said. “If we allow this reckless competition among countries to continue then we will see a grey rhino, what to do about it?”
He called for global coordination on AI governance through the United Nations, similar to nuclear or biological risks.
Ding broadly warned of “unimaginable consequences” if the world were to split into different systems, including a worst-case-scenario of a “relapse into confrontation.”
“That would be a situation [in which] no country can stay unafflicted,” Ding said.
— CNBC’s Jeff Cox contributed to this report.