China’s premier criticises west’s de-risking drive at ‘Summer Davos’

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China’s premier Li Qiang has criticised a western push to limit trade and business ties with the country and promoted international economic co-operation in a speech that described de-risking as a “false proposition”.

“Governments should not over-reach themselves, still less stretch the concept of risk or turn it into an ideological tool,” Li said in the keynote address on Tuesday at a World Economic Forum event in which he criticised “the politicisation of economic issues”.

Li warned that “some in the west” were “hyping up . . . reducing dependencies and de-risking” and said such efforts were “false propositions”, arguing that businesses were in the best position to assess risk.

His speech, delivered in front of an international audience that has become a rarity in China since the start of the pandemic, provided an unusually clear response from Beijing’s highest levels to an array of western policies intended to limit corporate and economic exposure to China as geopolitical ties fray.

Relations between the US and China, which were already at their worst level in decades, deteriorated sharply this year after Washington shot down a suspected Chinese spy balloon in February. Russia’s invasion of Ukraine has also increased international attention to the possibility of a conflict over Taiwan.

The US and China have recently made attempts to stabilise their relationship with a series of meetings between senior officials, including a visit to Beijing this month by secretary of state Antony Blinken. But that effort was quickly undercut by US president Joe Biden referring to China’s leader Xi Jinping as a “dictator”.

The World Economic Forum’s Annual Meeting of the New Champions, known as the “Summer Davos”, is taking place in the northern Chinese port city of Tianjin this week for the first time in four years.

It is being attended by New Zealand prime minister Chris Hipkins and World Trade Organization director-general Ngozi Okonjo-Iweala but by few top American business leaders. Other international conferences held in China since the country’s reopening have been characterised by a similarly cautious tone amid the political tensions.

Chinese policymakers and provincial governments have been encouraging foreign investment this year as they face a challenging economic backdrop following three years of pandemic isolation under the country’s zero-Covid regime. A number of high-profile foreign business leaders, including Apple’s Tim Cook, Tesla chief Elon Musk and JPMorgan Chase chief executive Jamie Dimon have made recent trips to China.

Li, who visited France and Germany last week, focused heavily on the need for co-operation and communication, noting China’s “deep integration” in the world economy and saying that the country had developed by “embracing globalisation”.

China’s economic data has disappointed this year, thanks to slowing trade and a weak property sector, while domestic consumption has failed to pick up steam after Covid-19 restrictions were abruptly abandoned late last year.

Policymakers this month cut benchmark interest rates in an attempt to stimulate growth, but economists anticipate a range of further support measures over coming months.

Li said on Tuesday that the economy was on course to meet its official growth target this year, which at 5 per cent is the lowest in decades.

Before his promotion to China’s second-most powerful position in November, Li was the Chinese Communist party’s top official in Shanghai and oversaw one of the country’s most drastic lockdowns last year.