Opening Plenary with Xi Jinping at Davos 2017

President Xi strode onto the world stage to deliver the opening plenary of the annual gathering of global business and government leaders in Davos, Switzerland. By showing up, he laid claim to China’s seat at the international table on par with that of the United States. His comment championed trade and its benefits vis a vis trade’s shrinking support in the West, led by protectionist and populist pronouncements of President-elect Donald Trump.

 “Pursuing protectionism is like locking oneself in a dark room. While wind and rain may be kept outside, so are light and air…No one will emerge as a winner in a trade war,” Xi told the Forum audience of some of the world’s most powerful people in business and government.

While Xi was speaking to at least two additional constituencies, it’s likely one was paying close attention but not the other. In Beijing, Xi has spent the last several months consolidating his power, including a recent designation as the country’s “core” leader, ahead of this fall’s annual meeting of the 19^th National Congress of the China Communist Party and its selection of its leaders, including the re-naming of Xi as General Secretary.

But in Washington, the focus was not Davos where Trump’s representatives are few in number, but on the aftermath of a tweeting feud between the president-elect and Civil Rights icon John Lewis; the fallout from Trump throwing down the gauntlet to the US intelligence community; and implications of probable Russian interference in America’s 2016 presidential election.

The market did take note, however, ending the day on a middling note as investors seemed to want a time out to digest developments around global developments and just as importantly, president-elect’s economic plans and the possibility of a hard Brexit as early as March. Trump’s convictions about trade, social and tax reforms, infrastructure spending and deregulation are crystal clear. Questions gaining credence, however, are focusing on issues such as timing and outright achievability of Trump’s policies without long-term severely negative consequences.

At some point, economic fundamentals could turn into a market bear-hold.

The Chinese president’s comments were just a part of the day’s news but symbolically significant. They also signaled importantly that the leaders of the world’s two largest economic powers are not seeing eye-to-eye on the trade and economic relationship going forward as well as on the historic fundamentals that have underpinned that relationship since 1979.

It would be wise for Donald Trump to initiate a summit with Xi as his first priority of international business after taking office on Friday. And it should be a summit where Trump listens and learns.