Good morning from Paris, where I am moderating a luncheon program today for the city of Guangzhou, host of the 2017 Fortune Global Forum, which will take place in December in that important southern China business center.
The significance of the events today in Washington, D.C. will be lost on nobody here in the French capital, in China, or in Davos, Switzerland, where the World Economic Forum is wrapping up. The new president of the United States cast a pall over the elites in Davos this week, particularly Europeans put off by his nativist tone and the prospects for protectionism he brings.
This was my first time in Davos since 2012, and the decline in American importance at the meeting was palpable. In the past, the conference arguably was too American, overly focused on the dominant political and commercial voices that fuel and fund its host’s activities.
This time, the conversation often turned to how the world will cope if the U.S. refuses to lead on issues from international trade to human rights to environmental policy. On Thursday, for example, I attended a panel on the future of Asian commerce. Ostensibly about Asia, the conversation quickly focused on the premise that China might take the place of the U.S. as trade-policy leader, a notion that felt equally uncertain and inevitable. “We need to prepare for a new world, where America is an obstacle to international trade,” said Kishore Mahbubani, a professor of public policy at the National University of Singapore.
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This shift was in motion well before the election of Donald Trump. “It doesn’t make sense for a player from far away to come to a region and impose a set of rules,” argued Tsinghua University economist Li Daokui, referring to the now extinguished Trans-Pacific Partnership agreement and the prospect of a China-led pact, the Regional Comprehensive Economic Partnership, taking its place. The U.S. remains critical, of course, making the prospect of a trade war with China all the more worrisome. “Protectionism is a direct threat to the Asian economy,” said Nouriel Roubini, the New York University economist. “It’s the market of first and last resort for Asia’s exports.”
Uncertainty over the change in power in Washington was omnipresent in Davos. “I’m quite worried about the Constitution,” Chris Eisgruber, president of Princeton University and a constitutional law scholar, told me. He noted that the Founding Fathers explicitly feared demagoguery. Three facets of today’s U.S. civic discourse would worry the Framers, said Eisgruber: “mistrust of institutions,” which they considered crucial to forming a republic; the “geographic sorting” that finds people of like-minded views grouping together rather than being more evenly distributed throughout the country; and the rise of technologies (read: Facebook) that are keeping people from reading facts and views that give them proper “civic understanding.”
For all this, my time in Davos ended on a high note. Thursday night Fortune and Time hosted a dinner for global CEOs where the discussion turned to how business makes a positive impact on the world. In a continuation of a conversation we began last month at the Vatican, the assembled corporate chieftains shared specific examples of best practices, highlighting the good their companies do as part of their everyday business activities. Their examples were inspiring; expect to see coverage of this important—and hopeful—topic in months to come.
