Trump, China, & U.K. Dominate in Davos

In the upcoming week, a group of 2500 people, some famous, most not, will meet to discuss the future of the planet. The annual World Economic Forum brings the elite from more than 90 countries together to discuss economic and social concerns, while attempting to come up with solutions to stave off potential crises. World leaders such as Britain’s Prime Minister Theresa May and China’s President Xi Jinping will be in attendance. However, the guest list will also include thousands of business executives.

Trump, China, & U.K. Dominate in Davos


What Happens in Davos

Many ideas which are eventually championed by liberals and progressives originate from this annual meeting. Global climate change, improved food distribution in the third world, and broad programs for childhood vaccinations were brought to the world stage as a result of talks during these forums. Becoming a Davos Man or Davos Woman is a badge of honor which signals that an individual has achieved the ultimate high-powered status, and also that the person is generally assumed to have a left-leaning mindset.

The Defeat of the Davos Agenda

Until recently, this liberal thought process has born itself out in suggestions that appealed more to protesters than to the middle class, and whose ramifications barely dented the lifestyles of the extremely wealthy who receive conference passes. In January of 2016, the conference ended with all but explicit endorsements against both the Brexit referendum and Donald Trump, and attendees boarded their private jets fully believing that they would once again come out on the right side of history. However, by November, it was clear that the world had taken their advice with more than a few grains of salt, and that a new era of populism was in full force.

The History of Davos

The World Economic Forum has been meeting every year in Davos, Switzerland since 1971. Originally created as the European Management Forum by Professor Klaus Schwab, the conference encourages a collaborative process in which stakeholders come together to discuss creative problem-solving. The first topics for the meeting centered on management practices. One key driver was how Europe could learn from America’s business approach. But in 1973, the growing conflict in the Middle East and the collapse of the Bretton Woods banking system called for a change in focus to more political and social issues, and political leaders began attending the conference in 1974. The conference switched its name to the World Economic Forum in 1987.

Britain and China Share Common Davos Goals

Both Britain and China have sent their top politicians to participate in this year’s event. Both countries are looking to form new alliances to weather the storms of the current political climate. Theresa May and Xi Jinping have already scheduled a meeting in Davis to discuss future economic partnerships.

What Theresa May Hopes to Gain from Davos

Britain needs to turn to business leaders in order to find homes for their exports. After Brexit they will lose many of the tax advantages inherent in participating in the European Union. The country also wants a better image after the recent hits it has taken in the global community. Critics accuse Britain of  isolationism.  Participation in the Davos conference allows May to speak out on social issues such as the Syrian refugee crisis, cited as a key reason that British citizens decided to leave the E.U.

How Can China Benefit From Davos

China is looking for stronger ties to the rest of the world, as Donald Trump seeks to curb its reach. Donald Trump has advised that China faces heavy tariffs due to alleged unfair trade practices. The United States may dramatically reduce the level of Chinese imports. If so,  China will need to shift sales to other regions in order to sustain its incredible rate of growth. Without this, the Chinese economy could face a recession.

What Does the 2017 World Economic Conference Mean For Trading?

Participants will spend the majority of the time discussing Donald Trump and Brexit. After last year’s resounding defeat, it is unlikely that Davos attendees will be overly critical of America’s new President. This is especially true as many European countries face the possibility of electing similar politicians in the upcoming year. Look for the dollar to rise as investors realize that even liberal businessmen can ultimately work with Trump.

If Theresa May pulls off a successful meeting with Xi Jinping this will bode well for the pound. However, the executives speaking with the Prime Minister want more concrete answers on the Brexit implementation than are currently available. If May is unable to settle these fears, the GBP could fall in the short term.