Wednesday, June 29, 2016

‘Brexit’ Brouhaha Briskly Broached by World Economic Forum

Jun 26, 2016 9:12 pm HKT

Travis Kalanick, chief executive officer of Uber, speaks during a session at the World Economic Forum Annual Meeting of the New Champions in Tianjin, China, on Sunday, June 26, 2016. PHOTO: BLOOMBERG

TIANJIN, China—What’s a premier exponent of globalization to do after Britain’s vote to exit the European Union? In the case of the World Economic Forum, arrange a panel discussion.

Responses to the British referendum at the start of a three-day forum event in China on Sunday ranged from lingering shock to analytical detachment and a degree of indifference, given the heft of the Chinese economy and its limited trade with Britain. Klaus Schwab, the German economist who is the forum’s founder, didn’t respond to a reporter’s question about the British vote.

With the topic top of mind for many, a special panel titled “After the Brexit” was added Sunday morning to a program that had been weeks in the planning. Adrian Monck, a member of the forum’s executive committee, set the tone, saying that as a British passport holder and possible ex-EU passport holder, he was “still coming to terms with the emotional impact of ‘Brexit’.” His 12-year-old son, he said, had “burst into tears.” He then called for rational analysis.

Political-risk consultancy Eurasia Group’s President Ian Bremmer, whom Mr. Monck called the “pundit’s pundit,” said that as with economies, “geopolitics has boom and bust cycles too.” He said the British rejection of the EU further dented the U.S.-led world order put in place after World War II. He put it on par with the 2008 financial crisis and the U.S. response to the September 11 terrorist attacks.

Larry Stone, public affairs chief for BT Group PLC, said uncertainty and instability lie ahead for business, especially companies such as his, which, he said, draws more than 10% of its global revenue from Europe. Michael Falcon, an Asia-Pacific chief executive for J.P. Morgan Chase & Co., said the vote is causing a shock, but not a crisis, with volatility expected.

All agreed that much hangs on what happens next: how the British government negotiates its departurefrom the EU and under what terms.

So did the vote represent a slap in the face to the global elite, Mr. Monck asked? Mr. Bremmer saw in the vote a reasonable response to the hollowing out of the middle class in industrialized countries, and to the inadequate response by political, corporate and other leaders.

“It’s not the absence of fact. I don’t think it’s the uneducated. This is rational behavior in the same way that someone in Gaza who has no ability to act out and has only a rock is going to throw it,” Mr. Bremmer said.

Elsewhere in the forum, the ‘Brexit’ issue emerged at times though didn’t consume the discussion. Matthew Prince, founder of the U.S. tech company Cloudflare Inc., said London’s role as a magnet for talent is likely to suffer since people from other parts of Europe may feel less welcome.

Travis Kalanick, the co-founder and chief executive officer of Uber Technologies Inc., didn’t expect much impact on the ride-hailing company. “We’re all about serving cities,” he said. “As long as there are still roads in London, as long as there are still people in London, there are some fundamental things that will continue to do well.”

Given the forum’s location—in a fast-changing Chinese port city—a ‘Brexit’ impact on China and the region was weighed. Li Daokui, an economist at Tsinghua University, thought the influence on China would be minimal, while Huang Yiping of Peking University saw it differently, saying the vote represents a backlash against globalization, a phenomenon that has benefited the Chinese economy.

Even so, some noted that East Asia seemed a region of relative well-governed calm compared with many parts of the world, Europe included. “All the political risk geopolitically is at home,” said Mr. Stone, the British telecomms executive, back at the Brexit panel.

– Charles Hutzler and Eva Dou.


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