Tuesday, September 30, 2008

World Economic Forum: China Looms Large

World Economic Forum: China Looms Large

There couldn't have been a more interesting time to hold the World Economic Forum Summer Davos 2008, which ran Sept. 26-28 in the eastern coastal port city of Tianjin, China. Just like at Davos, the organization's main event held every winter in the eponymous Swiss ski resort, the forum brought together a mix of business leaders, pundits, and policymakers, including Citigroup (C) Vice-Chairman William Rhodes, Ernst & Young CEO James Turley, and Lenovo Chairman Yang Yuanqing. Also attending were China Mobile (CHL) chief Wang Jianzhou, TCL CEO Li Dongsheng, Alibaba founder Jack Ma, and European Union Trade Commissioner Peter Mandelson.

And, as at Davos, there were the innumerable panel discussions, closed-door sessions, and networking as delegates, speakers, and journalists met throughout the sprawling convention center and at a scattering of hotel bars. But what made the second annual Summer Davos in China different, of course (last year's was held in the northeastern coastal city of Dalian), was the backdrop: first, a grimy, largely industrial port city—a far cry from the snow-clad Alps of Davos; much more importantly, the unprecedented turmoil in the world's financial system that dominated discussion for the 2,000 attendees. "Confidence is more important than the gold and currency at the moment," said Chinese Premier Wen Jiabao during the keynote address on Sept. 27.

So rather than just high-level pontificating (the WEF motto is "committed to improving the state of the world"), the three days in Tianjin were more serious business—in short, what comes next for a world economy facing tremendous challenges and uncertainty. Indeed, the Tianjin forum was much more about raising questions than answering them, many revolving around China. In particular, to what degree will the mainland, the world's most important rising economy, continue to drive global growth? And what leadership role might China play going forward?

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First, the economic question: As the world economy reels, will China be able to move more decisively toward its long-term goal of building a more domestically focused, consumption-driven economy? And will China help cushion the impact of the likely dramatic slowdown in the more developed economies? Over the last 30 years, China's gross domestic product has grown from just 1% of the world's total, to more than 5% last year, Premier Wen pointed out in his keynote address. China's share of global trade has grown from less than 1% in 1978, the year the nation first opened its economy to the world, to about 8%.

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