Davos Diary: Here Are the Top Three China Stories to Watch Out For
There’s a saying that the shakier a major country’s economy is, the bigger splash it tries to make at the World Economic Forum’s annual meeting, the yearly confab of the global elite in a skiing town in Switzerland. Over the last decade, Mexico, South Africa, and India have all pushed hard here in the years ...
There's a saying that the shakier a major country's economy is, the bigger splash it tries to make at the World Economic Forum’s annual meeting, the yearly confab of the global elite in a skiing town in Switzerland. Over the last decade, Mexico, South Africa, and India have all pushed hard here in the years when their economies were releasing worrying economic data.
There’s a saying that the shakier a major country’s economy is, the bigger splash it tries to make at the World Economic Forum’s annual meeting, the yearly confab of the global elite in a skiing town in Switzerland. Over the last decade, Mexico, South Africa, and India have all pushed hard here in the years when their economies were releasing worrying economic data.
Is this year’s China’s turn? For the first time since 2009, China is sending its premier, Li Keqiang, to Davos, where he will give a headline speech. There will also be “a very strong presence on the business side,” according to Olivier Schwab, the executive director of the World Economic Forum’s Beijing office, which includes Jack Ma, reportedly China’s richest man and founder of e-commerce giant Alibaba, and several other top Chinese CEOS.
Li will have one main mission, according to the headline of an article in China Daily, the country’s largest English-language newspaper: “boost economic confidence at Davos.” The biggest China story in Davos will likely be what Li says and how the other participants respond.
For a China growing slower than it has in decades, that’s necessary. Earlier this week, China’s National Bureau of Statistics announced that the country’s economy grew 7.4 percent in 2014 – the slowest rate since 1990, when China was languishing under international sanctions following the 1989 Tiananmen Square Massacre.
The last time a Chinese premier went to Davos the economic mood was decidedly somber — Lehman Brothers collapsed in late 2008, just four months before the conference kicked off.
Now, with the United States’ economy growing strongly and Europe moving out of crisis, Li might have a more difficult time convincing the world that China is the place to invest.
“The World Economic Forum will be a good platform for the top Chinese leaders to show the global elite China is confident in its ’new normal’ economy,” Han Meng, a senior researcher at the state research organization Chinese Academy of Social Sciences told Bloomberg. “There is nothing scary about a somewhat slowed, but more balanced economy.”
Keep an eye out for Li’s optimism, and how comfortable the global financial elite at Davos is with a slower – and yes, more balanced – economy.
Japan-Bashing From China
Relations between the two nations deteriorated in September 2012, after Tokyo nationalized part of the Senkaku Islands, an island chain claimed by China, which calls it the Diaoyu.
In last year’s Davos, Japanese Prime Minister Shinzo Abe made news by comparing China’s relationship with Japan to that of the great powers before World War I. (Tokyo later insisted that the remark was mistranslated.) While extremely undiplomatic, remarks by Chinese delegates were equally worrying. China’s Foreign Minister Wang Yi blamed Japan for tensions between the two countries, and described relations as “very bad,” while the chairman of the Industrial and Commercial Bank of China called the Japanese “the Nazis in Asia” during World War II, a decidedly unhelpful remark from the chairman of the one of the world’s largest banks.
If Beijing’s relationship with Tokyo doesn’t seem to be improving, it at least seems to have stabilized. Neither Abe nor Wang will attend Davos this year, but there is a healthy delegation of Chinese government officials, academics, and businesspeople. Their willingness to criticize Japan will be a good barometer of the state of the relationship.
On Thursday morning, telecommunications giant Huawei’s founder, Ren Zhengfei, will speak on the record for a 45-minute session. The news that a CEO is presenting in Davos sounds like a press release that journalists delete before reading — but Ren’s situation is different.
A former engineer in the People’s Liberation Army, Ren founded the company in 1987 and has since turned it one of the world’s largest telecoms equipment makers, with a sales revenue of $46 billion in 2014. In the eyes of the United States government, however, those links are problematic: The White House worries that Huawei maintains deep ties with China’s army — and fears that Beijing could use Huawei to spy on the United States. That’s led Washington to stymie Huawei’s attempts to do business in the United States.
Ren is notoriously press shy. His first known interview with foreign media in May 2013, with — randomly — four journalists from New Zealand, made international news solely because it happened.
What makes his Davos appearance more exciting is that when Ren does speak, he usually speaks his mind.
In December 2013, a colleague and I reported on an interview Ren gave with French press, where he claimed Huawei was “exiting the U.S. market,” – a claim a Huawei spokesperson later denied.
Also in the interview, Ren gave a lengthy discourse on why he decided to go into the telecom business instead of raising pigs; the correct way to say the company’s name, which is said “Hwa-way,” instead of “Hawaii,” as most Westerners do; and that he only owns 1.4 percent of the company “because one day I will get Alzheimer’s.’”
Ren is talking about “his vision of technology, industry development and global business,” according to the program, but hopefully he’ll digress as well.
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