The 41st World Economic Forum (WEF) in Davos, Switzerland, kicked off Wednesday with delegates gathering to try and paint a comprehensive picture of the post-crisis world they now inhabit.
One of the main topics of debate is who the principal artists of this new fresco will be: the established schools of the US and Europe, or the innovative movements of the emerging world, coming from China, India and Brazil.
As these “new realities” are being discussed, cautious optimism has dominated the meeting so far, as many officials feel it is high time to look beyond the crisis and establish guidelines as global economic power shifts from West to East, as suggested by Klaus Schwab, founder and executive chairman of the WEF.
Looking at China’s place in this new reality, almost half of the 1,201 CEOs of international firms polled by PricewaterhouseCoopers claimed they were “very confident” about China’s growth in the 12 months to come.
China topped the poll of business leaders, with 39 percent voting it the world’s No. 1 growth engine, followed by the US with 21 percent, Brazil on 19 percent and India on 18 percent, according to the consultancy’s Annual Global CEO Survey published Wednesday before the WEF began.
Arturo Bris, professor of finance at the IMD Business School in Lausanne, told the AP that China-watchers would be analyzing comments by a host of Chinese business leaders for insights into that nation’s economy and future plans.
Bris said he would be on the lookout for certain moves by China such as the country buying Spanish and Portuguese government debt, or the lowering of pressure on the dollar.
Propelled by this eastward focus, some officials and media looked to the next step and urged that the Asian giant be no longer considered an “emerging economy.”
With China overtaking Japan as the world’s No. 2 economy last year, and growth predicted to hold steady in the upper single digits this year, “we have to get out of the lexicon the words ‘developing’
or ’emerging,'” Martin Sorrell, chief executive of advertising giant WPP Group, told the AP.
“China is no longer the developing country it once was,” Gustaaf Geeraerts, director of the Brussels Institute of Contemporary China Studies, told the Global Times.
“Although its development may still be incomplete, its sheer size makes it matter a great deal to the rest of the world – in any case much more than any other emerging power,” he added.
However, not all analysts agreed.
Qu Hongbin, an HSBC chief China economist, told the Global Times that the notion is nonsensical, as China’s per capita income – an important criteria to distinguish between developed and developing nations – stood at $4,000 last year, less than a tenth of that of the US and Japan. Qu said that the notion emerged from an impartial understanding of China’s economy.
Michael Pettis, a senior associate with the Carnegie Endowment for International Peace, expressed a similar opinion.
“China is still one of the poorest countries in the world, despite its fast growth. If that doesn’t qualify as an emerging economy, I don’t know what does,” Pettis, an expert on emerging economies, told the Global Times.
“Perhaps the point is to suggest that China is too large to be given the same status as terms that usually apply to much smaller economies. In that case, it seems pretty obvious,” he added.
However, Zhou Shijian, a senior researcher at the Institute of Sino-US Relations at Tsinghua University, told the Global Times that flattering China’s power at Davos was part of a Western conspiracy.
“South Korea is still an emerging economy with over $10,000 GDP per capita, why should China be deprived of this title? The purpose of this discussion is to push China to shoulder excessive responsibilities,” Zhou said.
“Some Western officials have a three-pronged strategy against China – hype its growth, use its wallet, and at the same time, constrain its development,” he added.
Some analysts said China, like many other emerging nations, is also facing growing inflationary pressure.
The four-day forum in the Swiss Alps brings together at least 35 national leaders, including the presidents of Russia and France, and more than 1,400 business chiefs. The number of participants from these two countries is bigger than ever, Reuters reported.
However, the 66-strong Chinese group is still dwarfed by the delegations of other countries, with the US sending 700, the UK 300 and India 100, the Wall Street Journal reported. But it still marks a big contrast from 2001, when Beijing sent just three people, it said.
The four main topics for discussion this year are Responding to the New Reality, The Economic Outlook and Defining Policies for Inclusive Growth, Supporting the G20 Agenda, and Building a Sustainable Risk Response Network, Xinhua reported.
Liu Linlin and Zhu Shanshan contributed to this story