Davos was early in proclaiming that the 21st century would be the Asian Century. China’s miraculous development story is central to this vision—a transformation that would inevitably push the pendulum of global power from West to East. This tectonic shift was very much on the minds of most who attended my final Davos session of the year “China, India and Japan: Asia’s Big 3.”
Not so fast, I argued—even though I have made my own career bet on just such a possibility. Yet the Asian century is hardly as preordained as the Davos consensus seems to believe. The main reason, in my view, is that the region continues to rely far too much on exports and external demand. Developing Asia’s export share hit a record high of 47 per cent last year—up 10 full percentage points from levels prevailing in the late 1990s. That hardly speaks of a true economic power that has become increasingly capable of standing on its own.
The question of the US reaction to China’s exchange rate policy continues to rumble in Davos, though the absence of the US policymakers makes the debate somewhat one-sided.
The response by Chen Siwei (former Vice Chairman of the People’s Congress and now Chairman of the Global Council for the Future of China), to the remarks of US Treasury Secretary, Tim Geithner, about China’s manipulation of the RMB exchange rate, can be translated as follows:
‘I don’t quite understand why he had said these unwise words, may be just to get the approval from the Senate. What I know is that he is a smart guy. I just hope he will just talk the talk and walk the walk when he is officially in office”.
I note that Bill Clinton, whom I warned last year was in danger of tarnishing his Davos brand by being nasty about Barack Obama on the US campaign trial, seems to have bounced back.
The absence of any senior figures from the US administration at the World Economic Forum this year has left Mr Clinton to re-occupy his place as the well-loved philanthropist and former president who represents the acceptable – even loveable – face of the US in Europe.
The remark by Tim Geithner, president Obama’s new treasury secretary, that president Obama believes China is manipulating its exchange rate has, it can safely be said, not gone down well in Beijing.
On the contrary, it is condemned as presumptuous blame-shifting by the originator of the catastrophe. This is clear from several discussions I have heard in Davos. But I did not need to go to Switzerland to learn that.
There is little question that China is sensitive about public criticism of any kind. Nevertheless, this is not a question to be avoided. It is far too important for that.
Far too crowded. Probably 500 people over the top. Last year 2000 was heavy, 2600 is too many. Some can’t attend sessions even having tried to book online from home. Participant numbers should be reduced.
Security is also very tight, aggravated by the crush. There are heavy lines and queuing, especially early in the morning. On the other hand, this is not surprising with 40 country leaders present, many with large convoys.
Boris Johnson may well have sung for his supper, but not as beautifully as Bryn Terfel, who also told more modern jokes.
Wen Jiabao did not have them rolling in the aisles, exactly, but it was an assured performance. It’s the year of the Ox, as we know, and associated with persistence, sacrifice and plenty. The second seems to be well in hand all over the globe. We might say that governments are persistent in their attempts to stimulate their flagging economies. But “plenty” is associated with deficits more than anything else these days, which was not quite what he had in mind, I think.
It’s a grey day in Davos, in every possible sense. With their celebrated attention to detail, the Swiss have provided weather to match the mood. Once or twice, the sun threatened an appearance, but was quickly obscured. And there’s not a green shoot in sight.
Why are people here then, one might ask, if it’s gloom and doom from cappucino to gluwein? I guess the answer may simply be that they come in search of some mutual reassurance.
I am now in Davos and preparing to play my part in “shaping the post-crisis world”, which is the official title of this year’s forum. I must say this strikes me as over-optimistic. The words “shaping” and “post-crisis” seem misplaced. (I will grudgingly accept “world”.)
But what would be a better title for this year’s Davos? “Sinking in quicksand” is closer to the spirit of the times; “Buried under an avalanche of debt” acknowledges our Alpine surroundings; “Up shit creek without a paddle” has an appealing directness and shares the same length and meter as “Shaping the post-crisis world” – so that is my favourite for the moment. But I am open to suggestions.
Plane crammed with bankers, airline executives (appropriate), telecommunications CEOs from US, China, Bahrain and Britain. Found myself being pitched for business by a telecommunications company – boot on the other foot for a change. Need to pick up some tips.
On the face of it, there seem to be more policywonks this year than CEOs. With 40 government heads here this year, maybe this is in effect a warm-up for the G20 in London in April. In addition to the British prime minister, the chancellor of the exchequer, the foreign secretary and the business minister are all scheduled to be here. The prime minister’s business session on Friday sadly collides with the annual British lunch. Hopefully he can pop in, as he did last year.
Seems to be a considerable concern about conspicuous consumption. Any actors or actresses here seem come from faster-growing markets such as India or China.
Apparently half of the Swiss government (4 of their 7 bundesrat) met the Chinese premier at Zurich airport as he landed in his Air China 747. The 747 towers above most others parked on the runway, where there is considerable private plane activity. Security very tight, with police and dogs patrolling. The usual anti-globalisation demonstrations seem to have taken place in Geneva a few days ago rather than in Davos – at least so far. According to reports, they were very low key. We clearly haven’t been able to communicate the benefits of free-trade and globalisation very effectively. With the pound at SFr1.6, maybe I should be demonstrating.
Sir Martin Sorrell is chief executive of WPP
No prizes for guessing what is worrying the 2,500-odd delegates due to arrive in Davos this week (albeit probably not too visibly in their corporate jets this year). Within minutes of the World Economic Forum permitting delegates to sign up for events at the meeting, which starts on Wednesday, some sessions were hugely oversubscribed.
A worthy debate on how corporations can affirm the “community” (featuring Jamie Dimon, CEO of JPMorgan Chase) was not one of these; yesterday that still had plenty of space.