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Get Four
|  | JANUARY 26, 2005
By Bruce Nussbaum Talking Chinese at Davos China's rising economic power dominates discussion at the World Economic Forum, though Beijing has yet to send a high-level team  China's growing economic and political power dominates a good portion of the agenda at this year's World Economic Forum in Davos. The nation's expanding role is one of the 12 "tough issues" that are the framework for the forum this year. No less than nine sessions are focused on China. And while Beijing continues to shy from sending an official high-powered delegation to Davos, plenty of Chinese are here talking about the issues of the day.
What are the tough topics involving the Middle Kingdom? The sustainability of its hot growth tops the list. The point was underscored on Jan 26, when Beijing reported that the country's economy grow at a sizzling 9.5% in the fourth quarter of 2004 -- nearly a full percentage point higher than most economists had expected. Chinese officials have been trying to slow growth to a more sustainable pace. YUAN FOCUS. Davos participants will discuss sharply rising wages in China's south in a session entitled "Nurturing Early Stage Investment in China." Climbing salaries are narrowing the country's price advantage faster than anticipated (see BW, 12/6/04, "The China Price"). South China is where most foreign factories are located, and despite the nation's huge population, there's a growing shortage of single women workers willing to accept very low wages. More professional employees in software and engineering are also demanding much higher compensation. This is a current concern for U.S., European, and Japanese multinationals. So is how to get your profits out of China, another topic in this investment discussion on China. A session on "Managing the Chinese Economy's Pressure Points" will examine the yuan's revaluation, which is also a big issue at Davos. The betting is that some revaluation will occur over the next year, but Beijing has proven previous estimates very wrong in the past. PART OF THE SOLUTION. There's speculation at Davos that the Europeans are asking for a quid pro quo from China. They're lifting the arms embargo imposed after the Tiananmen Square massacre, but in exchange, they want China to revalue the yuan against the U.S. dollar. That would take pressure off the euro, which has been rising strongly against the dollar, in part because the yuan has remained tied to the buck. Nearly all the greenback's slide has occurred against the euro, even as the U.S. trade deficit with China has grown. But the talk of a deal is only Davos gossip. So far. Name any problem around the world, and China is part of the solution these days. A session called "Forecasting China's Impact on the World's Resources" will deal with how China's strong economic growth is pushing up prices for oil and virtually all other commodities. If the world economy is to shift to a more sustainable basis, a goal shared by most European participants here, then China has to be part of the move. Other sessions will be held on "Asia's New Multinationals," which will focus on China's new international corporations, as well as "What Does It Mean to Be Chinese?" that will deal with Chinese culture and identity in a time of vast technological and economic change. HIGH-POWERED TEAM NEEDED. Davos will also hear talk about how the Chinese are playing a growing role in cutting-edge design, in a session on "Cool in Asia." Increasingly, Chinese kids are defining what's cool in consumer electronics and graphic design. And Chinese designers are giving form to a growing number of products around the world. Tsinghua University is becoming a center for design education and is represented in Davos this year by Li Yongcun, professor at the Academy of Arts & Design. In addition to Li, among the Chinese attending Davos are Fan Gang, director of the National Economic Research Institute; Wu Jianmin, president of the China Foreign Affairs University; Yuan Ming, director of the Institute of American Studies, Peking University; Jack Ma Yun, CEO of Alibaba.com (China); Wu Qing, director of the Rural Women's Knowing All Magazine; Zhu Ling, editor of the China Daily Newspaper Group; and Chen Zhu, vice-president of the Chinese Academy of Sciences. With so much discussion focused on China at Davos year after year, it's time for Beijing to start sending its top political leaders and economic policymakers as well. At the World Economic Forum, it's now very cool to be Chinese.  Nussbaum, editorial page editor for BusinessWeek, is at the World Economic Forum in Davos
BW MALL
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