Absence ... still makes China hot
(China Daily By Zhu Yinghuang)
Updated: 2004-02-05 10:44

On a standard Swiss map, you cannot even find Davos. Yet, the Alpine ski resort is a powerful draw every year, usually in the last week of January, when global leaders and the business elite flock to this often snowbound town for a forum that has been running for 32 years.

Despite its name, the World Economic Forum at Davos does not deal solely with economic issues. Many participants regard it more as a multilateral talk-fest on all major issues which the forum organizers believe should be of urgent concern for leaders from government, business and civil societies.

People are there to talk, to listen, to exchange views and, above all, to expand their connections. "It's more of a community than a forum," one Chinese participant observed. The forum organizers have been trying hard to create a more informal and relaxed atmosphere, and this year even introduced a new policy of discouraging people from wearing ties.

While most participants chose the sessions of their interest, substantial business dealings were conducted at closed-door governors' meetings in various hotels or private discussions at the Congress Centre's lounges. The theme and sessions, in a way, reflect the global agenda of today, but business still plays a key role, as at least half of the participants are business leaders, drawn principally from the forum's members - 1,000 of the foremost companies from around the world.

Agenda for the world

It is said the organizers try to set the agenda for the world community, though many believe there is more talk than action at the forum. Addressing the opening lunch, former US president Bill Clinton urged the participants to act more rather than merely talk, stressing: "We do not have a system the world needs to respond to all the problems in a comprehensive way."

Over 250 working sessions scheduled at this year's forum covered everything from the world economic situation to the aftermath of the Iraq War, from new technologies to media ethics, from business competitiveness to global warming and the ageing population. Following recent years' growing protests worldwide against globalization and this rich and powerful club, the forum this year specially scheduled open debates on globalization and deglobalization, trying to reflect the concerns of non-corporate, non-government interests groups to ease the tension between the "haves" and the "have-nots."

This year's forum did not seem to have a specific focus, unlike in the past several years. In 2001, the concern was mainly the financial crisis; In 2002, it was the after-effects of the September 11 terror attacks - so the forum was moved to New York as a show of support to anti-terrorism. Last year, when the war on Iraq was looming, there was a bitter joust between American proponents of war and opponents. One American participant who was at Davos last year recalled his compatriots were "beaten up." But "it's a lot more comfortable this year," he said.

During an interview with the Wall Street Journal, Klaus Schwab, the founder and executive chairman of the forum, admitted: "Last year, it was certainly the Iraq War which was on everybody's mind. We do not have such an over-riding concern or preoccupation this year, so it's a good opportunity to look at the complex global agenda in a very integrated, systematic and proactive way."

Various as the forum topics were, the theme was skillfully structured in three key words: Partnering for Security and Prosperity. In his welcome speech, Schwab explained: "We will not have security without the promise of prosperity. Security and prosperity can only be achieved through partnership." The words would sound familiar to the Chinese, who often hear of China striving to achieve a good balance among reform, development and stability.

China: Talk of the town

In fact, China stood out as one of the hot topics at the forum. There were several sessions specifically on China issues, but regrettably, there were only a few Chinese panellists and about a dozen Chinese participants at the forum. It seems people cannot afford to ignore China whenever they talk of economic potential. As one of the moderators at the session, Bruce Nussbaum from BusinessWeek of the United States, said: "On every topic, at every panel, we got talk of China."

The International Herald Tribune used the headline for its story: "The talk of the town at Davos: China." The participants were mostly concerned about whether China's economy was overheating; whether the country would be able to sustain its rapid growth in the next decade or so; when the Chinese currency would be revalued; and how Chinese brands can go global, and above all, what will be the impact of China's growth will be on the world in general. The consensus was that China is performing very well economically and the country's future looks promising. Donald Evans, the US Commerce Secretary, pointed out at one session: "China is just a remarkable story," stressing "China is heading in the right direction and is currently in safe hands."

However, people also noticed that there were too few Chinese at the forum - and not even one Chinese official - given the growing weight of China as an important partner in the world arena today. The Wall Street Journal had this headline: "China shuns the spotlight at Davos." The paper even jokingly picked out a young French professor working in Beijing as "the only one representative here from the Chinese Government," quoting his comment: "They don't really need to come. They have all the investment they need."

More presence needed

While it is true the Chinese presence was scarce at the forum, one could easily find Americans and Europeans were predominant at sessions most of the time. According to Dr Schwab, out of over 2,100 participants from 94 countries and regions, roughly 40 per cent were Europeans, 30 per cent Americans and the remaining 30 per cent from the rest of the world. Understandable, as the forum is traditionally a club for the rich and that most of the Fortune 500 companies are from the United States and Europe.

It is also true that we should have more Chinese participants in the future. As one Chinese panellist, Zhang Weiying, vice-dean of the Guanghua School of Management of Peking University, put it: "We are enacting a Chinese drama here without Chinese actors and actresses."

For Chinese officials, Davos is a good platform to make a case for China in a place where people are trying to set the global agenda for the coming years. For Chinese entrepreneurs, who have yet to make their products and services global brands, this is where they could go, establish connections and learn.

Hong Xing, vice-chairman of the Brilliance China Automotive Holdings, also a panellist, said: "In China, to be competitive means you need to be internationally competitive and have an international perspective," adding he wished to see more Chinese business people at Davos in the future. China is a learning society and this is the place where we can learn to communicate and to convince.

Noticing this year's Davos meeting coincided with the Chinese Lunar New Year, Dr Schwab said during an interview with Chinese Central Television and China Daily that he would see to it that the annual meeting next year does not coincide with the Chinese New Year, traditionally a time for Chinese family reunions and lots of social obligations for government leaders. "I hope China will use Davos as a good platform, as China is going to be a fully-integrated member of the world economy. There are still a lot of misunderstandings about China and I believe China is an opportunity for the world," he said.

A sense of optimism among political and business leaders

To give our readers some insights into the just-concluded World Economic Forum, we publish "Snapshots from Davos," reflecting the voices of some of the key figures at the gathering. The interviews were conducted by Li Yong and Rui Chenggang from China Central Television (CCTV). The series will be broadcast on CCTV Channel 2 starting from Feb.5, 2004.

Anchor Rui Chenggang (left) and Li Yong from CCTV prepare for the shooting of their programme, "Snapshots from Davos".

Klaus Schwab, founder and executive chairman of the World Economic Forum:

"I think what is important is to look at the complexity of the world and those issues are all interrelated. The annual meeting has certainly highlighted that there is no prosperity without security, and no security without prosperity. The unique role of the World Economic Forum (WEF) is to look at different issues in a comprehensive way so that we can contribute to the world by making sure that the decision makers, politicians and business leaders are aware of different facets and dimensions of the decisions needed to be taken...

"What is particularly interesting for Chinese friends is that a lot of discussion has a lot to do with currencies. I think the Chinese point is better understood. We also better understand the American imbalances. There is a better understanding across the Atlantic. There are some initiatives launched to improve the American-European relationship. The Arab world has a stronger voice here... So I think our world is becoming a little more rational, and addressing issues not in an emotional way, as it was years ago, but looking at the issues and recognizing that all these issues need world co-operation and partnership between business and government.

"The speech by US Vice-President Dick Cheney is very reconciliatory. He asked the world to enter into more co-operation with the United States. It has impact. But also I think Mr (Iranian President Mohammad) Khatami's speech looking at the divide between the Western world and the Islamic world, and proposing ways how to overcome such a divide, helped have a better understanding between the two worlds."

Michael S. Dell, chairman and CEO, Dell, USA:

"Our business in China is growing very rapidly. We have had four quarters now of growth more than 50 per cent. We are very focused on the computing sector, desktops, note books, servers, storage and services, so Dell is mainly a computing company. That will be our priority in China.

"Wireless notebooks are a very fast-growing part of business in China, you know. The Chinese market is quickly adapting to mobile computing. But we are not going to home-appliance business, we are staying with computing...

"What we see is a US$800 billion market, quite a big market, and tremendous opportunities for us to grow, to expand to new areas, to adjacent areas, so we have no shortage of opportunity. Five or six years ago, Dell was only a US$10 billion company. In the year just finished, we were US$40 billion, we'd like to grow to US$60 billion or beyond in the next several years, so we have very ambitious growth targets. And China plays a very important role in Dell's growth.

"China has a very unique character, just in terms of the size of the market and the growth of the economy. There has never been an economy with such a vibrant workforce of such an incredible size and scale, and I think the growth horizon for China is still very vast. Imagine, even in 10 to 20 years from now, China will still be growing very strongly.

"As for the computing industry, China will become the central component for manufacturing, for the whole industry. It plays a very important role for the industry, not just in terms of growth, but in terms of supply. It is already the fourth-largest market for Dell, and second largest in Asia-Pacific. It is rapidly advancing on the world stage.

Mikheil Saakashvili, president of Georgia:

"What I told the visiting Chinese ambassador and Chinese journalists is that I very much hope to see a bigger presence of China in Georgia because Chinese are resourceful, they are hardworking, they bring in great knowhow, which we lack. They are also setting examples to our people, on how we should work, how we should fight, in order to be better, to improve, to compete...

"I think in this century, everybody will witness how China will emerge. All small countries will have to go to Beijing for policy consultations, because I think the political and economic weight of China will improve dramatically...

"I have already given orders to prepare for the establishment of our embassy in China. It is very important because of Georgia's participation on the "Silk Road," from China to Central Asia, and via sea ports, to Europe...

"Chinese capital could come in, establishing local companies, employing local people, as well as bringing Chinese specialists to our region...

"We have a hydro-power generation plant recently built. China built it in a very complicated situation. Amid all the troubles, Chinese engineers came. They are very brave, very resolute to have put up this station. So we really appreciate that...

"We have several Chinese restaurants opening here. I will go to many of them, because I love them. Chinese cuisine is good. Georgia cuisine is also good but I would say that the only cuisine better than Georgian cuisine is Chinese cuisine. And again I, personally, very much admire Chinese people."

Mohamed El Baradei, director-general of the International Atomic Energy Agency:

"I think Libya's recent decision is a good decision and Libya understood that there is a less secure possibility trying to develop weapons of mass destruction, which will expose themselves to a lot of unforeseen, serious consequences... So I think it is a step in the right direction...

"I don't think our security is better served by having more and more countries acquiring nuclear and other WMDs. I think our security should rest on a system of security that does not depend on WMDs...

"I think Iran, since last October, has taken the right decision to co-operate fully with the agency. So, they are on the right track, we are all satisfied with the level of co-operation of Iran. I hope Iran could continue the co-operation we are getting from them today...

"We had said there was no evidence that Iraq had WMDs, particularly nuclear weapons. So I am not surprised that weapons have not been found. In fact, I am relieved, and the international community should be relieved that we did not find WMDs. But we need to go back to Iraq, the inspection needs to go back to finish the job and move on.

"I think the DPRK (Democratic People's Republic of Korea) issue has to be solved through dialogue, diplomacy. I think it is a very complex situation. The DPRK has a sense of insecurity that needs to be addressed. The DPRK has humanitarian needs that need to be addressed independently from any other issues.

"Humanitarian needs should not be linked to any political calculation. So I believe the DPRK should take the first step to commit themselves to come back to non-proliferation, to commit themselves to dismantle all kinds of weapons they may have under comprehensive verification.

"But once they do that, I hope the international community comes to their assistance, provide them with security assurance, energy and all their material needs.

"I think China is hungry for energy. Nuclear energy is a clean source of energy, you do not have environmental problems, acid rain or the greenhouse effect. So, nuclear technology could provide China with energy on a large scale. We have been working with China to build high-level security and safety infrastructure. And we will continue to do that as you expand the use of nuclear technology.

"I visited China more than four to five times. I am looking forward to more visits. Every time I go I am impressed by the pace of China's social and economic development and also by the depth of the Chinese culture."

Richard Levin, president of Yale University, USA:

"Things are quite different this year, the tensions between Europe and the United States over Iraq; and between the developing countries and the United States, also over Iraq, seem to have subsided dramatically. People are much more optimistic this year about the prospects of world economic recovery, and are hoping the US economy sustains rapid economic growth the whole year, so I think the mood is much more favourable to world-wide co-operation.

"I myself have been pessimistic about the opportunity for progress, towards trade liberalization for the Doha round. Last year was a terrible year for world trade, the Cancun meeting blew up, there was no progress made on any issue on the development agenda, or agriculture issues which are of most concern to the developing countries. So, what surprised me is that there is some optimism among negotiators. I chair the panel with the Egyptian trade minister, who is the vice-chair of the council of WTO. He is quite optimistic that progress can be made. So I come with the sense that we can make some progress on further trade liberalizations this year.

"The Chinese economy is getting bigger and more important. It is a boost to neighboring countries as well. Europe is the sluggish part of the world. Even the Europeans think the strong US growth will help them have a stronger year this year.

"What happens in China holds tremendous interest. People are concerned about China overheating, I think there is a mixed picture on that. In some sense, it is overcapacity some industries may have, rather than overheating. The issue of concern to the United States and Europe is: Will the low cost of labour in China displace many jobs in our countries? But I think history teaches us it only creates opportunities, in making the same thing at lower costs and consumers benefit from lower costs, they can spend money on other things. That creates jobs in the United States, and raises people's living standards."