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Davos, a place for big ideas

By You Nuo (Chinadaily.com.cn)
Updated: 2010-02-02 14:45

You Nuo

Davos is a small town lying in a beautiful Alpine valley. But as many participants said, it's a place for big ideas. The more the world is under the pressure of short-term problems the more it is in need for big ideas. This is true for governments and companies in the developed as well as the developing countries.

But sometimes, big ideas can't easily be defined in words. As the AP reported, 2010's five-day WEF ended with the agreement that fragile recovery is under way but "no consensus on what's going to spur job growth and prevent another global economic meltdown."

That's right. In fact, many were talking about a "double-dip" scenario coming perhaps in the second half of 2010, meaning another difficult time after a period of weak growth. The second difficulty could be more lasting because for any country, especially large ones like the US and China, adjusting the business structure would be a much harder job than having some growth through debt financing, and continuing debt financing can easily lead to some dangerous asset bubbles.

As Peter Sands, CEO of the British Standard Chartered Bank, said: "Get it wrong one way and we risk a new crisis; get it wrong the other way and we'll take the steam out of the recovery and reduce the chances of creating new jobs." His description applies to not just the banking industry. No country, in fact, has so far shown a credible model of how to generate new growth by avoiding a new bubble economy.

There is chance, as most participants agreed, that developing countries, including China, could do better, because they have more options in spending money and generating growth. But whether they can actually do that would also require them to strive first of all for their real strengths, instead of just temporary pretty ecords.

The author is senior consultant and business columnist at China Daily. He is currently in Davos for the Davos Forum.