Optimism was in high supply when global government and business leaders met last weekend in Dalian for the World Economic Forum’s summer gathering. Many agreed that the worst of the economic crisis is over, but that caution is needed while governments figure out exit strategies to move from heavy stimulus spending back into economic normalcy. Many also said they thought China has emerged stronger from the crisis, with more clout as a global power player than ever before. Still, they warned, China will not soon or easily replace the United States as the world’s largest consumer.
Despite Chinese government plans to increase domestic consumption – in part to make up for sluggish exports lost when American consumers stopped buying – experts were quick to remind listeners that the average per capita income in China is just $2,000 per year . Chinese consumers will clearly not replace American ones any time soon.
‘It will take China some time to catch up with the United States – maybe in the next 100 years,’ Zhao Xiaoyu, vice president of the Asian Development Bank in Manila, said during a panel discussion of China’s economic demand.Enjoying this article? Click here to subscribe for full access. Just $5 a month.
Others discussed China’s newfound prowess as a global investor, with African leaders telling several panels that they preferred China’s ‘no strings attached’ investment to development aid from western countries.
‘You can’t constantly be on the receiving end of aid and government handouts,’ said Hannah Tetteh, Ghana’s minister of trade and industry.
But her assertion that China’s investment is better for African nations was challenged by an audience member from Sudan, where China’s investment has drawn widespread criticism for funding a corrupt government. Such discussions only served to highlight a recurring theme at the conference: China’s new power in the world and how it might use it.
In his speech to the gathering, Chinese Premier Wen Jiabao gave few clues on this question, preferring to stick to standard lines about China’s economic recovery and its domestic concerns. He said China’s $587 billion stimulus package had gotten the country back on the right track.
‘The achievements we have made are not something that dropped into our lap,’ said Wen. ‘Rather, they are the results of the proactive fiscal policy and moderately easy monetary policy and the stimulus package that the Chinese government and people have pursued in line with the national conditions.’
While Wen only briefly touched on issues connected with China’s growing global power, the issue was a big topic of conversation among the rest of the forum.
At the same panel Tetteh spoke at, other developing world representatives dished out some strong criticism of western powers, even as they lavished praise upon China for its economic strategies and investments.
In other forums over the three days, global bankers and business leaders discussed how China’s rise will affect the rest of the world. While there appeared no firm conclusion on what exactly China’s new power will mean, most seemed to agree this: In the restructured, post-economic crisis world – from consumer demand to battling climate change – China is set to play a greater role in global decision making.