Davo's focus on pressures in uncertain post-crisis future
- Source: Global Times
- [22:28 January 31 2010]
- Comments
By Xiao Kailin
The political leaders and financial magnates who took the world into financial crisis are now clashing as to how to rebuild it.
The arrival of these elites broke the quiet of Davos, a small town in Switzerland that regularly hosts one of the world's most important economic forums.
Last year's Davos was marked by fear, as it took place amid the spreading economic maelstrom. The atmosphere this year is more anxious. Has the crisis actually ended? What will come next? What kind of new economic order will be made? What can individual countries do?
As the focus of world leaders' discussion shifted from fighting the economic crisis to seeking the formation of yet another new world order, the same old familiar squabbles emerged.
Two clear-cut groups have appeared, international financial giants and government regulators. Politicians are pointing fingers at bankers' sky-high bonuses and their renewed arrogance after having to beg for government money to survive the crisis. At the same time, bankers criticized government bailout and stimulus policies.
The new economies, such as China and India, that were pushed to the fore during the financial crisis are playing a central role in the forum. But because of their outstanding performance in the past year, they now have too many expectations and responsibilities.
During the crisis, nations had no choice but to cooperate. As the recession fades, however, the willingness to cooperate is rapidly declining.
There are widely diverse views from different groups about where the global economy should go next. The great powers who lost some of their previous advantage want to regain their leading positions.
One potential danger is that the year-long crisis may have damaged the consensus on globalization. French President Nicolas Sarkozy has publicly criticized globalization at Davos, arguing that it was the root of the financial crisis. Intellectuals and the mass media are reconsidering the negative effects of globalization, and discussing whether the process needs to be changed.
All this poses problems for China, the world's largest developing country. In the post-crisis era, trade protectionism is re-emerging, often directed against China.
The opinion that China's low consumption rates and high savings caused a global imbalance is becoming popular again. Even the praise of China is double-edged. Many politicians blame China for problems in their own societies.
With a growth rate of 8.7 percent in 2009, China has already more than played its part in battling the crisis. Under pressure from international society, China needs to think and respond calmly to deal with the post-crisis era.
Both this year and the last, China has been showing a confident face at Davos. But it meant different things each time. Last year, the confidence shown by Chinese Premier Wen Jiabao emphasized more on maintaining the vitality of Chinese economy to push the recovery of world economy. This year, Vice Premier Li Keqiang's bold approach is instead focusing more on China's ability to cope with repercussions from the extreme measures taken to deal with the crisis, and the long-standing problems of the Chinese domestic economy.
China may eventually become a true superpower in the eyes of the world, but it will follow its own steps. There is still a wide gulf between the outside world's expectations and China's strength. China should not be pressured into assuming too much responsibility too soon.
Li Keqiang listed five prescriptions of the “post-crisis” world economy, ranking cooperation as the first. China currently believes that the crisis has not yet really ended and the foundations of recovery are not solid. Only strengthening international cooperation can reduce the risks involved.
He also criticized countries that both advocated free trade and practice protectionism. It is obvious that China will continue globalization, and even stand against those countries that have made their profits from the process and are now ready to withdraw.
Davos' snow-capped peaks give world leaders a chance for quiet reflection in the middle of fierce discussions about the future of the international order. As they depart after the five-day conference, Davos is returning to its normal status as a quiet little ski town.
But the long road of economic and political reordering is only just beginning to be walked.
The author is a Beijing-based journalist. xiaokailin@sina.com
