Session Five: China’s Response to the Global Financial Crisis: What Role can China Play to Support Global Recovery?
2:30PM – 4:00PM, November 13, 2009
Keynote Address by HE President Hu Jintao of the People’s Republic of China followed by a dialogue on China’s longer term economic outlook led by:
- Mr Jiang Jianqing, Chairman & Executive Director, Industrial and Commercial Bank of China (ICBC)
- Mr Hermann Ude, CEO, DHL Global Forwarding
- Mr Derek Williams, Executive Vice President, Oracle Corporation
- Ms Marjorie Yang, Chairman, Esquel Group
Moderated by Mr Andrew Stevens, Anchor and Correspondent, CNN
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The afternoon’s first session focused on China’s role in the global economic recovery. With developed countries mired in recession, China is now seen by many as the largest engine for global economic growth, and the country that may “lead” the world out of recession. But many questions persist, such as whether the world economy can rebalance, and whether China’s recovery is sustainable.
The session consisted of a speech from Chinese President Hu Jintao followed by a lively discussion between Jiang Jianqing, Chairman and Executive Director, Industrial and Commercial Bank of China (ICBC), Hermann Ude, CEO, DHL Global Forwarding, Derek Williams, Executive Vice President, Oracle Corporation, and Marjorie Yang.
In his speech, President Hu shared China’s perspective of the global economic crisis, its proposals for economic recovery, as well as its experiences so far in countering the economic maladies created by the crisis.
President Hu stressed the need for a multi-pronged approach to address the “underlying structural problems” of the world economy. He called for greater trade liberalization and facilitation, drawing particular attention to the “unreasonable restrictions imposed on developing countries.” This approach would include a resolution to the Doha round of WTO negotiations, as well as for the developed countries of APEC to adopt measures to meet the Bogor goals in 2010.
The other prongs of Preident Hu’s approach were 1) further regional integration through reforming economic structures and regulations in order to improve the business environment and 2) advancing reform of the international financial system. He called for a “comprehensive, balanced, incremental and results oriented approach working for a fair, just, inclusive and well-managed financial system and institutional environment conducive to development.” He called for developing nations to have an increased voice in international financial institutions.
President Hu also cited the shift in economic development patterns. He touched on the increasingly contentious issue of technology transfer, calling for a reduction in man made barriers to such transfer. Looking at concerns over “green protectionism,” the President called on APEC economies to avoid a new “green divide.”
The speech’s focus then shifted to China’s policy adjustments to help mitigate the effects of the crisis: 1) increasing domestic demand through new patterns of growth, especially in rural markets, 2) intensifying reform of the Chinese financial system, 3) improving people’s livelihood, with an emphasis on environmental protection, social safety nets and social security benefits, and 4) continuing to follow the strategy of “opening up,” improving free trade agreements and promoting regional integration.
President Hu re-emphasized that China, despite being the world’s fastest growing large economy and so-called “engine” of global growth still faced many challenges. But he remained confident that as long as cooperation is deepened, the Asia Pacific will see a better future of enduring peace and common prosperity.
Following President Hu’s speech and a thank-you from Ms Deborah Henretta, Group President for Asia, The Procter and Gamble Company, the audience answered an interactive poll, showing a broad consensus on the importance of China’s role in the global economic recovery. When asked how they would rate China’s contribution, the majority (71%) said “strong,” 20.9% said it was “moderate,” and 7.8% said it was “limited.”
Moderator Andrew Stevens, CNN anchor and correspondent, then welcomed the four panelists to the stage. The four panelists represented a wide-range of sectors: banking and finance, shipping and logistics, information technology, and textiles and retail. Panelists offered specific industry-related insights on the crisis in China: Jiang Jianqing of Chinese bank ICBC stressed their efforts in investing in Chinese infrastructure; Hermann Ude of DHL Global Forwarding highlighted the prevalence of intra-Asian trade and the rise in new trade routes, such as China-Brazil; Marjorie Yang of Esquel Group described the emergence of a Chinese consumer market for luxury goods; and Derek Williams of Oracle described the rise of R&D and intellectual capital in the region.
Discussion centered three main themes: China’s efforts in mitigating the crisis, the role of the Chinese private sector, and the potential for global economic rebalancing. In evaluating China’s efforts in mitigating the effects of the crisis and whether it could do more, panelists and audience members drew attention to issues such as the value of the Chinese yuan, the efficacy of current stimulus measures, the continued need for stimulus packages, and the development of intra-Asian trade. The consensus was that Chinese measures have been effective so far, and that the only sign of the removal of stimulus funding or a revaluation of the currency would be a complete economic recovery.
The second theme was the role of the Chinese private sector. Panelists discussed the rise of Chinese brands relying on Chinese-made technology, such as Haier, and predicted that such companies would carve out an increasingly large role in the global market in coming years. From the opposite perspective, representatives of non-Chinese companies pointed out an urgent need for companies to begin exporting to China’s growing consumer market.
The third and possibly most important theme was rebalancing the global economy, and China’s ability to drive growth. Participants acknowledged the rise of the Chinese middle class, and how China simply through its scale could help drive global growth. Hermann Ude of DHL pointed out that China has all of the demand characteristics for growth: effective and productive labor, design capability, and growing demand. However, there was a consensus that China, despite its fast rate of development, may be a long way off from replacing the gap in global demand created by the recession in the West. Yet more and more people predict that the day China can drive economic growth is coming increasingly soon.
