Davos 2024: Chinese premier talks economic resilience, trust deficit

    Premier Li addresses the trust deficit in the global economy, proposes measures to boost coordination, stabilize supply chains, and spur green development.
    Premier Li Qiang's attendance at Davos is the highest profile official Chinese presence since President Xi Jingping's visit in 2017. Photo: Shutterstock
    Jason WangAuthor
      Published   in Macro

    What happened

    Against the backdrop of global geopolitical and economic uncertainties, Chinese Premier Li Qiang made a notable appearance at the World Economic Forum in the picturesque Swiss alpine village of Davos.

    Li delivered a keynote speech on Tuesday, highlighting the resilience of the Chinese economy. He said the economy was estimated to have expanded by approximately 5.2 percent in 2023, surpassing the official target set at around 5 percent. This economic performance served as a testament to China's adaptability and robustness in the face of global challenges, he said.

    Regarding China’s recent economic performance, Li emphasized that the country’s contribution to global growth has remained steady at about 30 percent and that its scientific and technological talent pool remains the world’s largest.

    Addressing the theme directly, Li put forward five proposals to bridge the trust deficit in the global macroeconomy: better international coordination of macroeconomic policy; increased industrial specialization among countries to stabilize supply chains; more open international exchange of scientific and technological know-how; enhanced global collaboration on green development and addressing climate change; and better North-South cooperation.

    The Jing Take

    Notably, Li’s attendance is the first high-profile visit by a Chinese official since 2017, when President Xi Jinping attended, demonstrating China's commitment to actively engage in global discussions and foster collaborations.

    “We are now advancing Chinese modernization on all fronts through high-quality development. Delivering modernization to more than 1.4 billion people will be a remarkable achievement in human history, one that will provide continuous impetus to the development of China and the wider world,” Li told the Davos audience.

    He highlighted the importance of China's expanding middle class, currently at 400 million, projected to reach 800 million in the next decade. Li pointed out that urbanization rates remain 10 percentage points lower than in developed countries, indicating continued migration to cities, creating market opportunities as urban households upgrade their consumption patterns. This, he said, will generate substantial demand in areas such as housing, education, medical services, and elderly care.

    Urbanization in China will continue to propel growth, Premier Li Qiang's said at The World Economic Forum. Photo: Shutterstock
    Urbanization in China will continue to propel growth, Premier Li Qiang's said at The World Economic Forum. Photo: Shutterstock

    Nicolas Aguzin, CEO of Hong Kong Exchanges, expressed optimism about China's long-term prospects, citing the country's position as a global powerhouse with various strategies for driving growth and creating opportunities.

    “What’s more, China has the policy resources to solve its economic headwinds. For example, its urbanization rate has just reached the world’s average of 60 percent, and the government is actively promoting the construction of affordable housing for low- and middle-income groups. As long as China continues to encourage rural-urban migration, there will continue to be large demand for real estate in major regions,” he adds.

    During Li's official visit to Switzerland, he engaged in bilateral meetings with Swiss President Viola Amherd and other prominent government officials, aiming to strengthen the innovative strategic partnership established in 2016, the first of its kind between China and a foreign country.

    Following the trip to Switzerland, the 64-year-old Chinese premier will proceed to Ireland for an official visit. There, discussions will prioritize topics such as trade, green development, and education.

    Tom Harper, a lecturer in international relations at the University of East London, acknowledges China's continued central role in the global economy. He observes a shift from being a manufacturer of cheap, low-quality goods to producing more advanced technologies, a transformation already underway to a certain extent.

    The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

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