WEF Davos 2016 LIVE: “There is a communication issue (about China) which markets don’t like” Christine Lagarde, Managing Director of IMF stresses from Davos

Where Is the Chinese Economy Heading ?: Christine Lagarde

DAVOS/SWITZERLAND, 21JAN16 – Christine Lagarde, Managing Director, International Monetary Fund (IMF), Washington DC, speaks during the session ‘Where Is the Chinese Economy Heading?’ at the Annual Meeting 2016 of the World Economic Forum in Davos, Switzerland, January 21, 2016. WORLD ECONOMIC FORUM/swiss-image.ch/Photo Jolanda Flubacher

At the second day of the World Economic Forum 2016 in Davos the world was anticipating very much the session on China’s outlook and how its growth slowdown affects the entire world. This issue was addressed in a session called “Where is the Chinese Economy heading?” which took place in Sanada room of the Davos Congress Hall.

The panel was moderated by Francine Lacqua, Editor-at-Large and Presenter of Bloomberg Television and among the guests were Jiang Jianqing, Chairman of the Board of the Industrial and Commercial Bank of China Limited, Ray Dalio, Chairman and Chief Investment Officer of Bridgewater Associates LP, Zhang Xin, Chief Executive Officer and Co-Founder of SOHO China Limited, Christine Lagarde, Managing Director of the International Monetary Fund (IMF), Fang Xinghai, Director-General of the International Economic Department in the Office of the Central Leading Group for Financial and Economic Affairs and Gary D. Cohn, President and Chief Operating Officer of the Goldman Sachs Group Inc.

China’s economic outlook

The discussion began by Jiang Jianqing who stated that there is no problem in the Chinese economy which contributed to the world’s economic growth by 6.9% in 2015. Ray Dalio said though that there are four major challenges that are causing volatility in the second largest world economy. Debt, economic, capital market and balance of payments are the challenges that have to be dealt with reforms by the Chinese leadership in order for the economy to flourish. Ray Dalio also commented on this issue like this: “it is a new China”. These adjustments will need two to three years to be fully absorbed by the system and it will have a serious impact on the whole world, not just China. However, he expressed his positivism since China knows the mechanisms to deal with it and succeed in restructuring its economy.

Christine Lagarde then said that China is undergoing a transition period when relying more on consumption and less on investments. It is logical to have a financial noise when the world is not aware of the policy that China is undertaking. “There is a communication issue which markets don’t like”, the Managing Director of IMF argued.

Economic strategy change drags growth down

Fang Xinghai underlined three main reasons behind the current sluggishness of the Chinese growth. Mr Fang agreed with Christine Lagarde on the communication issue and added as reason the economic strategy followed to swift the economy from an investment-led to a consumption-led one. As a last concern, the Director-General of the International Economic Department mentioned the doubts that exist today regarding its implementation.

His personal view though was that the economy is strong and patience is needed in order to allow the system to fully communicate with the market. “We have the strongest leadership in the world; Fang Xinghai stated showing that there is nothing that China cannot overcome.

Zhang Xin remarked that the Chinese economy is doing well in comparison to the stock market and pointed that this is happening because “investors are not getting the right messages”.

Chinese companies

The Chief Executive Officer and Co-Founder of SOHO China Limited stated that the power to increase China’s growth is the private sector. Especially, Ms Zhang said that the undergoing reforms must support the Small and Medium Enterprises (SMEs) and that those companies have to get more funding without necessarily producing profit.

Gary Cohn from Goldman Sachs supported that access to the Chinese companies must be given to people and that it should be the market to decide which enterprises will be public and which are not.

Will China’s policy succeed to overcome market instability?

There was a clear positive view between the participants of the panel that China will succeed in the execution of the necessary reforms and implement the right policies to bring back economic growth and market steadiness. Christine Lagarde noted that patience is necessary during eras of volatility and made three points to be able to help the markets and the economy revive; “clarity of communication, clarity of purpose and implementation of the reforms identified”. Last but not least, Mr Fang urged major economies to cooperate and communicate better and more in order to bring the desire outcome, economic growth.

All in all, the main outcome of this intriguing session is that the Chinese economy is growing (6.9% in 2015 and 6.5% according IMF prediction in 2016) contributing largely to the global economic growth. However, a better communication is mandatory in order to be able to express which policies are going to be undertaken to achieve the economy’s transition from investments to consumption.

Stay tuned from 20 to 23 January as the Sting will be once more producing top class critical LIVE media coverage from the Congress Centre in Davos, Switzerland. 

Join the Hive!

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

A very good morning in European markets

European Banking Union: Like the issue of a Eurobond?

Eurozone in trouble after Nicosia’s ‘no’

European Commission adopts rules to ensure a smooth transition to its next President and the next College of Commissioners

JADE Spring Conference 2018 is on its way: Young entrepreneurs gather in Brussels to shape Europe

How Africa and Asia are joining forces on universal healthcare

Search Engine neutrality in Europe in danger: Are 160.000 Google filtering requests good enough?

EU job-search aid worth €9.9 million for 1,858 former Air France workers

The world needs carbon-neutral flying. Here’s how to bring it one step closer

UN standing with Zimbabwe, Malawi, Mozambique as Southern Africa death toll from deadly cyclone mounts

‘Education transforms lives’ says UN chief on first-ever International Day

Food choices today, impact health of both ‘people and planet’ tomorrow

These are the UK’s biggest trading partners

These are the world’s least – and most – corrupt countries

Killing of Egyptian peacekeeper in Mali ‘may constitute war crimes’ Guterres warns, urging ‘swift action’

From Kenya to China, here’s why countries should start working together on AI

EU elections: Can EU citizens’ awareness eradicate fake news more efficiently than Facebook, Twitter and Google?

These are the best cities for tech

It’s time to switch to a four-day working week, say these two Davos experts

How storytelling can be a force for social change

Bacteria vs. humans: how to fight in this world war?

Can Kiev make face to mounting economic problems and social unrest?

“Smoking steam instead of tobacco, are the E-cigarettes a safer alternative?”

Is there a cure for corruption in Greece?

There’s a new global technology race. It needs better trade rules

Food safety: New rules to boost consumer trust approved by MEPs

Why the merchant ships can pollute the atmosphere with CO2 quite freely

“The Belt and Road Initiative aims to promote peace, development and stability”, Ambassador Zhang of the Chinese Mission to EU highlights from European Business Summit 2018

Anxious gorillas, thirsty koalas and lame cows – how climate change is making animals miserable

Gender Equality in Medicine: are we now so different from the Middle Ages?

Syrian crisis is ‘clearest example’ of foreign investment in terrorism, Deputy Prime Minister says at UN

UN General Assembly President defends ‘landmark’ migration compact

These countries give the most aid – and are the most principled about it

EP Brexit Steering Group calls on the UK to overcome the deadlock

Why the West supports the yen’s devaluation and Japanese over-indebtedness

Global leaders and companies pledge to reduce the gender pay gap by 2030

Norway’s electric car market has overtaken traditional vehicle sales

Egypt is building one of the world’s largest solar parks

JADE President opens JADE Spring Meeting 2014

EU’s Mogherini visits Turkey “to step up engagement” and highlight interests

Data Protection Regulation one year on: 73% of Europeans have heard of at least one of their rights

If people aren’t responding to climate warnings, we need to change the message

A new crop of EU ‘Boards’ override the democratic accountability and undermine the EU project

The end of Spitzenkandidat: EU leaders concluded unexpectedly on EU top jobs

Prospect of lasting peace ‘fading by the day’ in Gaza and West Bank, senior UN envoy warns

Brexit: Only Corbyn and May in concert can make the needed compromises

The EU Commission vies to screen Chinese investment in Europe

Will the EU be condemned by the International Criminal Court for violating migrants’ human rights?

Only the Americans are unhappy with the ceasefire agreement in eastern Ukraine

JADE Generations Club 2015: Knowledge vs. competences – Do not wait for the change to happen, but make it happen

UN space-based tool opens new horizons to track land-use on Earth’s surface

LGBTQ+: The invisible poor on our healthcare

With millions of girls ‘at risk’ today of genital mutilation, UN chief calls for zero tolerance

Yemen update: UNICEF chief condemns attack in Taiz that claims lives of seven children

Chinese economy to raise speed and help the world grow

The 10 most common types of plastic choking Europe’s rivers

An economist explains how to value the internet

EU Youth Conference in Amsterdam: enabling young people to engage in a diverse, connected and inclusive Europe

The remote doctor, can it ever work?

More Stings?

Trackbacks

  1. […] is a communication issue,” Lagarde said on a Bloomberg panel on China. On the same panel, Gary Cohn, president of Goldman Sachs, echoed that sentiment, saying “the […]

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s