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

Advertising

Advertising

Advertising

the European Sting Milestones

Featured Stings

How to build a more resilient and inclusive global system

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

UN agriculture agency chief calls on world’s mayors to make ‘global commitments local realities’

Ukraine: turning challenges into opportunities


Galileo and EGNOS programmes back in orbit powered with €70 billion

Immigration crisis at its very worst: EU to outsource rescue business to North Africa?

Russia can no longer be considered a ‘strategic partner’, say MEPs

IMF launches a new offensive against Germany

Nigel Farage and Boris Johnson: who forced the two ‘brave’ Brexiteers to quit?

Schengen: new rules for temporary checks at national borders

The issue of mental health for modern young doctors

Is continuous sanctioning the way to resolve the Ukrainian crisis?

Global ageing is a challenge – and an opportunity

EUREKA @ European Business Summit 2014: Innovation across borders – mobilising national R&D funds for transnational innovation in Europe

UN chief welcomes start of Church-mediated national dialogue in Nicaragua

We finally have a life-saving vaccine for Ebola

As tech disrupts our jobs, it’s not too late to turn pain into gain

Conflict diamonds and climate change: Cooperate, don’t compete over natural resources urges Guterres

Back to school: Schoolchildren to receive milk, fruits and vegetables at school thanks to EU programme

Why Sweden’s cashless society is no longer a utopia

COP21 Breaking News_04 December: Commitments Made to Reduce Black Carbon, Methane and HFCs

“Two Pack” approved: Is democracy chased away from Brussels?

What matters most to young Europeans?

Global economy to see ‘steady’ growth of three per cent in 2019 despite risks, says UN

The crunch ‘COP 24’ UN climate change conference: what’s at stake and what you need to know

This Mexican company is making biofuel from cactus plants

The Parliament rejects cultivating the wrong seeds of the Commission

Let the Italians have it their way, it may be good for all Eurozone

Germany may have a stable and more cooperative government

The quality of health education around the globe

CLIMATE CHANGE FOCUS: Climate-proofing Timor-Leste

Don’t dismiss start-ups founded by millennials. This is how they succeed

Brexit is happening now but the UK hasn’t really assessed the impact of a “no-deal” divorce

Palestine refugee crisis ‘expanding’; leaving highest number at risk this century across Gaza

Chinese tech investors are turning towards MENA. Here’s why

Pumping more money into banks but leaving them unregulated doesn’t help

Safe spaces offer security and dignity for youth, and help make the world ‘better for all’: Guterres

How can entrepreneurship tackle the migration crisis in the EU?

3 megatrends for the factories of the future

Yemen: ‘A great first step’ UN declares as aid team accesses grain silo which can feed millions

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

EU-Russia summit in the shadows of Kiev’s fumes

Brexit: European Commission intensifies preparedness work and outlines contingency action plan in the event of a no deal scenario with the UK

These five exercise trends will help society and your health

A Sting Exclusive: “Change is challenge, change is opportunity”, Commissioner Bienkowska cries out live from European Business Summit 2015

This is how travel hotspots are fighting back against overtourism

Europe split in confronting the US sanctions on Iran, Washington isolated

Movius @ MWC14: Discussing novel Communications Applications over a “CAFÉ”

Radioactive nuclear waste is a global threat. These scientists may have a new solution

Anti-vaccine sentiment one of 10 biggest health threats, says WHO

Human rights: breaches in Iran, Saudi Arabia and Sudan

EU Commission: a rise in wages and salaries may help create more jobs

High unemployment to continue haunting the EU

Google’s bare truth: Europe’s Chief denies EU accusations but admits they “don’t always get it right”

Italy’s populist government appears determined to drive EU economy and markets into recession

5 lessons for the future success of virtual and augmented reality

Scientists are using machine learning to unlock the mysteries of long-dead languages

Palestinian students ‘compelled to drop dreams because of financial cuts’

Quality Education on the table at the European Parliament

Libya stands at a ‘critical juncture’, UN mission head tells Security Council

Central African Republic: UNICEF outlines key actions so fresh peace deal can make real difference for children

The Fourth Industrial Revolution is about to hit the construction industry. Here’s how it can thrive

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