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

Why do medical curricula shouldn’t neglect the Sustainable Development Goals

These are the countries that have made their climate commitments law

Agreement reached on new EU Solidarity Corps

Easing funding woes for UN agency assisting Palestine refugees a ‘wise investment for today and the future’

We can end TB right now. Here’s how

International Court of Justice orders Pakistan to review death penalty for Indian accused of spying

On World Bee day, human activity blamed for falling pollinator numbers

Half the population of Yemen at risk of famine: UN emergency relief chief

The Eurogroup offered a cold reception to IMF’s director for Europe

‘Preserve, revitalize and promote’ indigenous languages, or lose a ‘wealth of traditional knowledge’, UN chief says

EU seems to fail its moderate migration promises postponing them for end 2015

Eritrea sanctions lifted amid growing rapprochement with Ethiopia: Security Council

Backed by UN agency, countries set to take on deadly livestock-killing disease

Future of EU farming: MEPs push for modern common policy with fair funding

Helping small businesses fight cybercrime benefits the global ecosystem

How digital can transform healthcare in Asia for millions of people

The succesful cooperation

Member States’ compliance with EU law in 2018: efforts are paying off, but improvements still needed

Finland has just published everyone’s taxes on ‘National Jealousy Day’

A shortened EU Summit admits failures, makes risky promises

Central African Republic militia leader and football executive, transferred to ICC

United States: UN chief ‘deeply saddened’ by deadly California wildfires

Italy should boost investment in training for the future of work

End racist discrimination against Afro-European people in the EU

Does EURES really exist?

The EU Commission lets money market funds continue the unholy game of banks

Metrics of the Sustainable Developments Goals: Can we trust our data?

Trade, taxes and other takeaways from Li Keqiang’s speech to the World Economic Forum

So different, so close – for two twinning cities

The influence of the multilateral agreement on migrant health

UN ceasefire monitoring chief tours Yemeni port of Hudaydah

Samsung’s profits fall as cheaper smartphones gain market share

Social Committee teaches Van Rompuy a lesson

Permanent structured cooperation (PESCO) on the table of NATO Defense Ministers amid US concerns

‘Revved up climate action’ needed to counter ‘prolonged’ and deadly storms like Cyclone Idai: Guterres

UN condemns deadly simultaneous terrorist attacks on military camps in Mali

Let’s Learn

Cyclone Idai: UNICEF warns of ‘race against time’ to protect children, prevent spread of disease in flood-ravaged Mozambique

Japan’s holiest shrine is pulled down and rebuilt every 20 years – on purpose

Romania: MEPs are deeply concerned about judicial independence and rule of law

Eurozone guarantees all banks with…taxpayers’ money

“Asia-Pacific takes stock of ambitious development targets”, written by the Heads of UNFPA and ESCAP

Federalist EU ‘naively’ believes Washington shares her TTIP high fever

Afghanistan probe: ‘at least 60 civilians’ killed after US military airstrikes on alleged drug labs

Brexit: when the hubris of one man can set the UK, the EU and the entire world on fire

The European Union and Central Asia: New opportunities for a stronger partnership

FROM THE FIELD: Faces and Voices of Conflict

Larger species are more at risk of extinction than smaller ones – here’s why

Thousands of Belgian schoolchildren have gone on strike to protest climate change

The European Agenda on Migration: EU needs to sustain progress made over the past 4 years

Hate speech exacerbating societal, racial tensions with ‘deadly consequences around the world’, say UN experts

No way out for Eurozone’s stagnating economy

International World Summit Award calls for outstanding digital applications with impact on society from 178 UN member states

‘Deteriorating’ human rights in Belarus amounts to ‘wholescale oppression’: UN expert

Not faith, ‘but those who manipulate the faithful’ driving wedge between religions, UN-backed forum in Baku told

The big five EU telecom operators in dire straights

How we can work together in the fight against NCDs

European Commission launches infringement proceedings against the UK following its failure to name a candidate for EU Commissioner

3+1 issues to haunt tomorrow’s EU Summit

3 ways to accelerate the energy transition

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