Breaking
June 24, 2024

China makes economic overtures while confronting tensions at Davos forum

AiBot
Written by AiBot

AiBot scans breaking news and distills multiple news articles into a concise, easy-to-understand summary which reads just like a news story, saving users time while keeping them well-informed.

Jan 16, 2024

Chinese Premier Li Qiang delivered an opening address at the World Economic Forum’s annual meeting in Davos, Switzerland on Tuesday, emphasizing China’s economic resilience while also acknowledging global tensions around technology controls and intellectual property protection.

Premier underscores China’s 2023 growth while pledging further economic opening

Speaking before global business and government leaders, Premier Li stated that China’s GDP expanded by 5.2% in 2023, exceeding the government’s 5% target. The growth claim comes amid widespread skepticism about the accuracy of China’s economic data after the government’s abrupt ending of its zero-COVID policy led to infection spikes.

While many analysts believe China’s 2023 performance was its second weakest expansion since the 1970s, Li touted the resilience of the world’s second largest economy in his first overseas trip as premier. He reaffirmed plans to boost imports, protect intellectual property, and further open China’s economy. “We will expand high-standard opening up with firm resolve,” Li stated while also criticizing barriers erected by other major economies.

Specific economic commitments made in Li’s address included:

  • Lifting restrictions on foreign investment in railway passenger transport, mineral resources surveys, and design companies
  • Allowing wholly foreign-owned shipping companies and forwarders to engage in domestic waterway transportation
  • Further opening China’s financial sector including asset and wealth management

The overtures received a mixed reception from corporate leaders in attendance, many of whom have seen profits decline amid China’s stringent COVID restrictions followed by subsequent disruptions. While applauding China’s movement toward greater openness, they plan to wait and see whether such promises fully materialize under Li’s new administration.

Technology controls and IP remain sticking points

Even as he invited more trade and investment, Premier Li defended China’s technology self-sufficiency drive and controls on data flows across borders. “Innovation should serve as an engine for, not an obstacle to, collaborative development,” Li stated, pushing back against U.S. efforts to limit exports of advanced semiconductors and other technologies to China.

Li called for strengthened international cooperation on technology, especially in emerging areas like artificial intelligence. However, he declined to address growing complaints from foreign firms about intellectual property violations in China or forced tech transfers as a condition for market access.

On the issue of Taiwan, Li merely reiterated China’s longstanding position that the self-governing island is an inalienable part of its territory and that China “reserves the option of taking all measures” to realize unification. This came just hours after U.S. Secretary of State Antony Blinken voiced “strong support” for Taiwan while meeting Ukraine’s President Vlodymyr Zelenskyy in Davos.

Climate cooperation flagged but tensions loom large

Premier Li’s address highlighted global warming as an area where China is willing to do more despite deteriorations in political relations with Western governments. Li touted China’s progress toward carbon neutrality by 2060, its planned CO2 emissions peak by 2030, and willingness to support developing countries with green transitions.

However, an undercurrent of distrust runs deep on both sides. China has adamantly opposed Western sanctions and export controls tied to human rights issues in Xinjiang and erosion of Hong Kong’s autonomy. Meanwhile, foreign reception toward China has chilled considerably after widespread skepticism over its transparency on key issues like COVID data and origins.

Impacts of rising China-Western tensions

Area Possible impacts
Technology Reduced R&D collaboration, parallel tech spheres emerge
Investment Companies hesitate on new China projects amid policy uncertainty
Supply chains Regionalization trends accelerate, trade growth plateaus
Geopolitics More assertive Chinese territorial claims, military buildups

Thus while Li’s conciliatory tone was welcomed, concrete actions count more than words on the global stage. With swelling strategic rivalry alongside economic interdependence, rebuilding trust between China and other major players may depend less on goodwill than verifiable progress around shared interests.

Premier caps European tour with visit to EU headquarters

Prior to his appearances at Davos, Premier Li visited top EU officials at union headquarters in Brussels on Monday. While Li portrayed China as a supporter of multilateralism and common development, European Commission President Ursula von der Leyen pressed him on trade barriers and human rights concerns.

The visit resulted in tentative agreements to cooperate more closely on COVID vaccine access and fighting climate change. However, both sides stuck to their positions on issues like Taiwan and the authoritarian crackdown in Hong Kong.

Li travels next to Ireland where he will meet political leaders and Chinese executives with European operations. His multi-nation tour is seen as an effort to stabilize China’s relations with key trading partners and investors at a time of domestic economic uncertainty.

What comes next?

In the wake of Premier Li’s Davos visit, expect subdued optimism rather than radical shifts in global postures toward China. Developed economies will cautiously welcome renewed vows of economic liberalization but remain wary of signs that China is charting its own course as a technology power.

Areas to monitor include new foreign access to China’s market, signs of IP reform, and any easing up on tech companies like Huawei targeted by U.S. sanctions. While political tensions with the West may persist or worsen, steps by Li to expand two-way trade and investment would help counter a narrative of China “decoupling” from the global economy.

Domestically, Li faces no easy task ensuring stability this year as China moves past its rigid zero-COVID era toward an uncertain new normal. Markets will be watching closely whether his administration follows through on economic promises made in Davos and offers greater policy transparency. China’s relations with the wider world stand to improve with progress on that front regardless of lingering political disagreements.

AiBot

AiBot

Author

AiBot scans breaking news and distills multiple news articles into a concise, easy-to-understand summary which reads just like a news story, saving users time while keeping them well-informed.

To err is human, but AI does it too. Whilst factual data is used in the production of these articles, the content is written entirely by AI. Double check any facts you intend to rely on with another source.

By AiBot

AiBot scans breaking news and distills multiple news articles into a concise, easy-to-understand summary which reads just like a news story, saving users time while keeping them well-informed.

Related Post