Summer Davos kicks off in Tianjin, in rejection of ‘decoupling,’ ‘de-risk’ noise

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By Chu Daye, Liu Yang and Zhang Han in Tianjin (Global Times) 09:33, June 28, 2023

Dignitaries, delegates and entrepreneurs lambasted decoupling attempts at the 14th Annual Meeting of the New Champions (AMNC), also known as the Summer Davos Forum, in North China's Tianjin Municipality on Tuesday, at a critical time against the backdrop of haunting recession risks, and when the global economic recovery and growth need dialogue and cooperation more than ever.

The strong growth of the Chinese economy will continue to provide impetus to global economic recovery with growth for the second quarter expected to register faster growth rate than in the January-March quarter, according to Chinese Premier Li Qiang, who delivered a keynote speech at the opening ceremony at the forum.

De-risking and reducing interdependence is a false proposition as the global economy has already become intertwined. The so-called risk should not be the judgment of a government or an organization, but concerned companies and participants of production, Premier Li said, calling on the international community to firmly oppose the politicization of economic and trade issues and jointly maintain the stability and unimpeded flow of global industrial and supply chains.

The Premier made an analogy with the recent Dragon Boat festival in China, reiterating that now it is the time for the world to pull together and row the boat.

'Decoupling' lambasted

Highlighting the AMNC on Tuesday is a session titled "Braving the Headwinds: Rewiring Growth Amid Fragility," attended by Barbados' Prime Minister Mia Amor Mottley, Vietnamese Prime Minister Pham Minh Chinh, New Zealand Prime Minister Chris Hipkins and Director General of the WTO Ngozi Okonjo-Iweala, during which the notion of decoupling was lambasted.

Okonjo-Iweala told the panel that if two trading blocks were decoupled, it will cause the global GDP to shrink by 5 percent in the longer term, with developing countries being the biggest victims with double-digit loss. "So decoupling or fragmentation is something that the world simply cannot afford to have," Okonjo-Iweala noted.

"We are seeing decoupling issues and this is not going to address global challenges," Vietnamese Prime Minister Pham Minh Chinh said. No one country can solve these issues alone, he said

The strong rejection of decoupling has raised resonance among the 1,500 elites from business, government, civil society, international organizations and academia attending the event.

"Premier Li Qiang's remarks were inspiring. I very much appreciate it as final kind of remarks on battling together. This is in essence what we should all be doing, just get in the same boat and get to work," Meirav Oren, the CEO and Co-Founder at Versatile of US, told the Global Times on Tuesday on the sidelines of the forum.

Oren noted that nourishing innovation and making sure that people understand each other and creating the bridges to fix fragmentation are what the world need today.

Chinese observers following the Davos forum said it is high time for China to warn the world about the danger of "de-risking" rhetoric as it is both deceptive and essentially government intervention to market forces.

Li Yong, a senior research fellow at the China Association of International Trade, told the Global Times on Tuesday that by borrowing this corporate term,some Western politicians are trying to realize the effect of decoupling under the disguise of de-risking.

The risks talked by politicians and the risks talked by the business community are entirely different things, Li said, adding that companies know how to control business risks and does not need government's hand in it.

China driving global growth

At the forum, attention was also paid to the driving role of the Chinese economy, with role of the world's second largest economy and its potential positive spillover effect highlighted as the world is grappling with tremendous challenges, including the global health crisis, inflation and economic recession, "decoupling" attempts by some countries and food and energy crises each taking its tolls on global growth.

Global trade growth has slowed down to 1.7 to 2 percent in recent years, from around 6 percent before the pandemic, while the IMF warned a decoupling will slash global economic growth by as much as 7 percent, plunging the world into recession.

Founder and Executive Chairman of the World Economic Forum Klaus Schwab said amid the challenges, China's above 5 percent growth target for 2023 is both "ambitious and encouraging."

During the past three years, China maintained an average annual growth of 4.5 percent, 2.5 percentage points higher than the global average, ranking leading position among major world economies, Premier Li said.

China will continue to provide strong dynamism to the world's economic recovery and growth, the premier said.