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China on track for more growth, Vice-President Wang Qishan tells worried world elite in Davos as he rebukes US ‘bullying’

Chinese Vice-President Wang Qishan sought to reassure the world’s business and political elite about China’s economy at the World Economic Forum, while also warning other countries against dominating future technologies and making what appeared to be a thinly veiled criticism of the Trump administration’s “bullying” tactics.

Addressing the World Economic Forum in the Swiss ski resort of Davos on Wednesday, Wang said China’s economic growth rate – which last year was 6.6 per cent, the lowest since 1990 – was “not low at all”.

“One thing that is certain is that China’s growth will continue and be sustainable,” he said, after an introduction by Klaus Schwab, the forum’s executive chairman.

“There are all sorts of views, some are saying that China is approaching the end of its growth or we have already reached the end of our growth. If you ask us, we believe that we have not reached the end, we are actually pursuing more sustainable growth.”

Wang also warned against protectionism and unilateralism, apparently referring to US President Donald Trump’s “America-first” policies aimed at China.

“Many countries are increasingly looking inward when making policies; barriers to international trade and investment are increasing; and unilateralism, protectionism and populism are spreading in the world. All these are posing serious challenges to the international order. Will economic globalisation move forward or reverse course?” he said.

China’s plan is to expand economic opportunities and not waste time on endless rhetoric, he said.

“What we need to do is make the pie bigger while looking for ways to share it in a more equitable way,” he said. “The last thing we should do is to stop making the pie and just engage in a futile debate on how to divide it.”

Wang also said the international community must allow China the “right to take part in the global technological governance system as equals”.

Trump’s administration has made China’s industrial modernisation strategy, “Made in China 2025”, a major target in his assault on the country’s trade practices, including the imposition of punitive tariffs on items covered by the project.

“It is imperative to respect national sovereignty and refrain from pursuing technological hegemony, interfering in other countries’ domestic affairs, and conducting, shielding or protecting technology-enabled activities that undermine other countries’ national security,” he said.

He added: “We reject the practices of the strong bullying the weak and self-claimed supremacy.”

When asked by Schwab on China’s slowing growth, Wang said 6.6 per cent growth was a significant achievement and that instead of pursuing breakneck growth, China would focus on refining its economic structure, its quality of growth and its efficiency.

“With a 6.6 per cent growth, we can definitely reach our target of delivering ‘modest prosperity’ for all Chinese people by 2020,” he said. “There is no question about it. We can definitely make it.”

He also sidestepped a question on China’s debt problem, saying China has the means to resolve such risks.

When asked about the potential for a new global economic crisis, Wang said it was necessary to “prepare for a worst-case scenario”.

“[But] I don’t think a crisis – any crisis – is big enough to crush humanity,” he said. “Actually, it’s an opportunity, we test our vision and wisdom and ability, so firstly I do not agree with the view that there’s bound to be a crisis, but we do live in an uncertain world, so crises are likely.”

Scott Kennedy, a China expert at the Centre for Strategic and International Studies, told the South China Morning Post that Wang’s speech was surprising because it reflected the central government’s official policy to adopt reforms at its own pace.

“That’s not what people expected from Wang Qishan, who is a straight talker,” said Kennedy, CSIS’s director of Project on Chinese Business and Political Economy.

He added that if China is to cooperate with the US, it will likely try to avoid looking like it is making major concessions. “But behind closed doors, [they’re] trying to address practical issues,” he added. “These negotiations are going to go to the very end.”

Wang is one of about 3,000 people attending the forum, which ends on Friday. Other prominent attendees are German Chancellor Angela Merkel, Japanese Prime Minister Shinzo Abe, and Brazil’s newly elected President Jair Bolsonaro.

But among the notable absentees are Trump, French President Emmanuel Macron and British Prime Minister Theresa May.

Wang’s address comes ahead of Chinese Vice-Premier Liu He’s visit to Washington next week for two days of talks with US Trade Representative Robert Lighthizer.

The high-stakes meetings on January 30 and 31 are expected to build on working-level trade negotiations in Beijing earlier this month.

The two countries are in the middle of a 90-day tariff ceasefire but if they cannot reach a deal by March 1, the US could increase duties on US$200 billion in Chinese goods from 10 per cent to 25 per cent.

Hours earlier at the Davos forum, US Secretary of State Mike Pompeo warned of the threat of “China’s state-centered economic model, its belligerence towards its neighbours, and its embrace of a totalitarian state at home”.

“We’re rebalancing the relationship with China, alongside partner nations in Asia and all around the world,” he said, addressing the forum via a video link. “There are those who say that conflict, superpower conflict between our two countries is inevitable – we don’t see it that way. We want to find places where we can work together.”

Pompeo also said he was optimistic that the trade talks would have a positive outcome, but there was “lots of hard work to do”.

Among the main issues were the trade imbalance between the two countries, intellectual property theft, reciprocal market access, and forced technology transfers, he said.

“Those aren’t fair arrangements, they’re not reciprocal agreements – they’re not the way free and fair trade ought to be conducted, so I’m hopeful that each of those issues can be dealt with constructively,” Pompeo said.

Wang said he also was optimistic about China-US relations and the global economy.

“Since he [Pompeo] is an optimist, then possibly I am even more of an optimist than he is,” Wang said.

Also at the forum, Fang Xinghai, vice-chairman of the China Securities Regulatory Commission, played down worries about the state of China’s economy.

“China is slowing down but it’s not going to be a disaster,” he said in a Davos panel discussion. “If there is any risk accumulated in the system, the government will step in and order the risk to be reduced.”

As well as offering public assurances, the Chinese delegation has also privately addressed concerns about China’s slowing growth and state-backed policies to secure support from business leaders ahead of the Washington talks.

Xiao Yaqing, chairman of the State-owned Assets Supervision and Administration Commission – a body that oversees more than 100 state-owned enterprises – held a private dinner in Davos with chief executives from more than 20 global companies, including HSBC, Standard Chartered, Morgan Stanley and Siemens, two attendees told Bloomberg.
Source: South China Morning Post

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