World Looks To China For Growth But It Has Its Own Problems At Home
China sought to expand its influence and clout over a four-day conference this week as it promised world and business leaders that it will keep its doors open even as the world’s second-largest economy undertakes its own market and financial reform.
“China’s door to the world is always open and will become increasingly open with progress,” Chinese Vice-Premier Zhang Gaoli said at the opening of the Boao Forum on Saturday.
He also stated China’s commitment to opening up access to foreign investment and various industries while remaining a force for peace and stability in the world.
People’s Bank of China’s Governor Zhou Xiaochuan meanwhile said globalization is a reality and not a choice for nations.
Zhang and Zhou’s comments come amid concerns about increasing protectionist sentiments among some nations after the U.K.’s Brexit vote and the election of U.S. President Donald Trump.
With China still championing globalization and free trade, leaders around the world are looking toward the East Asian giant for direction, clarity and support, underscoring a shift in global trade and power relations.
This is reflected through its aggressive push in Asia through Europe with its One Belt, One Road project which is presenting new opportunities for countries which may have previously struggled to attract investors and funding.
The landlocked Central Asian country of Kazakhstan is one.
“When the Soviet Union was dissolved in the early 90s, everyone (said) that Kazakhstan would struggle because it does not have access to the ocean, but it turned out that we didn’t need to have an ocean because China was going to be the ocean of Kazakhstan,” said Eurasian Resources Group CEO Benedikt Sobotka on Thursday.
Other developing nations’ leaders from Pakistan to Madagascar also paid homage to China at the event.
Indeed, China made clear its intention to push its influence beyond its familiar sphere.
At the forum’s opening, leaders from countries that are usually under-represented on the world stage such as Madagascar, Micronesia and Nepal addressed the floor, championing globalization and partnership.
While hopeful nations are eyeing the investment and growth that China is bringing to the table, concerns over its domestic economy dominated panels and discussion, underscoring the many challenges that the major but still emerging economy face.
Key issues include high debt levels and financial regulation, as officials took pains to reassure markets about the country’s economy, affirm its commitment to economic and market reforms, while explaining some difficulties it was facing.
On Friday, Vice Finance Minister Liu Wei said China’s debt risks are “very much under control” and that the issue is of “great importance” to the authorities.
At a separate panel, former vice president of the China Academy of Social Sciences Li Yang sought to explain the long-drawn process in restructuring debt-laden state-owned enterprises, which also has social responsibility to tens of millions of employees.
Indeed, Chairman of Boston Consulting Group Hans-Paul Bürkner told CNBC China’s economic reform efforts could lead to a “crazy” situation and needs delicate maneuvering.
Despite concerns, there was a consensus at the forum that international exchanges can only continue to flow in an increasingly open world, although those negatively affected by globalization need to be supported.
“In 20, 30, 40 or 50 years, will we (still) see free exchange of ideas, people and goods? I think the answer is yes. But I suspect we will find ways to address the real discontent and dislocation that some trade activities and technologies cause,” said Peter Tufano, dean of the Said Business School at the University of Oxford.
by Huileng Tan
CNBC’s Geoff Cutmore and Sophia Yan contributed to this report.
This article was originally published on CNBC