China's
clout dominates minds on first day of Davos forum
AP
Photo/Anja Niedringhaus
Founder
and Executive Chairman, World Economic Forum, Klaus Schwab, right,
and Vice-Chairman, National Development and Reform Commission,
People's Republic of China, Zhang Xiaoqiang sign a memorandum
of understanding for the opening of the World Economic Forum in
Davos, Switzerland, Wednesday Jan. 25, 2006.
By
Kevin
McElderry
AFP
DAVOS,
Switzerland
Petroleumworld.com 01 26 06
China's growing clout dominated the opening day Wednesday of the
annual Davos forum, where political and business power-brokers
fretted over the global economy and heard Germany's Angela Merkel
plead for a freer hand.
On the day China became the world's fourth biggest economy after
reporting near double-digit growth last year, the World Economic
Forum began its five-day networking bonanza with a stress on Asia's
emerging markets.
"The market economy has taken root," declared Vice Premier
Zeng Peiyan of China. "The next few years are a window of
important opportunities."
Zeng pledged to double per capita income by 2010, and he and other
Chinese officials at Davos said their next five-year economic
plan would put a greater emphasis on social progress and tackling
rural poverty.
The Davos gathering is more than just a business talking-shop
-- it is also a chance for politicians to schmooze behind the
scenes, and this year's line-up includes UN chief Kofi Annan and
dozens of presidents, premiers and ministers.
There is a sprinkling of celebrity stardust too with rock star
and activist Bono and actress and UN goodwill ambassador Angelina
Jolie down on the list as well as football legend Pele.
"It's a unique cast," boasted founder and chief executive
Klaus Schwab.
But for Wednesday, business took centre stage with the top-name
executives here keen to exploit -- and tap into -- the pace of
change, notably China and India.
Banker Jakob Frenkel described it as a "fundamental change
in the centre of gravity" for the world economy.
Frenkel, of American International Group, added: "You do
not need to be a nuclear scientist to ask where the growth will
continue in the future."
At the same time, a straw poll of participants revealed acute
concern about the environmental impact of China and India's growth.
Pointing to the increasingly competitive world market, Merkel
argued for a loosening of the shackles hindering economic restructuring.
"We must believe that our country can live better from its
ideas," she said in remarks which reprised many of the themes
she used in her successful drive toward the chancellery last year.
"We have no choice," Merkel said. "We have to make
sure the political world intervenes at the right points and withdraws
when it's appropriate."
Another key theme of the first day was concern over the US economy
and its excessive current account deficit.
"This is the year to watch out carefully for the end of the
great American spending binge," warned Stephen Roach, chief
economist with the US bank Morgan Stanley.
"What's occurring right now in markets and in policy circles
is a dangerous degree of complacency. And out of complacency usually
comes the surprise that ends up doing the most damage to markets
and economies."
Worries over energy supplies also loom large. A survey of 50,000
people by Gallup showed rising oil prices and the demand on natural
resources as posing the biggest risk to the global economy.
Oil prices spiked to nearly 70 dollars per barrel earlier this
week, while disputes between Russia, Europe's biggest natural
gas supplier, and neighbours Ukraine and Georgia raised questons
over its reliability as a provider.
Other major international issues to be thrashed out at Davos include
Iran, the Middle East, regional security and the future of the
European Union.
Mohamed ElBaradei, head of the UN's nuclear watchdog, will lead
a debate on the threat of a nuclear strike, against a background
of Western demands for UN intervention over Iran's atomic programme.
The foreign ministers of Britain, France and Germany, who have
been taking the lead in negotiations with Tehran, will meet up
here.
Pakistani President Pervez Musharraf is also lined up as a keynote
speaker, while the prime ministers of Iraq and Turkey will appear
in debates and former US president Bill Clinton has also agreed
to come.
AFP
01 25 06
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© 2006 AFP. All rights reserved
