China has sent its largest-ever delegation to Davos this year, but the 66-member group is dwarfed by delegations of many other countries. While India has sent nearly double that number, the US has sent 700 delegates.
Although the relatively small number has not stopped the Dragon from showcasing its economic miracle, many business leaders and academicians see clouds on the eastern horizon, as Beijing adapts to life as a global power.
Apart from questions about the validity of China’s phenomenal growth statistics and the dissatisfaction over the way the country has managed its currency, there is also a lot of hostility — a fact acknowledged by the Chinese themselves. For example, Gao Xiqing, head of China Investment Corporation, the Chinese sovereign wealth fund that is one of the world’s largest and most important, told a breakfast session organised by The Financial Times and HSBC that he distilled the world into two camps: countries who welcome Beijing’s money and those who don’t. The latter camp, he fears, has expanded, and the former shrunk, since the worst of the financial crisis passed.
“We had problems with barriers as soon as we were born...we were treated like a yo-yo by quite a few major countries,” he said. “They have nothing to fear. Our mandate is not to take control of companies, it is to maximise profit given the risk constraint.”
China is also being openly criticised for allegedly plundering African resources without regard for welfare of workers and society. African Development Bank Chief Economist Mthuli Ncube was quoted as saying there is some truth to these assertions and China should do more to create partnerships with local communities. Ncube added Africa still welcomed investment from China as it does from other sources.
These questions, however, are cold comfort for the Indian delegates in Davos this year. Any discussion on India versus China invariably leads to nervous faces among the Indian delegates.
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Despite the high voltage India Inclusive campaign (you won’t find a single China-invites-you kind of hoardings anywhere in Davos), the Asian giant invariably figures in almost every discussion. And, almost half the 1,200 CEOs of international companies polled by PricewaterhouseCoopers at the WEF said they were confident about China’s growth in the coming 12 months. China topped the poll of business leaders, with 39 per cent voting it the world’s No 1 growth engine, followed by the US with 21 per cent, Brazil 19 per cent and India 18 per cent. Raghuram Rajan, the Indian Prime Minister’s Honorary Economic Advisor, said it was wrong to compare India and China as the situation were vastly different in the two countries.
“There is no comparison,” SBI Chairman O P Bhatt said, as China started its infrastructure rejuvenation 15 years ago. Bhatt also said going forward China would invest at least two times more than India in infrastructure.