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WASHINGTON — China brought a large delegation to this year’s World Economic Forum in Davos to try to convince the world that the globe’s second-largest economy is still open for business and a reliable place to invest. But analysts say Premier Li Qiang’s speech on Tuesday was short on specifics that might have reassured investors.

Li led a delegation of 140 people to this week’s five-day meeting of global political and business leaders. China brought as many as 10 ministerial-level officials related to China’s economic affairs, according to the U.S. news website Politico. Li is the highest-ranking Chinese leader to attend the annual meeting since 2017, reflecting the importance Beijing attaches to it.

Anna Ashton, director of China corporate affairs and U.S.-China at Eurasia Group, a New York-based global political risk consulting firm, told VOA in an email that China’s attention to the meeting “underscores 1) Beijing’s continued interest in shaping global economic relations and development efforts, and 2) the importance Beijing places on reviving its international trade and investment relationships.”

In his speech, Li assured investors and politicians that China’s economy has “huge potential” and remains an “important engine” of global growth despite the serious economic headwinds the country has seen over the past year.

Signs of trouble

China’s economy has been struggling to recover post-pandemic with the property market tanking, high youth unemployment and a drop last year in exports for the first time since 2016.

In the third quarter of last year, China recorded its first quarterly foreign direct investment deficit of $11.8 billion, the first time that has happened since records began in 1998. That means divestments and business downsizing were $11.8 billion greater than new investment, according to Bloomberg.

China’s official gross domestic product growth for 2023 was 5.2%, meeting its target of around 5% but lower than analysts’ expectations and one of its lowest annual growth rates in decades.

Despite the challenges, Li on Tuesday said that the economy’s long-term positive trend would not change, and that China would continue to contribute to world economic development. He also promised China would stay committed to its fundamental policy of opening its door wider to the world.

Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics, told VOA that Li’s speech was generally positive and showed that he hoped to eliminate outsiders’ negative views of China’s economy.

But he added that Li’s speech did not list any specific measures Beijing would take that would attract Western companies, doing little to alleviate their concerns about where China’s economy is headed.

“I think the business community, especially firms that have big operations in China, would have the mood of ‘show me,’ because they can recite all sorts of regulations and restrictions that hamper their ability to do business, take their intellectual property, and make it really not such a friendly environment,” he said.

“So this speech did not have anything that I would call ‘concrete measures’ that would really appeal to the business community. So they will be more skeptical.”

Reasons for concern

Some trade groups say there is a shift away from investment in China’s economy in response to tightened political controls, including raids on firms and exit bans on foreign executives.

A November survey by the Conference Board, a U.S.-based nonprofit business membership and research group, showed that CEOs of multinational companies with operations in China are quickly losing confidence in that country.

The survey’s confidence index dropped to 54 on a scale of 0-100 from a record high of 72 in April. Forty percent of CEOs surveyed also expected capital investments in China to decrease, and almost as many expected to lay off employees in the next six months, compared with 9% in the first half of last year.

Japan’s Chamber of Commerce in China on Monday published figures showing 48% of companies surveyed said they did not invest in China or reduced their investment in 2023 compared with a year earlier.

According to Reuters news agency, Li said at a luncheon after his speech Tuesday, “We will take active steps to address reasonable concerns of the global business community.”

Just as Li was telling the world that China’s door would only open wider, China’s President Xi Jinping was sending a different message that emphasized the primacy of the Chinese Communist Party.

In a speech on January 16, Xi reiterated that China should advance economic development with “Chinese characteristics” that is different from Western financial models, adhering to the party’s centralized and unified leadership over economic work.

Eurasia Group’s Ashton said business thrives on predictability.

“The significance of Li’s words will be best assessed in the follow-through,” she said. “China’s own actions have and will continue to factor into the turbulent geopolitical atmosphere that Li described. Divergent priorities, interests and convictions cannot just be wished away, and cooperating effectively to address them is easier said than done.”

Just days before its annual meeting in Davos, Switzerland, the World Economic Forum released a survey of economists showing that none of them anticipate anything more than moderate expansion in China’s economy this year.
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The health of the economy often plays a big role in how Americans vote in general elections, including for the next president. This year, there are early signs that other issues are equally important to people as they prepare to cast their ballots in November. VOA’s Veronica Balderas Iglesias has the story from Washington.
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Abuja, Nigeria — Human rights group Amnesty International and other advocacy groups raised concerns Tuesday over British oil giant Shell’s sale of its onshore businesses in Nigeria.

Shell announced Tuesday it had concluded plans to sell the assets for $2.4 billion, but Amnesty said authorities should ensure the company addresses decades’ worth of oil spills before closing the deal.

In a post on the social media site X, Amnesty said, “Shell should not be allowed to wash its hands of the problems and leave.”

The international rights group called on Nigerian authorities to request a full assessment of existing pollution from Shell and the state of its infrastructure before allowing them to transfer ownership.

After nearly a century in Nigeria, Shell said it plans to sell its assets to a consortium of mainly local companies. The sales require the approval of Nigerian authorities.

Aminu Hayatu, a conflict researcher at Amnesty International, said the organization has been concerned about environmental degradation in the Niger Delta area.

“Activities of multinational organizations have for quite some time deteriorated that environment, Hayatu said. “Amnesty International is set to really observe the emergence of the new company as well as the leaving of the old ones and the exchanges between government and those companies in terms of their operations in those areas.”

Shell said that it will continue to operate less-challenging offshore businesses and that the new owner, Renaissance, will assume responsibility for the onshore assets.

For decades Shell has struggled with oil spills, vandalism, theft and sabotage in the troubled Niger Delta region, leading to lawsuits against the company.

Faith Nwadishi, founder of the Center for Transparency Advocacy, said, “One of the reasons why Shell is running away is because communities are becoming wiser, more knowledgeable, going to sue Shell in their home country and getting favorable judgment for the community. They’re just leaving their liabilities and responsibilities behind for the people who are going to take it up.”

Shell’s exit from onshore business in Nigeria follows other Western energy companies seeking more viable and profitable operations.

The company said its staff will be retained by the new leadership.

But Nwadishi says concerns remain.

“Anybody that is taking over … now should know that they’re taking over their liabilities,” she said. “These negotiations, did they take into consideration all of those liabilities for cleanup? Did it take into consideration loss and damages to the community? The terms of the negotiation or agreement should actually be made public.”

It’s not clear how Nigerian authorities will respond.
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Although India’s economy is growing at a fast rate, it is still not creating enough employment for its massive young population. The government is wooing global manufacturers to generate more jobs, but opportunities are not keeping pace with demand. As Anjana Pasricha reports from New Delhi, the challenge of finding good jobs is greatest for young college graduates. VOA footage by Darshan Singh.
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The world is on course to see its first trillionaire by the end of the decade, according to a report by Oxfam. The charity is warning of a big increase in global inequality, fueled by growing corporate power – as hundreds of world leaders and chief executives head to the Swiss ski resort of Davos for this year’s meeting of the World Economic Forum. Henry Ridgwell reports
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Washington — Artificial intelligence poses risks to job security around the world but also offers a “tremendous opportunity” to boost flagging productivity levels and fuel global growth, the IMF chief told AFP.

AI will affect 60% of jobs in advanced economies, the International Monetary Fund’s managing director, Kristalina Georgieva, said in an interview in Washington, shortly before departing for the annual World Economic Forum in Davos, Switzerland.

With AI expected to have less effect in developing countries, around “4o% of jobs globally are likely to be impacted,” she said, citing a new IMF report.

“And the more you have higher skilled jobs, the higher the impact,” she added.

However, the IMF report published Sunday evening notes that only half of the jobs impacted by AI will be negatively affected; the rest may actually benefit from enhanced productivity gains due to AI. 

“Your job may disappear altogether – not good – or artificial intelligence may enhance your job, so you actually will be more productive and your income level may go up,” Georgieva said. 

Uneven effects

The IMF report predicted that, while labor markets in emerging markets and developing economies will see a smaller initial impact from AI, they are also less likely to benefit from the enhanced productivity that will arise through its integration in the workplace.   

“We must focus on helping low income countries in particular to move faster to be able to catch the opportunities that artificial intelligence will present,” Georgieva told AFP.  

“So artificial intelligence, yes, a little scary. But it is also a tremendous opportunity for everyone,” she said. 

The IMF is due to publish updated economic forecasts later this month which will show the global economy is broadly on track to meet its previous forecasts, she said.  

It is “poised for a soft landing,” she said, adding that “monetary policy is doing a good job, inflation is going down, but the job is not quite done.”

“So we are in this trickiest place of not easing too fast or too slow,” she said.

The global economy could use an AI-related productivity boost, as the IMF predicts it will continue growing at historically muted levels over the medium term. 

“God, how much we need it,” Georgieva said. “Unless we figure out a way to unlock productivity, we as the world are not for a great story.” 

‘Tough’ year ahead

Georgieva said 2024 is likely to be “a very tough year” for fiscal policy worldwide, as countries look to tackle debt burdens accumulated during the Covid-19 pandemic, and rebuild depleted buffers.

Billions of people are also due to go to the polls this year, putting additional pressure on governments to either raise spending or cut taxes to win popular support.  

“About 80 countries are going to have elections, and we know what happens with pressure on spending during election cycles,” she added. 

The concern at the IMF, Georgieva said, is that governments around the world spend big this year and undermine the hard-won progress they have made in the fight against high inflation.

“If monetary policy tightens and fiscal policy expands, going against the objective of bringing inflation down, we might be for a longer ride,” she added. 

Concentrating on the job

Georgieva, whose five-year term at the IMF’s helm is set to end this year, refused to be drawn on whether she intends to run for a second stint leading the international financial institution.  

“I have a job to do right now and my concentration is on doing that job,” she said. 

“It has been a tremendous privilege to be the head of the IMF during a very turbulent time, and I can tell you I’m quite proud of how the institution coped,” she continued. 

“But let me do what is in front of me right now.
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Frankfurt — The German economy shrank slightly in 2023, official data showed Monday, as costly energy, high interest rates and cooling foreign demand took their toll on Europe’s export giant.

Output contracted by 0.3 percent year-on-year, federal statistics agency Destatis said in preliminary figures.

“Overall economic development faltered in Germany in 2023 in an environment that continues to be marked by multiple crises,” the agency’s Ruth Brand told a Berlin press conference.

Europe’s largest economy likely saw a 0.3-percent drop in gross domestic output in the final quarter of the year, the agency calculated, again in preliminary figures.

It also revised the data for the third quarter from a 0.1-percent contraction to a stagnation, meaning Germany avoided a year-end technical recession of two successive quarters of negative growth.

The German economy has faced severe headwinds since Russia’s war in Ukraine sent inflation, particularly the cost of energy, soaring.

The price spikes contributed to a steep downturn in Germany’s energy-hungry manufacturing sector, while the construction sector also took a hit.

Increasing competition from China, once a reliable destination for “made in Germany” goods, as well as aggressive eurozone rate hikes to tame inflation further added to Germany’s woes.

The limp economic performance was widely expected, with the International Monetary Fund predicting that Germany would be the only major advanced economy not to grow in 2023.

If confirmed in the final figures, the 2023 contraction makes it Germany’s weakest year since the coronavirus pandemic battered the economy in 2020. 

“Despite recent price declines, prices remained high at all stages in the economic process and put a damper on economic growth” in 2023, said Brand.  

“Unfavorable financing conditions due to rising interest rates and weaker domestic and foreign demand also took their toll.”

Uncertain outlook

A modest recovery is expected to get under way in 2024, with Germany’s Bundesbank central bank recently forecasting growth of 0.4 percent.

“We see a silver lining for the economy in 2024,” said KfW chief economist Fritzi Koehler-Geib.

“Thanks to strong real wage growth, private consumption in particular is likely to pick up again. Together with an expected recovery in export demand, gross domestic product is likely to grow,” she added.

But ING bank economist Carsten Brzeski was less optimistic, pointing to fresh uncertainty stemming from the German government’s recent budget upset and shipping delays in the Suez Canal as a result of conflict in the Middle East.

“Looking ahead, at least in the first months of 2024, many of the recent drags on growth will still be around and will, in some cases, have an even stronger impact than in 2023,” Brzeski said.

He predicted that gross domestic product would shrink again this year, in what would “be the first time since the early 2000s that Germany has gone through a two-year recession, even though it could prove to be a shallow one.”

Concerns about slowing exports and the slump in the crucial manufacturing sector, coupled with a chronic shortage of skilled labourers, have begun to raise fears of a “deindustrialisation” in Germany.

Chancellor Olaf Scholz’s government, whose popularity has been sliding in the polls, has sought to counter those concerns with pledges to invest heavily in the transition to green energy and in modernising infrastructure. 

But a shock court ruling at the end of last year blew a multi-billion-euro hole in the government’s budget, upending its spending plans and leaving Scholz and his coalition partners scrambling to find savings.

Anger over Berlin’s proposal to cut some subsidies for agriculture prompted farmers to stage tractor blockades across the country last week, culminating in a major demonstration in Berlin on Monday.
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