Premier Li Qiang called China an “anchor for world peace” while expressing optimism about the recovery in the world’s second-biggest economy in a keynote speech at a forum that included business and government leaders from around the globe.
(Bloomberg) — Premier Li Qiang called China an “anchor for world peace” while expressing optimism about the recovery in the world’s second-biggest economy in a keynote speech at a forum that included business and government leaders from around the globe.
China’s economy recovered further in March and the country will continue to open up its market to global investors, Li said, in his first major public speech after he took over the premiership earlier this month. China will be a source of certainty amid growing risks facing the global economy and markets, he added.
Government officials and business leaders are meeting this week on the tropical island of Hainan for the conference, with discussions on topics ranging from supply chain disruption to the post-Covid economic recovery to clean energy and geopolitical tensions. Billed as an Asian version of the World Economic Forum, the conference kicked off Tuesday and is slated to run through Friday.
What to Watch:
- There will be panels Thursday afternoon discussing various subjects from ESG investment to the next generation of Internet and energy revolution
Latest developments: (Time-stamps are local time in Boao, Hainan)
IMF Chief Urges Faster Debt Restructuring (11:00 a.m.)
The world urgently needs faster and more efficient processes for restructuring debts of vulnerable countries, the International Monetary Fund’s chief said on a visit to China, a nation that many fellow fund members including the US accuse of blocking advances.
Speaking at the Boao Forum on Thursday, Kristalina Georgieva underlined the importance of “countries in a relatively stronger position helping the vulnerable members of our global community.”
The IMF forecasts China’s GDP growth will accelerate to 5.2% this year, one of the fastest expansion rates in the world. At the same time, 60% of low-income countries are at or near a debt crisis, many owing billions of dollars to Beijing, as faster inflation, higher US interest rates and a stronger dollar increase their borrowing costs.
Spain Says Globalization Changing, Not Reversing (11 a.m.)
Spanish Prime Minister Pedro Sanchez said he doesn’t see the world de-globalizing, but instead sees changes to it that could benefit the world in the long run.
Globalization no longer means that businesses just search for the lowest production cost to determine where to locate production facilities, Sanchez said in a keynote speech at the Boao Forum for Asia on Thursday. Safety, environmental impacts and reliability have gained relevance instead, he said.
“What is happening is a change in the way globalization is conceived and articulated,” he said. “It is a positive sign. In fact it will contribute to more resilient, efficient and sustainable supply chains.”
Key Takeaways from Li Qiang’s Boao Forum Speech (10:57 a.m.)
The premier said China’s economy improved in March compared with January and February, and described consumer prices as stable. China will continue to prevent major risks and avoid systemic financial risk. That comment comes after bank failures in the US and the forced merger of Credit Suisse and UBS, but also amid concerns about China’s developers.
Li called China a responsible player in geopolitics and an advocate of peace, in an allusion to the country’s efforts to push for an end to the war in Ukraine. He repeatedly warned of global uncertainties and risks, and argued China will be a source of certainty to the world. He spoke in support of the Belt and Road funding initiative.
Singapore Urges US and China to Stabilize Ties (10:40 a.m.)
Singapore Prime Minister Lee Hsien Loong urged the US and China to stabilize ties between one another and warned that any clash between the super powers would have “grievous consequences for themselves and the world.”
“We hope that China and the United States will succeed in stabilizing their relationship and establishing mutual trust and respect to cooperate in areas where their interests are aligned,” he said during the Boao forum in Hainan on Thursday. “The world feels the impact of these tensions keenly.”
Like most Southeast Asian nations, Singapore has tried to navigate the middle path between the US and China; a role that has become increasingly difficult as the two powers tussle on everything from semiconductors to Taiwan. While those countries rely on Beijing as a major economic partner, they also depend on the US as a security partner at a time China continued to grow its military prowess.
“Economic imperatives are being overshadowed by national security concerns,” Lee said. “Countries are pursuing self reliance and resilience by onshoring, or friend-shoring, their supply chains. The bifurcation in technological and economic systems is deepening and this will impose a huge economic cost on countries as well as further exacerbate rivalries.”
The speech comes during Lee’s first trip to China since the pandemic with the scheduled itinerary including a meeting with President Xi Jinping in Beijing, while he’s also scheduled to meet other high-profile figures of Communist Party. Malaysian Prime Minister Anwar Ibrahim also spoke at the forum.
Li Calls China ‘Anchor for World Peace’ (10:49 a.m.)
Premier Li Qiang called China an “anchor for world peace” while expressing optimism about the recovery in the world’s second-biggest economy in a keynote speech at a forum that included business and government leaders from around the globe.
“Chaos and conflicts must not happen in Asia, otherwise the future of Asia would be lost,” Li said Thursday at the Boao Forum for Asia amid tensions between China and the US over issues including trade, technology and Taiwan. He also urged nations to “firmly safeguard the hard won peaceful environment.”
“In this uncertain world, the certainty China offers is an anchor for world peace and development,” he said. “This is the case in the past and will remain so in the future.”
From Wednesday:
Premier Says Confident of Achieving Full-Year Goals (6:43 p.m.)
China will enhance macro-policy adjustments and focus on releasing consumption and investment potential, Premier Li Qiang told IMF Managing Director Kristalina Georgieva in a meeting in Boao Wednesday, according to a report by China National Radio.
China’s economy has shown a trend of stabilization and has rebounded so far this year, the state media cited Li as saying.
Li also said China is willing to deepen cooperation with the IMF and reiterated the country’s commitment to widening the opening of its economy to the world, according to the report.
MIIT Official Urges More Room for Digital Economy Businesses (5 p.m.)
Regulators should be discreet and tolerant in dealing with early-stage digital economy issues, and anything not forbidden by the law should be allowed, Wang Jiangping, deputy minister of China’s Ministry of Industry and Information Technology, said in a panel at the Boao Forum.
Wang also said laws and regulations should catch up with the technologies, and a stable, fair and predictable business environment is now required for the country.
Oil and Gas Giant Voices Energy Transition Challenges (3:45 p.m.)
China National Petroleum Corp., China’s largest oil and gas producer, faces challenges for energy transition as it seeks to secure the nation’s energy supply while also trying to meet the requirements of low-carbon development, President Hou Qijun said at the Boao Forum.
“It’s easy for a small boat for make a u-turn, but it’s quite difficult for a large one,” Hou said, noting CNPC accounts for 52% of China’s crude oil production and nearly 70% of its natural gas output.
CNPC aims to develop more renewable businesses in the long term, including hydrogen, and aims to have renewables make up one third of its overall operation by 2035, Hou said.
Liquidity Management a Top Task for Central Banks (2:48 p.m.)
Managing liquidity should be a top priority for central bankers, a Chinese foreign exchange regulator said, arguing that interest rate adjustments may not be a timely tool to tackle “volatile” financial problems.
“We’re in an era of high volatility,” said Lu Lei, a deputy head of China’s State Administration of Foreign Exchange. “It’s worth thinking whether it’s still suitable to use interest rate hikes of 25 or 50 basis points to respond to changes that happen every day or even every minute.”
Open market operations, however, are “constant” and can adjust liquidity based on the changing market situation, he said. Monetary authorities should provide cash support if overall liquidity is being exhausted and starts affecting smaller financial institutions, he said.
PBOC Pushes for Green Financing (11:40 a.m.)
The People’s Bank of China’s relending programs have incentivized banks to allocate more loans toward green projects, Governor Yi Gang said.
The relending programs provide cheaper funding to banks and at the same time promotes information disclosure by lenders, Yi said on a panel at the Boao Forum.
One of the PBOC’s relending programs — focused on promoting green technology — has provided funding of 300 billion yuan ($44 billion) to banks, resulting in 600 billion yuan of commercial bank loans to corporates, Yi said. China’s outstanding green loans have now reached 2 trillion yuan, he said.
The PBOC is seeking to make bank disclosures of climate-related information compulsory eventually, Deputy Governor Xuan Changneng said on the panel. Disclosures are currently voluntary.
Speaking after the panel, Yi said the PBOC will increase support for private companies and step up financial aid for smaller firms.
Former Chinese Official Decries ‘Picking Sides’ (11:30 a.m.)
Using language frequently cited by Chinese leaders, including Xi Jinping, former Vice Premier Zeng Peiyan said peace and stability is of crucial significance to Asia and that countries around the region should ditch a Cold War mentality and “avoid picking sides and forming blocs.”
“Some countries are constantly fanning the flames and advocating for decoupling and engaging in Cold War-style confrontations that have had a serious impact on the world order and the interests of various countries,” Zeng said. He urged nations to “jointly maintain regional peace and stability by resisting such selective formation of teams and avoiding ‘small groups and circles’ type of confrontation. While Zeng didn’t specifically name the US, the criticisms he raised are similar to ones Beijing has made against Washington in the past.
NDRC Sees Slowing Growth, Persistent Inflation (10:46 a.m.)
China is facing a more challenging global economic environment as growth slows and countries like the US struggle to contain inflation, a senior official at the nation’s economic planning agency said.
Global growth lacks momentum and downward pressure is rising, Zhao Chenxin, vice chairman of the National Development and Reform Commission, said at the Boao Forum. It’s very uncertain whether the US and Europe can curb inflation, he added. The global financial system’s fragility is increasing, and the Silicon Valley Bank crisis will need to be monitored, said Zhao.
Trina Urges to Lower Trade Hurdles (10:45 a.m.)
Trade barriers in countries including the US and India are raising the cost of clean energy, according to the head of a top Chinese solar company.
Clean energy equipment should be manufactured in places where the cost is the lowest, and they should be traded around the globe without any barriers, Gao Jifan, chairman of Trina Solar Co., said in a panel at the Boao Forum.
“We should build a mechanism that make everybody feel safe, instead of building barriers,” Gao said.
China dominates global solar panel manufacturing. But a growing number of countries including the US and India are trying to build competing domestic sectors as climate targets and pricey fossil fuels cause demand for clean energy to surge.
However, Gao said, given some foreign governments’ supporting policies for clean energy, such as the US’s Inflation Reduction Act, Trina Solar is willing to build manufacturing capacities in those countries as well.
Green Hydrogen to Get Cheap Enough Soon (10:40 a.m.)
The cost of producing hydrogen from renewable energy, or green hydrogen, will become cheap enough to compete with the clean fuel produced from coal or natural gas within three years, Zhou Fugui, chairman of wind turbine maker Sany Renewable Energy, said at a panel at the Boao Forum.
The cost of producing hydrogen from renewable sources is almost double the price using coal, and over half of hydrogen was produced from the dirty fossil fuel in China as of 2020.
China’s Exposure to the US Banking Crisis Limited (10:40 a.m.)
China’s exposure to the US banking crisis is still limited, former World Bank chief economist Justin Lin said, noting low external debt and capital controls that have regulated cross-border flows. China’s solid growth potential means it will be a source of stability for the world economy if the banking crisis worsens, Lin said.
During a discussion about artificial intelligence and tools like OpenAI’s ChatGPT, Lin said it was important to embrace new technologies even though the improvement in productivity will come with challenges.
–With assistance from Li Liu, Jing Jin and Kelly Li.
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