The View From Davos

From the World Economic Forum Annual Meeting, 2020

The View From Davos is a daily newsletter featuring insight from our Senior Advisors, Partners and Directors at The World Economic Forum Annual Meeting 2020. 

Tim Payne, Head of Asia

When you come back to Davos for a third time, some things are easier, some things are different, some stay the same. The layout makes more sense, there is a lot less snow this year. And it is still relevant to write about US-China tension.

One week after signing a US China trade deal, in a day where we were sandwiched between Donald Trump and Han Zheng, Brunswick published an advanced extract of our latest ‘China Going Global’ research. The Chinese Executive Vice Premier said the only way to counter risk in the world was to foster an inclusive and open world economy. Sitting in front of Greta Thunberg and definitely standing in front of a teleprompter, President Trump said “...we must resist the perennial prophets of doom...”

Yet the focus of our pre-released research is on the widening gap between emerging market and developed market perceptions of China. 84% of people across our emerging market sample expressed a favorable opinion of China, compared with 58% in developed markets. Emerging economies have a positive view of Chinese diplomacy, economic and trade policy and even its position on human rights. They see more economic benefits from China than from the US or other countries. They see them as technological leaders and that they will become more so in future. For those in America who want to isolate China, the hard truth is that China has now built an incredible depth of support across a wide range of countries.

 

Mei Yan, Chair of China

Earlier today, I spoke at a Caixin-hosted session on “China and Global Tech ‘Co-opetition’” and participated in a debate with on whether Washington and Beijing will drift back towards cooperation, or head into heightened competition. The discussion was framed by two distinct and opposite outcomes - inevitable decoupling versus cooperation, an essential for a well-functioning global governance system. The current forces pushing towards decoupling are truly worrisome, leading to further rivalry and a system divided between China and the U.S. Such an outcome benefits neither country nor the world.

Right now, my view is that events will unfold somewhere in between and will be increasingly complex. As shown in the latest survey findings from our ‘China Going Global’ report 2020, views about China are not unified across the world. This perception gap has implications for how China’s growing economic, political and technological influence is viewed overseas. Many Chinese companies are still not telling their narrative clearly. The lack of information about Chinese business creates a void that is often filled by other people, whose own narratives may be influenced by misperceptions or misunderstanding. There’s a growing demand for Chinese business to tell its own story, rather than respond defensively once negative perceptions have already been formed. Communications can be an effective channel to bridge perception gaps, bringing people, companies and countries closer together.

 

Nik Deogun, CEO of the Americas and Senior Partner

On Mr. Trump’s last visit to Davos, he addressed concerns that his “America First” strategy would sink the global economy by clarifying that America First didn’t mean “America Alone.” This year, US executives want reassurance that there will be plenty of daylight between his populism and the potential policies of some Democratic Party candidates who favor more aggressive corporate limits. Politics aside, CEOs are facing increasing pressure from employees and shareholders to tackle WEF-priority items such as climate change and sustainability.

While the President focused his attention at Davos on the successes of trade deals and the US economy, with the slightest of nods towards WEF priorities and a cleaner environment, CEOs worldwide must address evolving expectations. Public corporations are in many ways more vulnerable to public accountability than ever before, and if they don’t pursue meaningful change on those issues, they risk a backlash from some key stakeholders. And unlike elected officials, CEOs can’t rely on an entrenched political base.

 

Rob Pinker, Chair, Emerging Markets

At the heart of the Emerging Market debate sits the strategic competition between the US and China for influence in these markets - with tech and industrial policies centre stage; but if you are looking on from afar thinking it is one-way traffic, think again. The so-called emerging economies are here in Davos in force, bringing together leaders from business, the public sector and civil society to grab their share of voice.

The cream of the crop from India’s burgeoning tech sector is here mixing it up with the Valley. The fast-growing economies from Africa are making their presence felt as well as those from the Middle East and North Africa, where growth and economic diversification sits hand-in-hand with the political and social volatility that characterises some of its biggest economies.

In May 2019 the much-anticipated African Continental Free Trade Agreement came into force, starting the long and ambitious process of creating one of the world’s biggest free trade areas. Davos is also set to build on to the UK-Africa Investment Summit discussions in London earlier this week, which looked to address the challenges of inequality and how best to build inclusive economies on the continent.

Davos is a global gathering. Whichever part of the agenda you look at, the power and future potential of the emerging markets makes them key ingredients in the pursuit of finding sustainable answers.

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