Skies were unusually clear in the Chinese city of Tianjin this week as the World Economic Forum’s annual summer event took place. But there were two grey clouds: politics and the economy. Worries over both were hard to miss. Like China itself, there was a distinct feeling that the self-styled Asian gathering of the global elite had lost some of its sparkle.
When China’s answer to Switzerland’s Davos forum was conceived five years ago, the Chinese economic miracle was at its peak. Foreign businesses sought out new growth opportunities outside Beijing and Shanghai. Chinese officials and companies seized the platform to get a bigger voice in the world. Premier Wen Jiabao’s address was a major draw – and still is.
Politically, the tone was cautious. Wen’s last public speech in front of a global audience before he retires early next year avoided the hot-button global issues such as China’s relationship with its Asian neighbours and Washington. Wen didn’t lament the lack of reforms, as he has in the past. Instead, he delivered a defensive summary of his own track record as premier.
One senior British business leader complained that China’s government officials and state-owned firms were under-represented. And no wonder: China is in a political hiatus, with a new generation of leaders expected to be named in a month. Current officials have become old hat. A recurring topic of chatter was the whereabouts of Xi Jinping, China’s likely next president who has not been seen in public for two weeks.
Businesses worried openly about a weaker economy. Solar-panel maker Trina Solar was one which warned it may have to cut jobs to reduce costs. Sessions focused on the macro-economy were well-attended, with everyone trying to figure out whether this is a structural shift or a bump on the road. The China Davos go-to topics like innovation and developing human capital took a back seat – even though those are precisely what China needs most.
Finance, meanwhile, was over-represented – a sign of too much money chasing after too few good opportunities. Senior bankers and private equity dealmakers were more visible than entrepreneurs, and amid a sharp slowdown in capital markets activity, a cocktail party by China’s telecom equipment maker Huawei, a company China bankers dream of taking public, became one of the most talked about events.
Then there’s the location. Tianjin’s government put on a good show. Hundreds of young female drummers in short red uniforms greeted guests at the city’s glitzy culture centre. In addition to a sumptuous international buffet and Chinese arts demonstration, guests were also treated to a musical fountain performance imported from Las Vegas in the artificial lake. A famous Chinese Buddhist monk warned guests that “wealth” isn’t the same as “money”.
That’s a lesson worth heeding. New infrastructure has helped Tianjin to claim China’s highest GDP per capita. But digging a little deeper, the breath-taking economic growth has left other things behind. The architecture of the grand new art museum was impressive, but the collection of paintings inside wasn’t. Where nearby Beijing bustles, Tianjin’s outskirts have fields of empty skyscrapers. Most foreign visitors have little reason to stay when Davos ends.
The future could be brighter, if China secures a smooth political transition, and reforms follow. The forum could find new excitement by moving to newer, more up-and-coming cities – Xi Jinping’s home province of Shaanxi could be a possibility. But for the forum, for Tianjin and for China itself, the challenge is to avoid becoming merely middling.