In the Swiss town of Davos, day one of the world economic forum saw a keynote speech from Premier Li Keqiang. The Premier’s message to global leaders was loud and clear: Don’t worry about slowing growth in China. World leaders, business leaders, NGOs, and academics are all in the Swiss town for the four day event, to discuss key global issues.
Premier Li Keqiang told delegates at the World Economic Forum that China will avoid an economic hard landing. The speech came a day after China reported its slowest growth in 24 years.
“It must be noted that the moderation of growth speed in China reflects a profound adjustment in the world economy and it is also consistent with the law of economics. More importantly we have made further progress on structural reforms, needless to say the Chinese economy will continue to face substantial downward pressure in 2015,” Li says.
China’s economy has shown signs of rebalancing with higher than expected figures for consumer spending and industrial output.
The forum’s founder Klaus Schwab said that even if China slowed to seven percent growth this year it would still remain the biggest engine of global economic growth.
On the sidelines of the summit Li also met with Ukraine’s President Petro Poroshenko.
A key forum poll identified geopolitical risks like the crisis in Ukraine as the largest threat to global stability over the coming decade, an issue addressed by Li in his keynote address.
“Regional conflicts and geopolitical conflicts must be peacefully resolved through political means,” Li says.
On Jan 22 the focus shifts back to the Eurozone, which is gripped by deflation. Under enormous pressure to add stimulus, the European Central Bank will announce whether it will push ahead with a major round of sovereign bond buying, better known as quantitative easing.
The consensus here is that whatever decision the European Central Bank decides to take on Jan 22, the outcome will be another significant contributing factor to the direction of global economy in 2015.