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But the simple truth is that global warming is not going to be solved by taking more action in Western Europe, where the carbon intensity of economic growth (CO2 emissions per unit of GDP) continues to fall and where total CO2 emissions are already lower today than in any non-COVID year since 1964. Nor is the solution to be found in the United States, where total emissions have been falling for more than twenty years.

Back in our Alpine paradise, we see that Switzerland’s total CO2 emissions in 2021 – the latest available figures - amounted to just 35 million tons (Mt). That’s for a full calendar year. Compare this to China whose emissions last year were 31.5 million tons per day or to India’s 52.1 million tons per week. Switzerland is responsible for less than one-thousandth of the world’s total CO2 emissions.

Obviously, Switzerland is a small country. But its much bigger neighbour, Germany, produces just 1.8% of global emissions and the UK just 1.6%. It takes China just 3 weeks to emit the same amount of CO2 that Germany does in a full year.

For all its tiny contribution to the planet’s problem, the fact remains that Swiss glaciers are shrinking. Davos delegates saw far less snow than in previous years and many of the lower-lying ski destinations across Europe are currently struggling to stay open. The symptoms of global warming are clearly visible in Switzerland but the root cause is thousands of kilometres away.

The eight largest economies in Asia collectively produce 18.9 billion tons of CO2 per annum. And though China accounts for more than 70% of this, the other seven have greater total emissions than the entire EU-27 group of nations. These Asian countries - driven by rapid economic and population growth - are increasing both their CO2 emissions and the carbon intensity of their output. A just and sustainable energy transition for them is an urgent global priority, delivering for the region’s Industrial Revolution without the environmental damage and pollution suffered in Europe and North America when countries there first grew prosperous.

The benefits of investment in Asia’s energy infrastructure – greening its electricity production, stabilising its transmission grids, and making it more efficient – will be felt not just in that region, but around the world. Global warming is, by definition, a global problem and addressing its primary cause will benefit everyone. Not just the rapidly growing populations in Asia’s South and South-Eastern nations, but coastal atolls, small island states and even, yes, Swiss alpine resorts.

Key to this energy transition is understanding not just why Asia matters in its own right, but why it is so important to the rest of the world. For Europe and North America to offshore vast swathes of manufacturing industry to that continent then to lecture about emissions is not just hypocritical, but ultimately self-defeating in the absence of remedial action. There is only one planet and its weather systems are both complex and interconnected. Asia matters to all of us.

Mobilising capital at pace and at scale to support and accelerate the region’s energy transition is of the utmost urgency. Yes, we can all play our very modest part in Western Europe but diligently recycling our trash and signalling our virtue by driving $70,000 electric cars is really not going to shift the dial on climate change globally.

Instead, we should be investing in real assets that have real and measurable impact. Already, fund managers in Europe have downgraded more than $140bn in so-called ESG and sustainability-branded products which they fear would leave them vulnerable to regulatory sanctions under the EU’s SFDR reporting regime. Downgrading their classifications from Article 9 to 8, or from 8 to 6 is a tacit acknowledgment that financial assets cannot meet the sometimes exaggerated claims of their sponsors. These funds would be better utilised to meet the pressing needs of the real world and to finance a just and fair energy transition.

Energy policy across the Asia region is framed to attract foreign capital to fund the development of sustainable infrastructure assets. With the public and private sectors working together, long-term contracts, the rule of law, rapid economic growth and sheer demand pressure make this the decade of Asian investment opportunity. For international investors, financing Asia’s energy future has never looked like a more attractive proposition.

The World Economic Forum reports that a significant group of countries has pledged to by 2030, “end poverty, protect the planet and ensure that all people enjoy peace and prosperity.” That sounds like a tall order and admittedly, you have to be a bit of an optimist to imagine that those goals will be reached by that fast-approaching date. But even the more pessimistic (or ‘realist’ if you prefer) of those among us shouldn't throw in the towel. Some huge opportunities on the horizon have more than a little potential to significantly push the planet towards greater eco-sustainability, while at the same time providing more than enough profit for companies and investors – profits, which hopefully will then be further invested into developing ever more ideas and tech to create a virtuous cycle. Investments in biomanufacturing are building upon established bioscience, and startups are pushing all sorts of new low carbon solutions that are often proving to be both viable and cost-effective. These include sustainable manufacturing processes in biochemicals and fuels, biopharmaceuticals, and of course, foods.

Cow in mountainsThe largest sector that may turn out to be a literal cash cow could be all things vegan. The vegan food world is turbocharging. People used to roll their eyes when a product would be described as “vegan meat,” but that's not the case anymore as even top celebrity chefs are reporting that new high-tech iterations of so-called ‘alternative meat’ – some of which is printed with a 3D printer – are game-changers that have so closely imitated the textures and tastes of meat that some may not be able to tell the difference. If a vegan kebab looks, tastes, smells, and even cooks like an ordinary kebab… is it not a kebab? The answer for most people appears to be yes. The list of companies rolling out ‘vegan’ editions of their products grows by the day. Tesla, Polestar, BMW, and Ford, for example, are just a few of numerous carmakers offering ‘vegan’ options. Porsche has a 100% vegan interior option for one model, and the floor of the vehicle is made from recycled fishing nets. Nearly half of the plastic found floating around our oceans is old fishing nets, so the idea is almost a perfect definition of win-win. Porsche also says that the new vegan interior produces 80% less CO2 than a leather version. Aside from luxury cars, there are big developments in vegan lifestyle products such as luxury handbags. Hermès now has a faux leather handbag made out of a type of fungus, while Nike is using ‘pineapple leather’ that's 100% sustainable and provides Filipino pineapple farmers with additional sources of revenue. Vegan, biofriendly, chemical-free cosmetics are also racing forward and promise to become sources of major revenue for both old and new manufacturers.

Many nations around the world are investing heavily in the journey to ‘net zero.’ China, long an example of some of the worst practices in polluting manufacturing, is fast on its way to becoming a leader in the new sustainable economy. Expect some incredible breakthroughs from China over the next five years in energy production and carbon capture as the Middle Kingdom has put in the work and looks set to soon reap the benefits. And yes, it must be acknowledged that it's easier to enact changes in a non-democratic one-party state, but China is at least moving in the right direction. The other big area to look out for is not a new idea and goes back to the idea of microfinancing and credit unions or community development banks with specific missions of serving lower or middle-income communities, and helping lift them out of poverty or the so-called ‘middle-income trap.’ Charging a tiny amount of interest on tiny loans might not sound like a money maker but when scaled, for example, India and China together having perhaps close to a billion people who might sign up – the numbers add up. 

According to the 2020 Report on US Sustainable and Impact Investing Trends, by the Forum for Sustainable and Responsible Investment or US-SIF, “as of year-end 2019, one out of every three dollars under professional management in the United States—$17.1 trillion—was managed according to sustainable investing strategies.” That's impressive but still has much room for growth. As the US-SIF also notes, “A number of studies have found that investors do not have to pay more to align their investments with their values, or to avoid companies with poor environmental, social or governance practices.” Whether jumping on the vegan trend, investing in biotech or putting money into sustainable investment funds, there is capital to be made from making the world a better place, as cliché as that term may be. There's no reason why your dollars can't make you more dollars while also aiding in sustainability and eco goals. 

The World Economic Forum recently launched its Global Platform for Geostrategic Collaboration to bring together leading policy research institutions (think tanks) to engage the global public on geostrategic challenges in a multipolar world.

The platform aims to fill the urgent need for leaders and experts to understand the world through the eyes of their counterparts in other regions and find better ways to strengthen cooperation.

Within this mission, the forum’s platform will bring together insurers, tech firms and governments together to find ways to tackle risks from new technology such as drones and driverless cars.

Mark Boulton, Insurance Sector Lead at Fujitsu UK & Ireland, had this to say:

“The impact that technology has on our life goes far beyond convenience and speed. With new capabilities come a whole new range of responsibilities, and it is time insurers rethink their approach towards new products, such as drones and driverless cars, and the risks they bring to the table. Assigning liability becomes more and more of a grey area as complex technologies emerge, blurring the lines between the decision-maker and the enabler.

“It is therefore paramount insurers understand these changes are transformational for the entire industry, and old rules cannot be applied to these emerging risks. The way we collect and share data, and the impact of IoT for instance has the potential to revolutionise the industry. It can also offer a great opportunity to scale up to those insurance providers who will seize the moment.

“This represents an important state of change. We will need to learn to co-exist with machines, and both the risk factor and future changes will have to accommodate this. Incorporating new technologies such as driverless cars will not happen overnight – a carefully thought out set of rules of integration needs to be in place. Of course, this will add risk and insurance complexity.

“Ultimately, new technologies represent a business change for the better; revolutionising not only the way in which an insurance organisation company works but the services they can provide to customers by embracing a future in a digital world.”

World Economic Forum 2015H.M. King Abdullah II Ibn Al Hussein of the Hashemite Kingdom of Jordan opened the World Economic Forum on the Middle East and North Africa, reaffirming his commitment to reform and investment to achieve regional prosperity and peace.

“It is time for a new push, engaging all sectors, to create inclusive growth,” he said. “Our goal is to relaunch growth and investment while deepening reform and inclusion.” He added that measures are being strengthened to support start-ups, business expansion and market-ready skills, and new public-private partnerships are supporting industry, innovation and the most important source of job growth − entrepreneurship and the private sector.

While acknowledging the crises facing the Middle East and North Africa, the king said that countries should not be sidetracked by regional turmoil. “The violence that threatens so many in our region is part of a global assault on peace, law, democracy and coexistence. Defeating this demands a comprehensive, global approach built with security, diplomacy, development and moral leadership.”

He said that despite the challenges Jordan faces, the country has been able to grow at more than 3% last year and is expected to grow at close to 4% in 2015. He added that the nation has the potential to be a gateway for regional and world trade, business and innovation.

Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, said that given the forces that are reshaping the region, the gathering in Jordan is a critical platform for dialogue to catalyse economic and social progress. “The meeting should not be dominated by a bleak picture, but we should focus on the opportunities in the region.”

The World Economic Forum on the Middle East and North Africa is taking place at the Dead Sea in Jordan on 21-23 May.

CubaFlagSenior Cuban officials told participants at the 10th World Economic Forum on Latin America that the government is eager to receive foreign investment, and has taken measures to make Cuba an attractive investment destination. The meeting was a historic one for the country, which has recently initiated diplomatic relations with the US after half a century.

The Forum took place in Riviera Maya, Mexico from 6th – 8th May 2015. Main topics on the agenda were financial resilience, vigorous economic growth and poverty alleviation.

The Forum was also the first time Cuban officials have addressed foreign investors at a World Economic Forum meeting. The country’s delegation noted that Cuba has put in place transparent, stable regulatory framework for foreign businesses, with agriculture and biotechnology key sectors for future investment.

“Mexico is a strong supporter of the modernisation efforts under way in Cuba,” said José Antonio Meade Kuribreña, Secretary of Foreign Affairs of Mexico. Mexican businesses, building on the long-standing friendship between the two countries, are leading the way in investing in Cuba. A trip last year of 68 Mexican business leaders to Cuba has already resulted in 50 investment projects.

Cuba is especially interested in attracting investment in agriculture, since the country currently spends heavily on food imports. Even though all land belongs to the state, private investors can acquire 99-year leases and own everything built on and produced by the land. In other sectors, such as biotechnology, healthcare and tourism, Cuba has competitive advantages that should attract investment, Rivas said.

Lina Pedraza Rodríguez, Minister of Finance and Prices of Cuba, said that the country urgently needs to modernise its economy so as to protect the achievements of the Cuban Revolution. For that it requires foreign investment, including from the United States. “Cuba is open to investment from the United States. It has never been closed.” She said that her government has achieved a stabilisation of macroeconomic indicators, is engaged in productive negotiations with its foreign creditors, and is moving to eliminate its dual currency system. The state will maintain its leading role in the economy, but private and foreign companies can operate with their property rights secure.

WEF East AsiaThe milestone launching of the ASEAN Economic Community (AEC) gives South-East Asian nations the opportunity to take the region to the next level of development, though there are significant challenges ahead, according to the Co-Chairs of the 24th World Economic Forum on East Asia, held in Jakarta, Indonesia, April 19-21, 2015.

The AEC creates a single regional common market of Asean countries with a free flow of goods, services, investment capital and skilled labour.

“There is an eagerness to make this work and put all the elements in action to move forward, have a level playing field, a much bigger market and grow the pie significantly in the next few years,” said Hans-Paul Bürkner, Chairman of The Boston Consulting Group.

The theme of the World Economic Forum on East Asia 2015 was “Anchoring Trust in East Asia’s New Realism”. Building trust among all stakeholders and in institutions will be crucial if ASEAN is to succeed in reaping the full benefits of regional integration.

“People have lost trust in the ability of markets and business to create wealth and to fairly allocate opportunities,” observed John Riady, Executive Director of the Lippo Group in Indonesia. “So it is important for business to reflect on its role and the role that it can play in society. But this is important not only for business. No matter who we are – whether in government, education, media or NGO – this is an important time to reflect on stewardship, how we can be better stewards of what we have been given, and how we can rethink what we are doing and better structure our institutions to reflect the realities of our world.”

Teresita Sy-Coson, Vice-Chairperson of SM Investments Corporation in the Philippines, said that the discussions at WEF East Asia had highlighted the major challenges ahead for labour mobility. “There is now an understanding of the importance of the freer movement of human capital,” she said.

William Lacy Swing, Director-General of the International Organisation for Migration (IOM) in Geneva, agreed: “It is quite clear that, with the very exciting regional integration going on here, human mobility will be increased and expedited as a result. We have to look at it as both a challenge and opportunity. Migration is not a problem to solve; it is a reality to be managed.”

Germany’s Chancellor, Angela Merkel, talking at the 2015 World Economic Forum Annual Meeting.

Germany’s Chancellor, Angela Merkel, talking at the 2015 World Economic Forum Annual Meeting.

Germany’s Chancellor, Angela Merkel, called for urgent fiscal reform in Europe at a special session at yesterday’s World Economic Forum Annual Meeting. Whatever the decision of the European Central Bank (ECB) on quantitative easing, she said that European leaders must not be diverted from continuing with meaningful structural reforms.

“Time is of the essence,” she said. “Every day we delay is a lost day. We need to promote growth and create long-term jobs.”

Europe has an opportunity to emerge stronger out of the crisis, the Chancellor said. While acknowledging progress by countries such as Italy, Spain and France, she stressed that Europe is not out of the woods yet. “The European single market needs to become less regulated and more open.”

The growth-austerity argument is a false dichotomy, she added. “Germany has shown that growth-oriented fiscal policy is possible,” she said. Pointing to internal demographic challenges, Merkel emphasized the need to manage debt levels to ensure that onerous burdens are not passed on to the next generation as six million German workers enter retirement age.

Merkel called on other European leaders to begin fiscal consolidation. She pointed to historic low interest rates and questioned how countries with large fiscal deficits will fare if rates rise. “Now is the time to get our houses in order,” she said.

The Chancellor added that Europe needs to grasp several immediate opportunities. The first is for more open trade via the Transatlantic Free Trade Agreements. The second is for Europe to become a standard-setter globally in digitization

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On Greece, she emphasized that Germany’s actions have always been oriented towards keeping Greece in the Eurozone. “We have to both show solidarity with Greece just as they show readiness to shoulder their responsibilities.”

Merkel concluded by affirming Germany’s position in Europe. “Germany will remain a stable anchor in Europe,” she said.

The BRICS Agenda: Boccanera, Lin, Jaitley, Neri, Kudrin, Ghosn

The BRICS Agenda: Boccanera, Lin, Jaitley, Neri, Kudrin, Ghosn

Ministers, industrialists and academics from the BRICS countries delivered a strong message of long-term potential economic growth for their countries at a panel session at yesterday’s World Economic Forum, in Davos, Switzerland. The message was clear – BRICS nations are ripe for investment, and will continue to be provided their governments successfully implement planned structural reforms.

“We continue to invest in all these countries, because we invest not for the next two or three years, but for the next 10 or 15 years,” said Carlos Ghosn, Chairman and Chief Executive Officer, Renault-Nissan Alliance, France. Ghosn emphasized that despite the adjustments currently taking place in the BRICS countries, they are all capable of strong growth.

Justin Lin, Professor, National School of Development, Peking University, People's Republic of China, said that China would have to depend less on exports and more on domestic consumption and investment, but the government’s strong balance sheet and high private savings will facilitate this transition. “I am confident that China will be able to maintain a 7% growth rate over the next five or even 10 years. China will continue to be an engine of world growth,” Lin said.

Arun Jaitley, Minister of Finance, Corporate Affairs and Information and Broadcasting of India, said India intended to return to an 8%-9% growth rate. Jaitley said the recent change in government has led to clarity about the path forward and a changed mindset, inside and outside the country. “The world is looking at India again,” he said. Lower oil prices are helping India’s current account balance and bringing down inflation, he added at exploresurvey.com/beverage.

“Russia will have to learn how to live with more moderate oil prices,” Alexei Kudrin, Professor and Dean, School of Liberal Arts and Sciences, Saint Petersburg State University, Russian Federation, told participants. Kudrin said lower prices were obliging Russia to make structural reforms and diversify its economy in a way that would benefit the country in the long term.

Marcelo Côrtes Neri, Minister of Strategic Affairs of Brazil, said Brazil is returning to the “middle path” it had originally begun in 2003: a combination of redistributive social programmes and market-friendly economic policy. He added that the country’s recent slow growth has not prevented impressive social achievements. “In Brazil inequality has fallen, and fallen sharply, since 2001,” he said.

South Africa too is taking concrete steps to rebalance its economy while maintaining strong social programmes, Nhlanhla Musa Nene, Minister of Finance of South Africa, said. Nene said the government is working to improve the environment for the private sector, to make the public sector more efficient, and to make the government more accountable to its citizens. Fiscal restraint is needed at present, but “we will continue to develop infrastructure and to protect the poor”.

World Economic Forum 2015: ImpressionEurope needs quantitative easing but that monetary policy alone will not restore growth and jobs to the region, that’s according to a panel debate of business leaders and policy-makers, held at the World Economic Forum in Davos, Switzerland, yesterday.

“We’re all for quantitative easing in Europe, but it’s not enough,” said Lawrence H. Summers, Charles W. Eliot University Professor, Harvard University, USA. Summers said that quantitative easing was likely to be less effective in Europe than it was in the US since Europe already has very low interest rates and European banks are less able to transmit monetary expansion to the wider economy. Summers urged Europe to embark on fiscal stimulus and said that “deflation and secular stagnation are the risks of our time”.

Gary D. Cohn, President and Chief Operating Officer, Goldman Sachs, USA, said that the US economy is strong but weakness elsewhere would make it hard for the Federal Reserve to raise interest rates. He said the dollar’s strength, which could have a chilling effect on the US economy, would also encourage US monetary authorities to keep rates low. “We’re in a currency war. One of the easier ways to stimulate your economy is to weaken your currency,” he said.

Ray Dalio, Chairman and Chief Investment Officer, Bridgewater Associates, USA, said that a weaker currency has to be part of the solution for Europe’s problems, given many European countries’ lack of competitiveness. “Forceful QE and forceful structural reforms, including currency adjustment, are what is needed,” he said. Dalio expressed concern that with interest rates at or near zero, central banks have lost their traditional method for stimulating economies. Fiscal policy now must work together with monetary policy to stimulate growth. “Monetary policy that helps fund deficits, that monetizes the deficits, is a path to consider.”

Dalio added that “Spain has done a wonderful job with structural reforms. It is a model.” He noted that the fastest growth often comes from countries that successfully implement structural reforms, such as China in the recent past.

Christine Lagarde, Managing Director, International Monetary Fund (IMF), Washington DC; World Economic Forum Foundation Board Member, also complimented Spain on its reforms. She said that Europe’s monetary union is still quite young but has nonetheless moved forward quickly. “Massive progress has been made in the last five years. More progress has to be made in terms of fiscal union and banking union.”

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“I am confident that Europe can make it,” added Ana Botín, Chairman, Banco Santander, Spain. She said Europe is now seeing a great deal of foreign investment, including in her own bank’s recent capital rise. Some European countries are successfully implementing structural reforms to increase competitiveness. Automobile factories in Spain are now more productive than those in Germany. “We are making progress,” she said. “It takes time for a region to unify.”

 

Petro Poroshenko, President of Ukraine

Petro Poroshenko, President of Ukraine

President Petro Poroshenko of Ukraine told participants at the World Economic Forum Annual Meeting that despite the aggression his country faces, Ukraine is strong and unified. “Ukraine has become stronger. Ukraine has become more democratic. And Ukraine has become more European,” he said.

In a special session on The Future of Ukraine, held yesterday at the Annual Meeting, Poroshenko said that last year’s presidential and legislative elections were free and fair. He added that these elections showed a highly unified country, while polls indicate that support is stronger than ever for the country’s territorial unity and for integration with the European Union.

Poroshenko said that last year was “the most difficult in our history”, with parts of the country occupied by foreign troops. However, he also saw strong motives for optimism that peace can be achieved. He noted that shelling has fallen dramatically since a December agreement that called for “artillery silence”.

Poroshenko asked for the international community to continue its support of Ukraine, with political solidarity, with economic aid, and with the provision of defensive military technology. “We are not only fighting for our territorial integrity and independence, we are fighting for European values,” he said.

Ukraine is fully committed to economic reform, Poroshenko said. “We want to create a new country, free from corruption, with independent courts and the rule of law. We want to build a new climate for investment.” The country is already cracking down on corruption with a new anti-corruption bureau, and it is reducing bureaucracy. It is working to achieve energy independence from Russia through a mix of conservation, new suppliers and a clear, transparent energy market that will increase domestic shale gas production.

Poroshenko said that in Davos he has received several promises of major investment, as well as many expressions of support for his country. “I am thankful for this support. It is what Ukraine needs,” he said.

Simonetta Sommaruga, President of the Swiss Confederation and Minister of Justice and Police

Simonetta Sommaruga, President of the Swiss Confederation and Minister of Justice and Police

Today’s global context is one of uncertainty, said Simonetta Sommaruga, President of the Swiss Confederation and Minister of Justice and Police, talking at the World Economic Forum Annual Meeting in Davos, Switzerland, yesterday.

“Overall, globalisation has led to greater prosperity and reduced poverty, but that is not the case everywhere,” she said. “It would be a dangerous mistake to ignore the uncertainty felt by many people,” she added.

Ms Sommaruga pointed to the rise of nationalist and populist parties in many countries in Europe that are critical of globalisation, reject immigration and incite scepticism towards the European Union. She called on business people and politicians to accept responsibility and address the uncertainties created by today’s global economy.

“Are we creating an economic environment in which only high performers working under constant pressure can prevail?” she asked. “Competition is growing for the highly developed economies too. In more and more countries, workers are still paid low wages but now offer highly skilled labour.”

This means that even leading economies can remain successful only if they are prepared to continuously make structural changes. “Structural change in itself is not a bad thing, but it produces winners and losers. This is something we cannot accept,” the President said.

Uncertainty has fuelled the rise of nationalist conservative parties in Europe, parties that invoke a nation’s sovereignty and a native country symbolising familiarity and safety. This describes an ideal past that never was, she added.

Sommaruga noted that business leaders have avoided assuming the responsibility for answering questions on the inequitable distribution of the benefits of globalisation for far too long. “We need business people who want to earn money but who also want something more,” she said. “We need business people who want to give others a chance; employers who set benchmarks in terms of profit and of corporate culture. We also need commodities groups that prohibit all forms of forced labour and exploitation, and that recognise the rights of others.”

The President also called on policy-makers to put in place – and enforce – a sound framework based on the rule of law, legal certainty, no corruption and protection of human rights and social justice. “These elements are key to a healthy economic and social order. This requires determination, clear values and steadfastness,” she added. “Nothing has greater value in politics than credibility.”

The Global Impact of China's Economic Transformation: Li KeqiangChina’s economy will not suffer a hard landing even as it braces itself for a further slowdown this year, Li Keqiang, Premier of the People’s Republic of China, told delegates at the World Economic Forum in Davos, Switzerland, yesterday.

“The Chinese economy will face downward pressures in 2015,” Li said in a keynote speech at a special session of the Annual Meeting. “But the Chinese economy will not head for a hard landing.”

He added that the government will press on with structural reforms, which include liberalising its services sectors, promoting mass entrepreneurship and innovation, protecting intellectual property rights and deepening its capital markets. “We will move towards the path of reforms. This way we can shift gear without losing momentum and achieve medium- to high-speed growth, and medium- to high-level developments.”

Using the analogy of a skier at Davos, he promised that China will “go at the right speed, keep balance and be courageous”.

Premier Li’s address came a day after the country announced its slowest growth rate in 24 years, with full-year GDP at 7.4% in 2014. The government has prepared the nation to embrace the “new normal” as it focuses on quality rather than speed of growth, and shifts its focus from an export-investment led model to one that is more reliant on consumption and the services sector.

In his address, Li also suggested that China would eschew stimulus measures through monetary easing but instead step up investments in targeted areas, including health, clean energy and transport, as well as provide support to the country’s small and medium enterprises, create employment for young people and optimise income distribution.

The Premier said China’s economic slowdown reflects the profound adjustments in the global economy and is consistent with its larger economic base. A growth at 7%, he pointed out, produces annual increase of $800 billion (€690 billion) at current prices, larger than a 10% growth five years ago.

On the internationalisation of the renminbi, Li explained that as China’s international trade increases, more countries are demanding the use of the Chinese currency to settle trades and investments. The pool of offshore renminbi has gradually expanded in recent years. Li said China is committed to opening up to the world but the internationalisation of the renminbi is going to be a long-term process.

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