This week's Asia Briefing comes from Chengdu, in the western Chinese province of Sichuan, which is hosting the three-day Fortune Global Forum of business leaders, government officials, chief executives from the world's top 500 firms and media from around the world.
It’s the 12th Fortune Global Forum and the first hosted by a western Chinese city, following Shanghai, Hong Kong and Beijing.
Chengdu is a rising economic engine in China’s “West Development Strategy”. Last year, Sichuan ranked in the top 10 in terms of foreign direct investment utilisation.
Among the speakers were vice premier Zhang Gaoli, who said China was committed to speeding up economic reform and developing domestic consumption.
“We will do our very best to improve people’s livelihood through development, make every effort to increase household income, deepen reform of income distribution system, readjust the relationship of income distribution and gradually achieve common prosperity,” said Mr Zhang.
China will import $10 trillion (€7.55 trillion) worth of goods globally in the next five years and invest $500 billion (€377.55 trillion) abroad, while Chinese tourists are expected to make 400 million trips overseas, Mr Zhang told the forum.
Other corporate heavyweights attending this year's forum were executives from multinational companies such as Coca Cola, DuPont, JPMorgan Chase, Amway and Dell. Muhtar Kent, chairman and CEO of the Coca-Cola Company, said China was a great market that was evolving at an incredible pace.
“You need to continue to innovate, and you need to continue to ensure that you can stay ahead of those trends around the world, whether it be in Africa or Latin America, or right here in China,” he said.
Organisers have even lifted internet restrictions on Facebook and Twitter for the duration of the forum at the Shangri-La Hotel in downtown Chengdu.
Former US treasury secretary and former Goldman Sachs chief executive Hank Paulson pointed out the need for reform if China is to keep expanding.
“What hits me right smack between the eyes is the same thing the Chinese government knows,” he said. “The current growth model is running out of gas. They’re going to need to reinvigorate reform, it’s clear,” said Paulson.
“The good news is that expectations are high. The bad news is that it will be almost impossible to meet those expectations. They’re strong leaders. They’re going to need to be very strong.”
Despite a slowdown, China's growth trend is encouraging and the transformation of its economic structure will create significant opportunities for the world, said economist Stephen Roach.
“There is too much focus on the overall rate of GDP growth,” he said.
China’s GDP grew 7.7 per cent year on year in the first quarter, feeding fears that the economy is losing momentum. But Roach said there were positive signs including the growth of the service sector.
“I am encouraged that this is the right path for China. China does not need to go back to 10 per cent GDP growth. In fact, that would worry me,” he said.
By the end of 2015, the growth rate will likely slow to about 7 per cent, which will actually benefit China, he added.
Roach said China’s consumption and service sector as a portion of GDP are still far below those of other major economies, creating a large opportunity for the country’s major trade partners.
