Themed “Leadership 4.0: Succeeding in a New Era of Globalization”, the 2019 Summer Davos was held from 1-3 July in Dalian, China and attracted more than 2,000 global business, political and civic leaders. As a participant, I attended the main forum and several sub-forums. Here, I’d like to share my key takeaways from the event.
- One of the highlights of this year’s 2019 Summer Davos was the full coverage of 5G signals for the first time in the forum and the surrounding area. Biometric mirrors, digital simulations and future hospital displays all represented the trends of tech-driven society in the future of China. China’s economic development is increasingly relying on technology-driven and artificial intelligence.
- A key critical issue for the Greater Bay Area (GBA), still a key focus amongst attending guests at the 2019 Summer Davos, is how to connect Shenzhen as an innovation center and Hong Kong as an international financial center. With the opening of capital markets and cross-border finance in the future, realizing the smooth cross-border flow of data while retaining its transparency and reliability is a major challenge.
- Sustainability has become a key word of China’s economic development in recent years. We’re seeing an increasing number of Chinese companies applying the green and sustainable principle into business operations, including the control of supply chains as well as a focus on social welfare.
The trend of globalization is irreversible
Earlier this year, in the context of the world undergoing unprecedented changes, “Globalization 4.0” was proposed for the first time at Winter Davos in Switzerland. Six months later, “Leadership 4.0” focuses more on the right way of addressing globalisation under this new era – cooperation. Specifically, how to build a more technology-oriented, more sustainable and inclusive system of cooperation.
Despite limited optimism from attending guests at the forum on whether China and the U.S. can reach a trade agreement soon, it was general consensus that cooperation is an unstoppable trend for the world economy, especially when the major global economic players are facing downward pressures. Chinese Premier, Li Keqiang, emphasized in his speech that globalisation is irreversible and the pace of China’s integration into the world economy will not be shaken.
China will continue to reform and open up to the world
Premier Li Keqiang also stressed that China will push forward key reforms that will help open it up to the world. At present, the restrictions on China’s manufacturing industry have been lifted, and China will continue to expand the opening up of its financial industry, including the wider access of credit rating services, and to promote the two-way opening of the bond market.
It was reported that Morgan Stanley is likely to get regulatory approval for owning a majority stake in its Chinese securities joint venture in the second half of this year. It’s foreseeable that as China continues reforms and with the expansion of China’s financial market, it will undoubtedly attract more global capital into the Chinese market. China’s economy is transforming from high-speed growth to high-quality development – seizing the opportunities brought by this transformation is extremely important for global companies.
China’s economic prospects were still widely valued by the attending guests. Kevin Sneader, the global managing partner at McKinsey, said at the forum, “The world needs China to a greater extent than China needs the world. China remains the largest growth opportunity for the world.”
Tech innovation creates new development opportunities
One of the highlights of this year’s 2019 Summer Davos was the full coverage of 5G signals for the first time in the forum and the surrounding area. Biometric mirrors, digital simulations and future hospital displays all represented the trends of tech-driven society in the future of China. China’s economic development is increasingly relying on technology-driven and artificial intelligence.
Specific to the financial industry, an obvious trend is that many traditional Chinese financial institutions are investing increasingly into Fintech. Since 2018, Minsheng Bank, Industrial Bank, China Merchants Bank, China Construction Bank, Industrial and Commercial Bank of China, and Bank of China have all established Fintech subsidiaries.
The Vice President of China Construction Bank presented its Fintech strategy at a sub-forum highlighting that by establishing an independent fintech subsidiary, the bank is able to maximize its new generation system to support the real economy and play a significant role in inclusive finance.
China has become one of the countries with the highest adoption rate of Fintech in the world. Chinese tech companies such as Ant Financial and Tencent have played a critical role in fostering China’s Fintech market, especially mobile and third-party payments. What’s even more controversial is that Facebook issued its digital currency Libra recently, although there is a fierce debate at the forum about Libra’s role in the future, it is also fair to say that the innovation created by tech companies is driving the traditional financial sector to move forward at a faster pace. The increasing investment that traditional financial institutions put into Fintech will impact or even change the development in many aspects including data, technology, and regulation.
Greater Bay Area: cross-border flow of data becomes a challenge
The Guangdong, Hong Kong and Macau Greater Bay Area (GBA) was not as hot as last year at the forum. This is partly related to the lack of specific official blueprint surrounding the development of the GBA. However, as another national strategy planned and proposed by President Xi Jinping, the GBA was still a key focus amongst attending guests.
As one of the most promising economic regions in China, a key critical issue for the GBA is how to connect Shenzhen as an innovation center and Hong Kong as an international financial center. Under the framework of “one country, two systems”, Hong Kong and mainland China are in different monetary regulatory systems, legal systems and customs zones. With the opening of capital markets and cross-border finance in the future, realizing the smooth cross-border flow of data while retaining its transparency and reliability is a major challenge.
Green principles and sustainable development
President Xi Jinping stressed, at the second “Belt and Road” International Cooperation Forum in April, the promotion of green infrastructure construction, green investment and green finance. Zhao Yingmin, deputy director of the Ministry of Ecology and Environment of China, also said at the Summer Davos forum that “to achieve green sustainable development and to make the ‘Belt and Road’ a path of green development has always been the intention and commitment of the Chinese government.” The vice chairman of the China Development Research Foundation, Liu Shijin, pointed out at a sub-forum that it will make it harder for a company to obtain a loan if its business is not eco-friendly.
Needless to say, sustainability has become a key word of China’s economic development in recent years. We’re seeing an increasing number of Chinese companies applying the green and sustainable principle into business operations, including the control of supply chains as well as a focus on social welfare. There is no doubt that this will help Chinese companies attract more global capital and further integrate into the global market.
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