China may not have created the same hype about its growing economy as India at the ongoing annual meeting of the World Economic Forum, but in ensuring as many as five sessions devoted to the country in the first two days of the meeting, the Chinese have managed to send out a far more powerful message to the global investing community about their ambitious plans and the new direction of the economy in the next five to ten years.
In a special address, Zeng Peiyan, vice-premier of the People's Republic of China, said his country aimed to double its per capita income to $2000 by 2010, relying on more domestic demand, a more open socialist economy, energy conservation and scientific as well as technological innovation.
Indicating a new direction for the economy, Zeng said China's high savings rate of 40 per cent, a labour force of 800 million people, and considerable natural resources would be used to meet the demand from rising domestic consumption. He also allayed fears that such growth would have a negative impact on global energy prices as 90 per cent of its total energy needs were met from domestic sources.
Endorsing the view in a session on China going global, Zhou Xiachuan, governor of the People's Bank of China, told the participants that the Chinese government had already taken a decision to reduce its investments in fixed assets creation over the next five years, to facilitate growth of private consumption.
Chinese companies were now getting used to the idea of following international disclosure and governance norms as more and more companies were getting listed, he said.
Zhou said there were also plans to reduce the current savings rate of 40 per cent and ensure that domestic consumer demand, instead of exports, sustained the current levels of growth.
This provoked Stephen S Roach, chief economist, Morgan Stanley, to comment that this might be bad news for the US, which depended a lot on Chinese savings. Zhou argued that such developments needed to be accepted as part of the globalisation process.
Zhou's response was partly in response to a comment made earlier by Roach that the challenges for Chinese companies, which had only 12-13 years of capital market experience, included ensuring adequate returns for their shareholders and reducing their dependence on exports by shifting to the domestic market.
Another session held earlier on the emergence of China brought out several more significant pointers to the way the Asian giant would move in the coming years.
For instance, panelists at this session pointed out that further appreciation of the yuan and the implementation of fresh measures to make the currency regime more flexible would be gradual. As far as its foreign investment strategy was concerned, the view was that Chinese companies would continue to invest overseas and seek to acquire global brands.
At present, 16 Chinese companies were listed among the Fortune Global 500 list and the target was to raise this number to 50 by 2010. India has only five companies figuring on the Fortune Global 500 list.