China optimism at Davos confronts fears of tech control


DAVOS, Switzerland — For Klaus Schwab, founding chairman of the World Economic Forum, Chinese Vice Premier Han Zheng’s speech delivered on Tuesday was “reassuring” on where the country was heading.

China will open its door still wider to the world, the Politburo Standing Committee member told the audience. “Despite the protectionist and unilateral moves by some countries, China will not stop pursuing higher-quality opening-up, and will not follow their footsteps to move in the opposite direction of globalization.”

The 81 year-old Schwab — who was one of 10 foreigners awarded by President Xi Jinping in December 2018 for four decades of “outstanding contributions” to the country’s reform and opening-up — seemed content with the resilience shown by the Chinese economy and the continuation of the policy that he was honored for supporting.

In contrast with Schwab’s assessment, doubts and apprehensions toward China were voiced here, in the Swiss village that hosts the world’s elites once a year.

In what is becoming an annual ritual at Davos, another octogenarian, George Soros, during a private dinner on Thursday warned of an emergence of “a new type of authoritarian system and a new type of human being who is willing to surrender his personal autonomy” under Xi.

Last year, the 89-year-old billionaire philanthropist called Xi “the most dangerous opponent of open societies.” This year, Soros stressed the danger of the Chinese leader gaining control over the latest technology, like artificial intelligence deployed “to secure total control over his people.”

His warning reflected developments left out of Han’s remarks. Beijing’s point man for Hong Kong affairs did not mention the ongoing unrest in the city. There were nothing on the Uighurs and other ethnic minorities in Xinjiang held in internment facilities, which Beijing calls re-education centers. Nor did Han talk about the new coronavirus that originated in Wuhan and has spread within China and across its borders.

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Soros pointed to China’s dependence on chip supplies from the U.S. to be a vulnerability to Xi’s ambition “to dominate the 5G market and to fully implement a social credit system that is a threat to open society.”

Cybersecurity experts also voiced concerns. “China is the example to the fact that the world as a whole is unable to reach an agreement on cyber,” said Amos Yadlin, executive director of the Institute for National Security Studies in Tel Aviv. The Israeli, who has over four decades of military service including chief of defense intelligence, added: “China is more interested in stealing” intellectual property.

A sense of wariness came from China’s defenders and Chinese themselves. Nicolas Stern, chairman of Grantham Research Institute on Climate Change and the Environment in London, who counts himself a “friend of China,” raised concern over tensions within Beijing under slowing economic growth.

“China is a place where politics is intense,” Stern said in a panel discussion co-organized by the World Economic Forum and Chinese media group Caixin. 

“As the growth rate slows, then there’s a very big argument internally saying, ‘Do we boost that growth rate?'” he said, noting that traditional economic stimulus puts stress on the environment. The bickering among vested interests could be harsh, as “China’s real economy is real politics.”

On the same panel, Ma Jun, director of the Institute of Public and Environmental Affairs, a Beijing-based nonprofit organization, cut to the core governance issue of justice. In his fights against companies that defy environmental rules, Ma said he felt powerless. “The cost of violation continues to be much lower than the cost of compliance,” he said. “A way to change that in other countries is for the NGOs to go to court, but in China, the judicial system would not function that way.”

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That may be because China is not able to bear the cost of economic deterioration. “The issue is: Can you afford a downturn?” said Zhang Yichen, chairman and CEO of Citic Capital, in a separate session organized by China-based Yicai Media Group.

“In the case of Japan, they can, because of good social harmony….. China cannot afford a deep downturn” due to social problems, the investment company chief said.

Many see Hong Kong as a major risk factor. “For a black swan,” said Carmen Reinhart, professor at Harvard Kennedy School of Government, “I have to bring up Hong Kong.” The economist, known for her study on Chinese overseas lending, sees the situation in the city to be “the big unknown.”

Soros views Hong Kong as “the most successful rebellion so far” around the world. He predicts it will likely succeed as it has “overwhelming support of the population,” but with a “great cost [that] may well destroy the city’s economic prosperity.”

While the Hong Kong issue was discussed at various sessions, there was little if any public talk on Taiwan’s recent free and fair election and its contributions to democracy in Asia.

Jeremy Jurgens, managing director of the World Economic Forum, told the Nikkei Asian Review that there were “number of business representatives that come from Taiwan, [while] on the political front, we follow similar approach to the United Nations — in terms of terminology, approach and so on.” Given efforts to balance different perspectives, “I think we’re comfortable with where we’re at, and we will continue on the same course,” he said.

According to World Economic Forum statistics, four participants came from Taiwan, while 74 came from mainland China, which is equal to the combined number from Association of Southeast Asian Nations members.

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Kenneth Roth, executive director of Human Rights Watch, has a different view. He sees the World Economic Forum as “extraordinarily deferential to the Chinese government” based on his experience taking part at Davos for two decades. A case in point for him was Xi’s speech three years ago, where Schwab lauded Xi for reflecting the spirit of Davos.

Roth said for many people, that spirit includes “liberalism and respect for the individual,” but what Xi has been doing since rising to power in 2012 is “presiding over the most intense period of repression in China since the Tiananmen Square crackdown.”

The veteran human rights activist recalled that “it wasn’t always like that.” In the past, he was “put on panels with leaders, and my role was to challenge them. And they were happy to do that.” Roth is still invited to join panels, “but typically, not with repressive leaders. Repressive leaders are enticed here, with a pass with respect to difficult questions. And that’s unfortunate.”



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