Some optimism during gloomy mood of Davos 2009

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Chinese Premier Wen Jiabao as optimistically predicted his country’s growth in 2009. Image credit: worldeconomicforum at Flickr under a Creative Commons license.
I've seen quite a few stories this week about the World Economic Forum, which is entering its last two days in Davos, Switzerland. Not surprisingly, accounts coming out of the annual meeting have reflected the gloomy state of a global economy in the midst of financial crisis. Seems the event's past reputation of being a party for wealthy people and celebrities has been replaced with politicians, average government workers and others discussing – as the 2009 event has been dubbed – "Shaping the Post-Crisis World."

A story that stuck out at me came from the New York Times, which quoted Wen Jiabao, the Chinese premier, as optimistically predicting the country’s growth in 2009 at 8 percent. That’s pretty optimistic compared to many other economist predictions – some as low as 4 percent or less for the year.

From the Times article:
Eager to calm concerns that his country's economy would not avoid recession, Mr. Wen struck an unabashedly upbeat tone.

"I can give you a definitive answer," he said. "Yes, it will; we are full of confidence."

Mr. Wen, in a rare appearance by a top Chinese official at Davos, said that the Chinese government had set a goal of 8 percent growth in 2009, which he called "an attainable target through hard work." He reeled off statistics that showed bank lending and investment, after slowing sharply in the fall, picked up in December and January.

"The harsh winter will be gone and spring is around the corner," Mr. Wen said.

Perhaps this is a Chinese leader being overly positive, but David Dollar explains in his last blog post why the latest GDP data from China leaves him feeling optimistic:

"Real retail sales growth was about 17.5% in both November and December. So, the Chinese consumer is a bright spot in an otherwise gloomy global picture. ...

The optimistic scenario is that the economy begins to accelerate from the second quarter on. The stimulus package begins to have significant effects on construction and hence manufacturing."

For a good aggregator of news and social media accounts on the last two days of the World Economic Forum, visit the FriendFeed page dedicated to it here.


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