Article content

(Bloomberg) — China’s annual Boao Forum enters its second day, with government officials and corporate executives expected to discuss a range of hot topics from financial cooperation to governance of AI and geopolitical tensions.

Among senior officials and executives joining today’s forum are China’s central bank governor Pan Gongsheng, Hong Kong Monetary Authority’s chief executive Eddie Yue and China’s top climate change negotiator Liu Zhenmin.

Article content

Investors are watching this year’s forum to see what signals Chinese officials send about their economy, investment environment and commitment to opening. After years of strict pandemic curbs and tighter national security controls hurt sentiment and the economic recovery, China is trying to boost the confidence of overseas investors. Foreign businesses’ direct investment into the nation slumped to a 30-year low in 2023, highlighting the challenges facing policymakers.

Article content

Latest developments (time in Boao, Hainan):

China Close to Ending Australia Wine Tariff, Business Chief Says (09:21 a.m.)

The Chinese government is “very close” to lifting the heavy tariffs on Australian wine imports, a business lobby said, while tempering expectations about all producers returning to the market after the sanctions are lifted.

The Australia China Business Council hosted a meeting for business leaders with Chinese Foreign Minister Wang Yi during his visit to Australia this month, where Beijing’s top diplomat emphasized that his country was “opening up” to foreign investment, according to the lobby group’s National President David Olsson.

Olsson, in an interview with Bloomberg on the sidelines of the Boao Forum in China on Wednesday, said while Australian businesses understood the importance of the China market, there were concerns about the need for predictability and certainty, particularly with longer term investments.

“Australian business leaders are under no illusions that we’re going to go back to the good old days, those things have gone past,” he said. “Geopolitical tensions will remain.”

Article content

The following is from Tuesday:

China Grid Giants Seek Solutions for Solar Glut (06:00 p.m.)

While much of the rest of the world tries to build more renewables, China is figuring out how best to make use of an abundance of them.

After record installations of solar and wind power last year, several regions in China have shown strains handling the new surges of electricity that come and go based on weather conditions. The country needs to keep building new power infrastructure and improve policies and market rules to keep such strains from slowing the energy transition, energy and grid officials said in a panel discussion at Boao Forum for Asia in Hainan, China, on Tuesday.

AI Can Help China Tackle Aging Society: Former Finnish PM (04:30 p.m.)

Technology plays an important role in solving human problems, such as the aging society problem China and other countries face, Esko Aho, the former prime minister of Finland said at the Boao Forum Tuesday.

“We look forward to more applications and implementation of artificial intelligence, ultimately helping us solve current social problems,” Aho told a packed conference hall.

Article content

Article content

Technology as a theme features prominently in this year’s forum, with several panels touching specifically on AI, including the risks it entails and how it should be governed globally.

China Optimistic About FDI Stabilizing This Year: FX Regulator (03:50 p.m.)

China is optimistic about foreign direct investment stabilizing this year, State Administration of Foreign Exchange Deputy Administrator Xu Zhibin told Bloomberg News during Boao Forum Tuesday. 

Fluctuations in China’s foreign direct investment are “very normal” and its trend is in line with Asia and the rest of the world, Xu told the forum, adding that SAFE will further improve regulation and looks forward to more coordination and cooperation across Asia.

He noted more than 35,000 small and medium-sized enterprises in China actively used exchange rate hedging tools to manage risks last year.

Asian Economies Have ‘Robust’ Crisis Shields, BOJ Official Says (03:24 p.m.)

Asian countries are much better positioned to weather economic storms than they were in the past, thanks to strong foreign reserves and sound financial-market development, a top Japanese central banker said. 

Article content

“The current Asian economy is so robust,” Bank of Japan Assistant Governor Tokiko Shimizu told a panel session on Tuesday at the Boao Forum in southern China. “Even though the US and European countries have faced high inflation, high interest rates, Asian countries almost all are in good shape.”

China Has to Upgrade Its Industry, Prominent Economist Says (03:00 p.m.)

China has to push hard for technological innovation to move up the industrial value chain as it has lost its cost advantage following years of rapid economic development, according to Justin Lin, former World Bank chief economist.

Labor costs in China are getting higher, pushing some enterprises to move to places with lower wages, such as Vietnam and Cambodia, Lin, currently dean of Institute of New Structural Economics in Peking University, said during the Boao Forum.

Facing the challenge, China has to invest in new industries with higher added value and technology innovation, Lin said, adding that such a shift is “very normal” and necessary.

“As long as we can continue to carry out technological innovation, industrial upgrade, and utilize domestic capital and foreign capital during the process to promote the ‘new, quality productive forces’, China can still maintain relatively stable and rapid development,” he said.

Article content

Asia’s Clean Energy Future Seen in Supergrid (01:15 p.m.)

In the future, massive amounts of renewables in China and western Asia could serve as a power base at the center of a sprawling network connecting regions from the Arctic to the equator. That’s among the findings in a sustainable development report released at the forum.

The 133-page document goes into detail about challenges and possible solutions as countries in the region wean themselves off fossil fuels and gear their power sectors toward renewable energy. An intriguing issue is the natural imbalance in clean energy resources — sun, wind, geothermal activity — across such a vast region. One solution mooted by the report’s contributors, including officials from the China Electricity Council and Deloitte, is that national power grids might over time merge into regional and eventually transcontinental electricity systems.

Such ideas have been bandied about before, and politics and economics promise to get in the way. Still, it’s not too crazy to imagine a world in which a lamp in Tokyo is powered by a wind turbine on the outskirts of Almaty.

Article content

Asia GDP to Grow 4.5% This Year: Boao Report (12:30 p.m.)

Asia’s economic growth is expected to hit 4.5% this year, supported by consumption and proactive fiscal policies, according to a report released by the forum, with South Asia the fastest growing region at 5.8%. That figure for Asia is slightly higher than the weighted real GDP growth rate of 4.3% last year.

Inflationary pressure in Asia is expected to ease further in 2024, with levels in many countries reaching their central banks’ targets, the report added. The overall unemployment rate for Asia is expected to be 4.71% this year, lower than the projected global rate of 5.16%.

Zhang Yuyan, a contributor to the report and senior economist with Chinese Academy of Social Sciences, said the growth rate of the world’s second largest economy will “definitely” be 5% higher than last year’s. 

Asked about the prospects of overcapacity in the domestic economy, Zhang said China is undergoing a “fundamental change” in terms of technological advancement. “On one hand, there will be some people who will lose their jobs. But at the same time, job opportunities are created,” he said.

Article content

China’s Renewables Drives Needs Work Despite Record (12:00 p.m.)

China’s record addition of renewable power capacity means that costs are now lower than electricity sourced from coal, hydro and gas, said Zhang Lin, the China Electricity Council’s planning and development director.

There’s still work to do in many areas, he said, citing developing high-power wind turbines, improving solar’s energy conversion rate, and getting better at predicting when the sun will shine and the wind will blow.

Coal also needs to be decarbonized by blending the dirtiest fossil fuel with less polluting elements, Zhang said.  

Asia Needs More Cooperation on Green Financing (11:30 a.m.)

China has established a relatively comprehensive system for financing environmental initiatives, Chen Ji, head of a research group at China International Capital Corp., said on the sidelines of the forum.

Chen pointed to a recent report from the Asian Development Bank that said what’s needed is more cooperation across the continent. The report pegged Asia-Pacific’s investment needs for renewable energy at $569 billion in each of the 15 years through 2030 but warned that up to 65% of green infrastructure projects in emerging Asia aren’t bankable.

China’s Boao Forum Starts (8 a.m.)

Asia’s version of the World Economic Forum at Davos kicked off and runs to Friday.

Executives of top global companies including AstraZeneca Plc CEO Pascal Soriot are attending the event. People’s bank of China Governor Pan Gongsheng will also be there. 

Zhao Leji, the No. 3 official on the ruling Communist Party’s seven-member Politburo Standing Committee, is set to deliver the keynote speech on Thursday. Here’s the forum’s agenda.

—With assistance from Zheng Li, Ocean Hou, Mengchen Lu, Adrian Wong and Ben Westcott.

Article content