Emerging economies and new norms under new circumstances will be the focus of the upcoming annual conference of the World Economic Forum (WEF).

The five-day WEF conference will start Wednesday in the Swiss resort of Davos under the theme of "Shared Norms for the New Reality."

Participants will debate on issues of current global importance: rise of emerging economies, debt crises and financial instability in the West, renewable energy policies and global policy agenda for 2011.

China, which celebrates the 10th anniversary of its accession into the World Trade Organization (WTO) this year, is one of the most dynamic expressions of emerging economies' rise. Other major emerging economies including India, Brazil and South Africa are also putting on eye-catching performance.

Shocks

In its report Outlook on the Global Agenda 2011, released earlier this month, the WEF said, "The world is in no state to withstand further shocks."

The shocks refer to the global financial crisis, which began in mid-2008 on the Wall Street due to U.S. subprime mortgage crisis.

It triggered sovereign debt crises in European states, especially in Greece and Ireland.

Loss of investors' confidence in and weakening of the U.S. dollar and the euro, the world's reserve currencies, have followed. Economic growth and job creation have slowed in developed economies.

A "systemic collapse" in global financial markets remained a tangible threat owing to sovereign debt crises, devaluation of currencies and rising trade protectionism.

The WEF is also deeply concerned with lack of commodities, especially energy sources like oil, and what impact this will have on prices.

"We are living in a completely new reality," said Klaus Schwab, founder and Executive Chairman of the WEF. "So we want to know what this reality is, and what is different now after the crisis."

In the comments made earlier this month, he said, "Our assumption is that the crisis was a structural one and many things have changed and we shouldn't go back to the old recipes."

Multi-speed

Meanwhile, the WEF suggests the "decoupling" of powerful developing economies from the traditional engines of the developed world is an "under-appreciated phenomenon."

For instance, while BRICS nations -- Brazil, Russia, India, China and South Africa -- recovered quickly from the 2008 financial crisis, developed nations are still struggling to return to growth.

Chanda Kochhar, CEO of India's ICICI Bank and co-chair of the WEF 2011 conference, refers to the current global landscape as a "multi-speed economy."

In comments made in the run-up to the WEF conference, she said, "We have to allow trade flows to continue, and we have to allow capital flows to continue."

But she cautioned that a balanced regulatory framework is also needed."The regulatory environment should be such that it prevents excesses, but at the same time it should be such that it does not curtail growth."

Against this backdrop, the transition to "a new reality," with emerging markets playing a more dominant role on the world stage, seems likely.

However, the WEF sounds a note of caution.

The Global Agenda 2011 report says, "On first glance, it is tempting to conclude that emerging economies are supplanting overspent developed nations. But this conclusion flattens differences among emerging markets and the variable impact of globalization and economic growth on countries, business sectors, communities and even families."

Free trade and globalization have been the cornerstones of WEF's ideology. It is a position greatly strengthened in the past decade by China's accession into the WTO in December 2001.

The success and speed, with which China has embraced globalization and made a profound impact on growth around the world, are both a vindication of WEF's attitude towards liberalization, and of China's carefully-managed approach to opening up its economy.

Re-balancing

WEF suggests the diversity of emerging markets means they have gained differently from globalization. Some have benefited far more than others and this prevents them from being a unified group.

As a result, WEF believes the global economic system's future resilience to shocks can't be managed solely by developed economies. A more inclusive system is needed.

"A more thoughtful analysis reveals that global re-balancing needs to be a long-term and collaborative process," the report concluded.

One example of collective action was witnessed in response to the euro zone debt crisis in 2010, when European Union (EU) member states rallied to bail out Greece and Ireland, and to establish a 750-billion-euro (1,030-billion-U.S. dollar) stabilization fund for the zone.

But it will be increasingly difficult to initiate such measures in a world witnessing an economic "decoupling" of nations. Moreover, high government indebtedness means it is harder for the countries to bail out banks, or to borrow money cheaply from the markets.

Wider collaboration, between emerging markets and developed ones, will be needed.

Wei Jiafu, president and CEO of China Ocean Shipping Group, and co-chair of the WEF 2011 conference, said the forum must explore how countries can jointly support each other to achieve a win-win situation in the background of an imbalanced economy.

In comments made on the WEF website, he also said, "I call for more collaborated effort by all major economies to strengthen cooperation and dialogue."

G20 process

Just as the previous ones, the WEF this year will host the world's elite: leaders of the most powerful nations, heads of the biggest, richest and most innovative businesses, and the brightest academics, public intellectuals and opinion leaders.

At least half of leaders of G8 and G20 member states are set to attend the conference, along with 200 ministers from major world economies and over 2,000 other participants. In fact, the WEF expects to provide strong impetus into G20 cooperation.

A review of global monetary institutions and the role of the U.S. dollar as a global reserve currency are also expected to be on the G20 agenda.

Former Danish Foreign Minister Niels Helveg Petersen, a Davos veteran, pointed out that China will be at the center of attention more than ever.

"China is an economic superpower, and that will without doubt increase Western leaders' attention to its present situation. And it makes an impression on Western leaders that increased governmental control of the financial sector is possible without decreasing growth. That will be in the mind of many state leaders on their way to Davos," he told Xinhua.

According to analysts in Davos, increased cooperation between countries is much needed as the world fears protective measures such as currency devaluation would be deterrence to global economic growth.

And that is expected to be the focus of discussions at the forum as the world's economic landscape looks fundamentally different from just a few years ago.

The big stars now are emerging economies, and many have pinned more hopes on the continuing growth of those economies.