By He Shan

China.org.cn staff reporter

Government and business leaders converged at the China World, one of Beijing's top hotels, for the 2nd International CEO Roundtable of Chinese and Foreign Multinational Corporations, to discuss how to tackle the effects of the global crisis on the Chinese economy.

The roundtable discussion, the second of its kind, is intended to provide a broad perspective on the prospects for China's economy.

Globalization means no country insulate itself from the world's worst economic crisis since the Great Depression, a government official said.

China's most acute problems have been seen in the manufacturing sector, hit by a steep decline in exports that began early this year and has been magnified by the recent financial meltdown. The closure of thousands of factories in the Pearl River Delta and other coastal regions has forced migrant workers to scramble for other jobs or return home to the countryside.

"This is the most urgent problem, because mass unemployment will lead to social unrest," said Cheng Siwei, vice chairman of the Standing Committee of the National People's Congress.

Steven Sun, a senior analyst at HSBC said China should focus on its own problems before helping others. He said an economic soft landing was likely as a result of the government's 4 trillion yuan stimulus package.

Most of those present agreed that the market as a whole is not short of liquidity, but short of confidence. Positive attitudes will improve the reality on the ground, and restoring confidence should be the top priority for the government.

Change was the word on everyone's lips. "If the US government's bailout plan is executed according to the old rules, I don't think it will work," said Zhao Yuan, a senior banking expert. "We need to define a new financial system and draw up a set of new rules. The G20 Summit may be able to begin working on it, but it won't be accomplished in one meeting. It will take time and effort."

"I have felt the brunt of downturn. Many of my friends are flying business class instead of first class," said Wu Gangping, an Ernst & Young partner. "And look at individual consumption. Christmas is the best season for business, but people are spending less and saving more."

Despite the grim outlook for the US and global economy, many experts believe things will pick up in the second half of 2009.

But others say the world is facing a multi-year L-shaped recession, and that even if the economy starts to grow again by the end of 2009, the recovery will be very weak.

As for the causes of the financial crisis, some said it was the legacy of former Fed Chairman Alan Greenspan's flawed policies; others said it was the result of excessive deregulation of the financial system, and still others put it down to insatiable greed.

At a forum on finance and capital more than one speaker mentioned the linguistic quirk that in Chinese the word for crisis means both "danger" and "opportunity". Even in an economic slump, they said, there will be opportunities for Chinese enterprises.

"But when it comes to overseas acquisitions, we should be cautious and patient," said Wu Gangping. "Given the complexity and uncertainty, we should wait and see what is really worth buying."

(China.org.cn, November 17, 2008)