This year’s twin shocks of inflation and geopolitical tensions dominated talks among business and policy leaders on the closing day of the Bloomberg New Economy Forum in Singapore.
(Bloomberg) — This year’s twin shocks of inflation and geopolitical tensions dominated talks among business and policy leaders on the closing day of the Bloomberg New Economy Forum in Singapore.
Speakers pointed to signs of stabilizing relations between the world’s two biggest economies following Monday’s face-to-face meeting of US President Joe Biden and his Chinese counterpart Xi Jinping, but concerns remain over flash points. Former Australian Prime Minister Kevin Rudd said neither power wants a war over Taiwan, in part because neither are in a position to win.
“The reason for that is not because of a lack of nationalism, the reason for that is because both sides are concerned they might lose, militarily,” Rudd said on a panel discussion. That’s “quite apart from the monumental economic catastrophe globally which would come from a full-scale military encounter in the Taiwan Strait.”
Singapore’s former permanent secretary for foreign affairs, Bilahari Kausikan, said that nations shouldn’t exaggerate the threat of a rising China.
“China is a formidable competitor, but it’s a competitor within the same system,” he said. “China may want to dominate the system, but he doesn’t want to destroy it because he has benefited from it.”
The afternoon session will see International Monetary Fund Deputy Managing Director Gita Gopinath speak on a panel discussing inflation. Lawrence Wong, Singapore’s finance minister and prime minister-in-waiting, will also address the forum.
The final day of the three-day event — which has seen policymakers and business leaders discuss issues including inflation, sustainable investment and the future of the global economy — will conclude with a virtual address by Ukrainian President Volodymyr Zelenskiy.
In its first two days, the NEF featured speakers including US trade chief Katherine Tai, Chinese Vice President Wang Qishan and former Secretary of State Henry Kissinger.
Here are some of the other issues that were top of mind for executives on the forum’s concluding day.
Covid Zero
Worries over how and when China eventually pivots away from Covid Zero were flagged by James McGregor, the chairman for APCO Worldwide Greater China, who said the government needs to address dampened consumer confidence.
“The thing about a consumer economy, you can’t order people to spend, they have to have confidence,” McGregor said on the same panel as Australia’s Rudd. The government may need to “move ahead with some economic reforms that we’re not expecting out of necessity.”
Rudd said that barring a new Covid variant, China will by the middle of next year be “well on its way to being out of this — that will have a huge positive impact on domestic consumer demand, which has been suppressed for a very long period of time.”
Energy
In a warning of what’s still to come, Europe shouldn’t let its guard down on conserving energy despite the recent drop in natural gas prices and success in refilling inventories, according to the region’s top operator of gas infrastructure.
“We are in a better situation, but that doesn’t mean we should relax,” Catherine MacGregor, chief executive officer of Engie SA, said on a panel discussion. “On prices, one can expect continued volatility.”
Volatility in energy prices is not good for the system or long-term planning, Yngve Slyngstad, chief executive officer of Industry Capital Partners, said during the same panel.
Scarcity
Price volatility in metal supply chains for electric vehicles and renewable energy will continue for several years because of a lack of investment in lithium and nickel mines, according to Gene Berdichevsky, chief executive officer of specialist materials supplier Sila Nanotechnologies Inc.
“We are going to go through supply chain shortages, we are going to go through commodity curve spikes,” Berdichevsky said in a Bloomberg TV interview on the NEF’s sidelines. “This will take the rest of the decade to work itself out.”
Clean energy and storage technology will ultimately be cheaper and help nations become less reliant on fuel imports, he said. Sila produces silicon anode material to boost energy storage in batteries, and has partnerships with firms including BMW AG and Daimler AG.
Future of Work
LinkedIn Corp. Chief Executive Officer Ryan Roslansky said there’s continued to be a surge in job listings for remote work: They account for 15% of listings on LinkedIn, compared to only 1% before the pandemic.
On the same panel, PayPal Holdings Inc. Chief Executive Officer Dan Schulman said productivity at his company increased substantially when everyone had to work from home, though he still sees the need for in-person venues to welcome and train new hires. PIMCO Managing Director John Studzinski said the finance industry has embraced in-office culture as the most effective way to collaborate.
All three stressed the importance of giving workers a sense of belonging and purpose as an advantage in recruiting, especially the younger cohort who are more comfortable with switching jobs often.
“Covid was a wakeup call for dignity in the workplace,” Studzinski said.
Rebuilding Ukraine
Fortescue Metals Group Ltd. founder Andrew Forrest said his $500 million pledge will help kickstart a plan to attract at least $25 billion to help upgrade decaying and destroyed infrastructure in Ukraine with more advanced, greener replacements.
Discussions with Ukraine’s President Zelenskiy, US President Biden, BlackRock Inc. Chief Executive Officer Larry Fink and others have continued since March on the proposal aimed at drawing support from sovereign funds, philanthropists, institutions and other investors, according to a statement.
“What the Russians have destroyed can readily be replaced with the latest, most modern green and digital infrastructure,” Forrest said in a Bloomberg TV interview on sidelines of the NEF. “Those funds will be ready to roll when the Ukrainian government and the Ukrainian people say so.”
Asset Management
Allianz SE sees a “huge opportunity” from asset management in China because the nation needs to diversify overseas investments, its chief executive officer said.
Chinese investors need to diversify, which requires advice on how to invest in Europe or US credit markets, CEO Oliver Baete said in an interview with Bloomberg Television. “I think we can add a lot of value to that.”
Baete told Chinese media in early October that his company is still optimistic about the future of China. Allianz won approval to establish the first foreign insurance group in the world’s most populous country, and it subsequently set up the first fully-owned foreign insurance asset management firm.
The New Economy Forum is being organized by Bloomberg Media Group, a division of Bloomberg LP, the parent company of Bloomberg News.
–With assistance from Adrian Kennedy, Bill Faries, Clarissa Batino, Cecilia Yap, Aradhana Aravindan, John Cheng, Rebecca Choong Wilkins, Jill Disis, Philip Glamann, Lulu Yilun Chen, Zhang Dingmin, Russell Ward, David Stringer, Jeff Sutherland, Stephen Stapczynski, Selina Xu, Michelle Jamrisko, Vladimir Savov, Siegfrid Alegado and Philip J. Heijmans.
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