World Economic Forum believes in China and oil

World Economic Forum believes in China and oil

The World Economic Forum in Davos is thought to be an informal platform for a discussion of key issues of modern times, prospects of economic development, improvement of stability and peace, and the situation in hotspots. No resolutions or other documents are adopted there; but the Forum is an opportunity to discuss key problems of the world economy, build new business contacts and hold unofficial meetings.

Despite the fact that the forum in Davos is primarily economic, this time there have been talks about politics, about humanitarian things. And they have been discussed very carefully. “This is primarily associated with the fact that the participants of the forum have no idea what to do with the crisis. There is no specific recipe to get out of this crisis, there is no common understanding of the fact that it is necessary to follow common rules and quietly get out of this difficult economic and financial situation,” Alexey Mukhin, Director General of the Center for Political Information, says.

According to him, participants used the formula "if you do not know what to talk about, talk about what you are accustomed to saying." The USA spoke about global warming, Europe spoke about refugees. No recipes were worked out. It was not the goal of the Forum, although previous forums were held more constructively, in my opinion.”

The Russian delegation was headed at the Forum by Presidential Envoy in the Far East, Yuti Trutnev. “The fact that the Russian delegation was not represented at a high level is understandable. At previous forums the [Russian] representation was quite high, but it had no ‘investment exhaust’. So I think that "a stick" was proposed (in the person of Yuri Trutnev, who was supposed to show the European community that our so-called "turn to the East" is still relevant), and "a carrot" was proposed in the person of Alexey Kudrin. On the eve of the forum, a lot of information was issued that Alexey Kudrin would become the Deputy Prime Minister or the closest adviser to the President on macroeconomic issues soon. In this way, an interest in his participation in the forum was added. We will see from the investment figures whether it turned out well or not,” Mukhin states.

He thinks the main topics of the forum were China, oil and currencies.

“China has closed its statistics, strongly implying that its economic problems are not so serious, as it is attempted to present, which, by the way, was announced by a number of Western European figures of the financial world. I think China is some kind of symbol of faith of the world economy. So much depends on it right now, on the prospects of its development, as it has taken the burden of the industrial revolution. It is easier to believe in China than not to believe in it. At least some hope appears this way. Davos tried to formulate this hope,” Mukhin says.

Speaking about oil, forecasts of oil prices are much more optimistic than they were before. “Moreover, the harmonized chorus of the participants in the economic forum, in this regard, was very obvious, demonstrative and characteristic. The economy believes not only in China, but also in oil, that the price is about to grow, that it will be fine, more or less,” the expert believes.

The most complicated discussion touched on currency wars as a manifestation of global economic competition between countries. “It is unclear what will happen to the dollar, it is unclear what will happen to the euro, the prospects of a golden yuan are not clear. None of the figures of carrier-states, the issuers of these currencies, wanted to clarify the situation. In the future it will make the currency wars extremely tough. Lack of information leads to very serious surprises, and serious surprises in this system led to serious distortions. Distortions do not allow the mechanism to work, to regulate the processes in normal order, so there will be a need for more political methods to solve economic problems,” Mukhin states. 

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