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The World Economic Forum at Davos is focusing on sustainability this year. US President Donald Trump is set to make a special address, despite his impeachment beginning in the Senate. Environmental activist Greta Thunberg hosts a panel session.
4.40pm: Hong Kong leader ‘disappointed’ by rating downgrade
Hong Kong’s chief executive Carrie Lam has said she is “very disappointed” by ratings agency Moody’s decision to downgrade the city’s credit rating.
Speaking in an interview with CNBC’s Geoff Cutmore at Davos, Lam said: “I am even more disappointed by their assessment of the Hong Kong situation, and their comment on the ‘weak institutions and governance’”.
“Because after seven months of unrest, what has proven to be resilient is Hong Kong’s institutions and governance.”
Moody’s cut Hong Kong’s rating from Aa2 to Aa3 today despite the leaders’s $1.3bn fiscal pledge to reinvigorate the economy last week. Ratings agency Fitch had already downgraded Hong Kong last September.
Protests against a controversial new extradition bill began in March 2019. It has since been withdrawn, but demonstrations have been a regular occurrence since early June.
Police clashed with pro-democracy supporters over the weekend as authorities used batons and tear gas to disperse the crowd. In today’s interview Lam said that there was no need for an independent investigation into police actions during the protests because they had shown “restraint”.
Lam also said today that the conditions would need to be right to enact a new national security law.
4.05pm: Ren Zhengfei says US is ‘overly concerned’ about Huawei
Huawei’s founder and chief executive, Ren Zhengfei, spoke on a panel on the future of technology this morning,
Ren said that artificial intelligence (AI) cannot grow rapidly in China: “China is still starting out in many areas of science and tech, therefore the US is overly concerned.”
China lacks the mathematicians, super computers and storage capabilities for further AI advances, according to Ren.
The US may place further restrictions on Huawei by increasing the number of products it is banned from buying. Huawei’s founder seemed resilient and said the sanctions hadn’t hurt too much. Any new measures “would not be very significant”.
He added: “The US has got used to being the world’s number one – if there is someone better than them they might feel uncomfortable.”
The Huawei chief was joined by historian Yuval Noah Harari on the panel entitled, ‘A future shaped by a technology arms race’. It was moderated by The Economist’s editor-in-chief, Zanny Minton Beddoes.
Ren was keen to show that technology had tangible benefits, but he was quick to acknowledge that AI could lead to job losses. He added: “Governments have the means to have more balanced wealth distribution and to balance out social problems.”
Responding to a question from the audience about the power of technology, Ren said that tech had allowed people to become smarter and take initiative.
This week, Ren’s daughter Meng Wanzhou will face a Canadian court to determine whether she will be extradited to the US. Meng, who is Huawei’s finance chief, is accused of misleading HSBC about the company’s business in Iran.
3.04pm: Plumbers arrested as suspected Russian spies at Davos
Police in Switzerland arrested two suspected Russian spies in Davos last August after being alerted to their unusually long stay.
The pair are suspected to have posed as tradesman five months before the World Economic Forum in order to install surveillance equipment at venues around the town.
According to reports in Zurich’s Tages-Anzeiger paper, the police and federal officials suspected the two men of being Russian intelligence assets in August 2019.
The police information chief Anita Senti confirmed that the men, who wanted to stay in Davos for three weeks, both had diplomatic passports.
The duo’s passports had not been accredited and so they would not have been able to claim diplomatic immunity had they been detained.
Senti said, “There were no indications of criminal acts during the controls,” so no arrests or entry bans were made. The two suspects were observed but were able to leave the country.
As well as President Donald Trump, other world leaders make the pilgrimage to Davos annually and would be of interest to the Kremlin. Other critics of Vladimir Putin’s administration, such as Bill Browder, are also in attendance.
President Putin has not attended Davos for 11 years.
In 2018, the Swiss Federal Intelligence Service found that one in four Russian diplomats based in Switzerland was a spy.
2.45pm: Goldman Sachs: Unicorns get an easier ride than public companies
Goldman Sachs chief executive David Solomon has been speaking about the valuation of unicorn companies with head of the New York Stock Exchange, Stacey Cunningham, and William Ford, chief executive of General Atlantic Partners.
Solomon believes that as capital markets allowed for more private capital, these startups have “not been held to the same standard about producing information on performance.”
He said: “In the past, when a company needed capital to grow, once it got the past the initial funding phase, the only place to get money was from going public. Companies had to go through the process of discipline around statements.”
Cunningham added: “There is a real fear of missing out. Investors were ignoring what was happening because they didn’t want to miss the next big thing. Now, investors are asking more about profitability.”
In 2019, several ‘unicorn’ startups floundered when they tried to public. Ride-hailing apps Uber and Lyft both traded considerably lower after listing.
Office-sharing company WeWork pulled its plans to float last September, amid operating losses and corporate governance issues.
Solomon’s main concern is that the process of going public raises the bar on disclosure and governance but there are now two standards in a broad integrated capital market.
“If we’re putting standards on public companies that we aren’t on private companies, then we shouldn’t be surprised when companies want to stay private.”
1.50pm: China does not commit to one trillion trees initiative
During his address earlier, President Donald Trump committed to the one trillion trees initiative which is being launched at Davos 2020.
Zheng says the initiative is an important step but does not explicitly state whether China will be joining it. He says China has made progress in reforestation and is “ready to share our experience with other countries.”
He reiterates China’s commitment to working with other countries to build a global economy.
1.45pm: ‘Openness is a trademark of today’s China’, says Zheng
Zheng defends economic globalisation: “China has embraced economic globalisation and pursued development and succeeded in having a fully economic policy.”
He says: “Openness is a trademark of today’s China.”
Following President Trump’s speech earlier, Zheng says: “Despite the protectionist and unilateral moves by some countries, China will not stop opening up and we will not follow their footsteps to move in the opposite direction.”
He adds that China will continue to reform to drive economic globalisation and that it will further widen market access for foreign investors.
1.35pm: Unilateralism and protectionism will lead nowhere, says China’s vice premier
Han Zheng, China’s vice premier, says that the world economy is still undergoing a profound adjustment in the wake of the financial crash.
He said: “Protectionism and unilateralism is spreading, trade and investment frictions are escalating – the risks and uncertainties are notably on the rise. ”
The best way forward is to build an “inclusive and open world economy,” Zheng said. He added: “Unilateral and protectionism will lead nowhere. They weaken the foundation of global growth.”
11.45am: America is the ‘bastion of freedom’, says Trump
President Trump says the US will “always be the bastion of freedom”, and that the country understands what the “pessimists” refuse to see.
“A growing and vibrant market economy focuses on the future, it excites creativity strong enough to overcome any challenge.”
11.33am: Trump says it is ‘not the time for pessimism’
In response to the central theme of Davos 2020, President Trump said: “We must reject the perennial prophets of doom. This is not a time for pessimism. This is a time for optimism.”
At a panel earlier this morning, activist Greta Thunberg said the world is running out of time.
President Trump last year began the process to formally exit the Paris climate agreement. It will make the US the only country in the world that will not participate in the pact.
During his address, the President said he will join the one trillion trees initiative launched at Davos 2020. He adds: “What I want is the cleanest water and the cleanest air.”
11.31am: US could do tremendous’ trade deal with the UK, says Trump
Trump says negotiations with China on a Phase Two trade will start soon. “Our relationship with China has right now probably never been better.”
He says China could buy up to $300bn worth of US goods now the “rough patch” is over.
He added that the US could do a “tremendous” trade deal with the UK, calling Prime Minister Boris Johnson a “wonderful new Prime Minister” who “wants very much to make a deal”.
11.22am: Trump says US is ‘winning like never before’
US President Donald Trump has said that the US is “in a midst of an economic boom the likes of which the world has never seen before.”
He began his speech at Davos 2020 talking about how well the US has done since he took office three years ago. Trump said the American turnaround had been “nothing short of spectacular”, stating that the “American dream is back, bigger and better.”
President Trump said the country is thriving and flourishing like never before, citing the agreement with Mexico and Canada, and the US-China trade deal.
Since taking office, Trump said the country’s newfound prosperity is “undeniable, unprecedented and unmatched.” He said it had been because of every decision taken is “focused on improving the lives of everyday Americans.”
10.17am: Klaus Schwab welcomes leaders to Davos 2020 with opening address
The executive chairman of the World Economic Forum, Klaus Schwab, has welcomed business leaders and politicians to Davos 2020 in his opening address.
Schwab said that leaders have realised businesses are not just economic entities but social organisms. “We cannot be complacent, we must give the concept of stakeholder response meaning in real life.”
He said that environmental, social and governance (ESG) criteria must become an integral part of auditing and reporting.
Echoing environmental activist Greta Thunberg’s earlier remarks at a panel session, Schwab said: “The world is in a state of emergency… We do not want to face continued political and economic disintegration. We do not want to reach the tipping point of irreversibility of climate change.”
Schwab was adamant that the Davos spirit is to accept and respect different voices and to jointly look at solutions. He specifically mentioned the need to listen to “young and diverse voices”.
Schwab is the founder and executive chairman of the World Economic Forum at Davos. The forum is celebrating its 50th birthday this year.
Simonetta Sommaruga, president of the Swiss Confederation, also warned about the danger of climate change.
She told the hall: “The world is on fire. The rainforest is burning in the Amazon, bushfires are raging in Australia. The consequences for humans and nature are disastrous.”
She called on politicians and business leaders to take action and not just “leave it to the firefighters.”
Sommaruga said: “We need the private sector to act on biodiversity and climate protection. We need politicians to take action in their own country and internationally … so global warming is stopped.”
9.33am: Young activists address Davos 2020
Swedish environmental activist Greta Thunberg has called on leaders at Davos 2020 to listen to young people about the climate.
Addressing a panel session entitled “Forging a sustainable path towards a common future”, the 17-year-old said: “The science and voice of young people is not the centre of the conversation, but it needs to be.”
Thunberg spoke about the 18 months since she started her climate strike, saying that it had started an “alliance of movements”.
In August 2019 Thunberg sailed across the Atlantic Ocean from Plymouth to New York in order to attend the UN Climate Action Summit.
She said: “People are more aware now. It feels like the climate and environment is a hot topic now, thanks to young people pushing.”
Thunberg cited the IPCC report on climate change from 2018, which reported there are only a few years left to act if there’s a 67 per cent chance of keeping the global temperature rise to below 1.5 per cent.
“I’ve been repeating these numbers at nearly every speech I’ve given for the last 18 months.”
Thunberg spoke alongside three other young activists, including Autumn Peltier, chief water commissioner for the Anishinabek nation of indigenous people in Canada.
Peltier has been advocating for water conservation since she was eight years old. She said “If you have an idea, or a solution, or a way you can help us, just do it.”
Eighteen-year-old Natasha Mwansa criticised the media who focus on stories for a couple of days and then drop them. Journalists should use their power to “bring us hope”.
The World Economic Forum has invited 10 teenagers to Davos. Among them is Irish teenager Fionn Ferreira, who has created a solution for preventing micro plastics reaching the ocean.
The WEF is celebrating its 50th anniversary and the theme for this year’s forum is “stakeholders for a cohesive and sustainable world”.
One of the seven key themes up for discussion at the conference is “How to save the planet”. Despite this, key business leaders and politicians are expected to travel by plane.