BARCELONA, Spain —The United States may have plunged the world into a sharp economic downturn, but it will take the combined efforts of China and other emerging nations to lead the global economy out of what is likely to be a long and painful recession.
That was the view of a number of business executives, government officials and economic experts gathered Monday and Tuesday for a conference on China 's role in the global economy.
"China alone may be only 6 percent of the world economy," said Josep Piqué, chairman of Vueling, a budget airline based in Barcelona. "But together with India , Brazil and other big emerging nations, they represent about 30 percent of global GDP. The emerging countries are the solution to the overall global slump."
His point of view was echoed by Claude Béglé, chairman of Swiss Post, which runs Switzerland 's public savings bank, who predicted that developing Asian nations would be the first to recover from the slump, followed by the United States and finally Europe.
But not everybody was so confident in the ability of China and Asia 's other fast-growing countries to spur a global economic recovery.
"China cannot replace the U.S. economy as the engine of global growth," said Chang Dae Whan, chairman of Maeil, a South Korean newspaper company. "We're going to need a huge stimulus package from the United States, on the order of $2 trillion, to get the global economy out of the financial crisis. So far, we've only seen about $700 billion. As a result, next year I expect to see more pain and fear."
The Global China Business Meeting in Barcelona, sponsored by Horasis, a consulting organization based in Geneva, and supported by several business and government organizations in Spain, China and elsewhere, is the fourth annual gathering of the group, whose primary goal is to encourage more trade and business contact between China and Europe.
The Chinese economy, for all its success since emerging from economic isolation in the 1980s, was at a major turning point, participants here suggested, that would require a fundamental adjustment in its approach to development.
Timothy Beardson, chairman of Albert Place Holdings in Hong Kong and a leading adviser to companies doing business in China, said that China had lost a number of advantages that powered its phenomenal double-digit growth rates of recent years.
"For the last 10 years, China had it good," Beardson said. "For the next 10 years, it won't have it so good at all."
Beardson pointed to several factors that were going to make it far more difficult for China to rely on booming exports to power its growth and to improve the nation's standard of living at a rapid pace. He said that China spent far less on research and development, as a share of its economy, than Japan , the United States and most other advanced economies, making it difficult for the country to upgrade its industrial structure. He also said that China had a very weak system of higher education, and lacked any substantial social safety net, which made its citizens fearful about their own future and encouraged them to save to excess rather than spend.
The most immediate challenge, he said, was that the Chinese currency, while rising only modestly against the dollar, has strengthened sharply against the currencies of its Asian competitors and against most European currencies, making its exports far less competitive in global markets.
"If Chinese companies are to succeed in the future," he said, they will have to recognize that "their comparative advantage lies in the domestic market, not the export economy."
Chinese officials here, while acknowledging many difficulties, made clear they were convinced that the nation would weather the first real test of its economic resilience since Beijing adopted a market approach to economic development. But they said that China would need to work more closely with other economies, including the United States and Europe, to overcome the current financial crisis.
"Confidence and cooperation," said Xu Kuangdi, chairman of the China Federation of Industrial Economics, "are worth more than money and gold."
China 's central bank has opened a special facility to help commercial banks overcome fund-raising difficulties in the interbank money market, Reuters reported Tuesday from Shanghai, citing two people in the banking industry with direct knowledge of the decision.
The global financial crisis has made it hard for some foreign banks and some smaller Chinese institutions to borrow money in China 's interbank market, since big Chinese banks have become wary of lending to them.
The new "term auction facility," begun in recent days, is intended to provide those cash-short banks with funds and thus reduce pressure on the banking system, said the sources, who declined to be identified because they were not authorized to speak to media on the issue.