Liu He (1952- )

Emerging from coronavirus lockdown to a world changed by the war in Ukraine, China sought to convey reassurance about its economic health.DAVOS, Switzerland — China ventured back on to the global stage Tuesday, sending a delegation to the World Economic Forum to assure foreign investors that after three years in which the pandemic cut off their country from the world, life was back to normal.But the Chinese faced a wary audience at the annual event, attesting to both the dramatically changed geopolitical landscape after Russia’s war on Ukraine, as well as two data points that highlighted a worrisome shift in China’s own fortunes.Hours before a senior Chinese official, Liu He, spoke to this elite economic gathering in an Alpine ski resort, the government announced that China’s population shrank in 2022 for the first time in 61 years. A short time earlier, it confirmed that economic growth had slowed to 3 percent, well below the trend of the past decade.Against that backdrop, Mr. Liu sought to reassure his audience that China was still a good place to do business. “If we work hard enough, we are confident that growth will most likely return to its normal trend, and the Chinese economy will make a significant improvement in 2023,” he said.Mr. Liu, a well-traveled vice premier who is one of China’s most recognizable faces in the West, insisted that the Covid crisis was “steadying,” seven weeks after the government abruptly abandoned its policy of quarantines and lockdowns. China had passed the peak of infections, he said, and had sufficient hospital beds, doctors and nurses, and medicine to treat the millions who are sick.A clinic waiting room in Beijing in December. The Chinese government announced a broad rollback of its zero Covid rules earlier that month.Gilles Sabrie for The New York TimesHe did not mention the 60,000 fatalities linked to the coronavirus since the lockdowns were lifted, a huge spike in the official death toll that China announced three days ago.Mr. Liu’s mild words and modest tone were in stark contrast to those of his boss, President Xi Jinping, who came to Davos in 2017 to claim the mantle of global economic leadership in a world shaken up by the election of Donald J. Trump in the United States and Britain’s vote to leave the European Union.Since then, the United States and Europe have united to support Ukraine against Russia, leaving the Russians isolated with the Chinese among their few friends. Russia’s revanchist campaign has raised questions among Europeans about whether China might have similar designs on Taiwan, and escalated security concerns among the world’s democracies.Mr. Liu steered clear of political issues like the war in Ukraine or China’s tensions with the Biden administration. But he did say, “We have to abandon the Cold War mentality,” echoing a frequent Chinese criticism of the United States for attempting to contain China’s influence around the world.But it is China’s demographics and economic growth that are raising the biggest questions among businesspeople. The decline in population lays bare the country’s falling birthrate, a trend that experts said was exacerbated by the pandemic and will threaten its growth over the long term. The 3 percent growth rate, the second weakest since 1976, reflects the stifling effect of the government’s Covid policy.“The Chinese are worried, and they should be,” said Evan S. Medeiros, a professor of Asia studies at Georgetown University. “The entire international business community is way more negative about China over the long-term. A lot of people are asking, ‘Have we reached peak China?’”Children playing in the village square after school in Xiasha Village in Shenzhen, China, in November. China’s population has begun to shrink, the government announced on Tuesday.Qilai Shen for The New York TimesProfessor Medeiros, who served as a China adviser in the Obama administration, said, “For the past 20 years, China has benefited from both geoeconomic gravity and geopolitical momentum, but in the last year it has rapidly lost both.”The signposts of China’s economic weakness are everywhere: the government announced on Friday that exports fell 9.9 percent in December relative to a year earlier. “China has an export slowdown, construction is in crisis, and the local governments are running out of money,” said Jean-Pierre Cabestan, professor of political science at Hong Kong Baptist University. “China needs the world: to boost its economy, to accompany the return to more normalcy.”Mr. Liu laid out a familiar set of economic policies, from upholding the rule of law to pursuing “innovation-driven development.” He insisted that China was still attractive to foreign investors, who he said were integral to China’s plan to achieve the government’s goal of “common prosperity.”Lianyungang port in China’s eastern Jiangsu province. The government announced on Friday that exports fell 9.9 percent in December relative to a year earlier.Agence France-Presse — Getty Images“China’s national reality dictates that opening up to the world is a must, not an expediency,” Mr. Liu said. “We must open up wider and make it work better. We oppose unilateralism and protectionism.”But China’s delegation was a reminder of how the government has sidelined some of its own best-known entrepreneurs as it has reined in powerful technology companies. Jack Ma, a co-founder of the Alibaba Group, used to be one of the biggest celebrities at the World Economic Forum, holding court in a chalet on the outskirts of Davos. Now shunted out of power, Mr. Ma is absent from Davos.Instead, China sent less well-known executives from Ant Group, an affiliate of the Alibaba Group, as well as officials from China Energy Group and China Petrochemical Group. Unlike other countries, notably India and Saudi Arabia, which plastered buildings in Davos with advertisements for foreign investment, China has been low-key, holding meetings at the posh Belvedere Hotel.After his speech, Mr. Liu, who has a command of English and holds a graduate degree from Harvard, met privately with business executives. Some expected him to be more candid in that session about the challenges China has faced.Mr. Liu did not meet top American officials in Davos, though he will meet Treasury Secretary Janet Yellen in Zurich on Wednesday. Martin J. Walsh, the labor secretary who is at the conference, said he welcomed China’s return. “China’s in the world economy,” he said. “We need to engage with them.”Mr. Liu speaking on Tuesday.Fabrice Coffrini/Agence France-Presse — Getty ImagesThough Mr. Liu, 70, has a significant international profile — having led trade negotiations with the Trump administration — China experts noted that he is not in Mr. Xi’s innermost circle. He is also no longer a member of the Chinese government’s ruling Politburo, though analysts said he retained the trust of Mr. Xi.When he spoke at Davos in 2018, Mr. Liu’s speech was among the best attended of the conference. This year, however, about a quarter of the hall emptied before Mr. Liu spoke, after having been packed for a speech by Ursula von der Leyen, the president of the European Commission.The difference in crowd sizes reflected the reshuffled priorities of the West, now focused on exhibiting unity against Russian aggression.Ms. von der Leyen, who celebrated that solidarity in her remarks, did not exactly warm up the audience for Mr. Liu. She accused the Chinese government, in its drive to dominate the clean-energy industries of the future, of unfairly subsidizing its companies at the expense of Europe and the United States.“Climate change needs a global approach,” she said in a chiding tone, “but it needs to be a fair approach.”Mark Landler More