- Associated Press - Wednesday, January 26, 2011

DAVOS, Switzerland | It may be time to stop referring to China, the world’s second-biggest economy after the U.S., as an emerging nation and focus on creating jobs now that the global recovery appears to have gotten a toehold.

That’s what top business leaders, politicians and social activists discussed, among other issues, on the first day of the World Economic Forum on Wednesday.

“There is a global economic recovery,” said economist Nouriel Roubini, who gained renown for predicting the crisis of 2008 and a few months ago was still warning against the possibility of a “double-dip recession.” He noted that “balance sheets are strong, confidence is rising,” credit spreads have fallen and liquidity — the availability of credit — has increased.

But Mr. Roubini warned that in the U.S. and Europe, growth remained low and unemployment high. The U.S. still faced a real estate crisis and inspired little faith in its ability to tackle its deficit and debt, while in Europe markets have forced austerity measures that endanger growth.

And in an allusion to China, Mr. Roubini said there was “not enough exchange rate adjustment” and warned this could lead to “currency wars and eventually trade wars and protectionism.”

The 2,500 participants at this year’s meeting have focused much of their concentrated expertise on China’s growing clout, simmering anxieties about Europe’s debt crisis and consideration of the possible aftershocks of the financial crisis that has wrought layoffs, cutbacks and austerity measures.

With China overtaking Japan as the world’s No. 2 economy last year, and growth predicted to hold steady in the upper single digits this year, panelists questioned whether Beijing hasn’t already arrived at the top table.

“We have to get out of the lexicon the words ‘developing’ or ‘emerging,’ ” said Martin Sorrell, chief executive of advertising giant WPP Group.

China and India have both sent their biggest ever delegations to this year’s forum, spearheaded by business leaders seeking to plant their flags on a world stage previously dominated by U.S. and European companies.

“In 10 years, the economies of the emerging world will be in excess to $20 trillion, which is equal to the U.S. economy,” noted Azim Premji, chairman of India’s Wipro.

Zhu Min, former deputy governor of the Bank of China and now a special adviser to Dominique Strauss-Kahn, managing director of the International Monetary Fund, cautioned that the figures obscure huge expectations among the poorest in the developing world that cannot be met soon.

The theme of this year’s meeting is “Shared Norms for the New Reality,” and part of that includes the new economic reality, too, and the shift of jobs from West to East is on the minds of many.