World Government Summit: AI Readiness is Imperative

Opening session of World Government Summit (WAM)
Opening session of World Government Summit (WAM)
TT

World Government Summit: AI Readiness is Imperative

Opening session of World Government Summit (WAM)
Opening session of World Government Summit (WAM)

Participants in the World Government Summit (WGS) 2024 on Monday unanimously agreed that the rapid progress in artificial intelligence technologies has become a pivotal point in preparing for the future, emphasizing the necessity of establishing strategies for this transformative wave.
The summit stressed the importance of clarifying the multifaceted dimensions of AI impact, starting with its ability to revolutionize industries and increase human capabilities.
Participants called for setting positive frameworks that help benefit from this technology.
The event also witnessed discussions about global economy and the challenges facing it.
- $17 trillion
UAE Minister of Cabinet Affairs and WGS Chairman Mohammed al-Gergawi announced that $17 trillion is the cost of disputes, conflicts, and violence around the world last year alone. He said six percent of this number could cover the cost of major challenges facing humanity in one year.
“For example, it could eliminate hunger and literacy, treat cancer and provide clean water. Imagine what could be achieved if we invested more in addressing other challenges facing humanity,” he said.
He pointed out that poverty rates are constantly declining in the world, noting that “poverty rate has been reduced by 50% in 20 years,” adding: if we look throughout history, we will find out that we are living in the best, safest, most prosperous, and healthiest human era.”
- Artificial intelligence
He stressed that the clear shifts in international trade portend a decline in globalization, and may cost up to 7% of the world's gross domestic product, represented by high inflation, labor shortages, and disintegration in the global financial system.
Gergawi cautioned that this technology is a double-edged sword, as “media misinformation” and the spread of misleading and false information will be one of the biggest challenges facing humanity.
The number of fabricated videos in 2023 has tripled from the previous year, and half a million fabricated content has spread in the digital space, he added.
The Minister pointed out that 50% of global growth comes from China and India alone, as these two countries emerge to shape the future of global economic growth.
China has surpassed the United States in the number of patents in AI and investment in clean energy, and India has the largest number of patents in the world.
With the rest of the Asia-Pacific region contributing up to 25% of global growth, this means that more than 70% of global economic growth will come from the East.
Gergawi called for cooperation to benefit from this emerging new global economic engine instead of confronting it and trying to obstruct it.
- Infrastructure
Meanwhile, Nvidia CEO Jensen Huang said on Monday that every country needs to have its own artificial intelligence infrastructure in order to take advantage of the economic potential while protecting its own culture.
"You cannot allow that to be done by other people," Huang said at the World Government Summit in Dubai.
Huang, whose firm has catapulted to a $1.73 trillion stock market value due to its dominance of the market for high-end AI chips, said his company is "democratizing" access to AI due to swift efficiency gains in AI computing.
"The rest of it is really up to you to take initiative, activate your industry, build the infrastructure, as fast as you can."
He said fears about the dangers of AI are overblown and some interests aim to "scare people about this new technology, to mystify this technology, to encourage other people to not do anything about that technology and rely on them to do it. And I think that's a mistake."
Huang stressed that investing in AI is a cornerstone of the economic future, noting that building the right infrastructure is essential to protecting local culture and maximizing economic benefits.

He emphasized the importance of joint efforts to make access to AI more democratic and how to improve the efficiency of AI computing.
The expert called on Arab countries to invest in strong AI industries and infrastructure, pointing to its enormous potential.
He underlined that the focus should be on the responsible development and application of AI, taking into account the principles of safety, transparency, and inclusivity.
Huang downplayed concerns about AI risks and pointed to the need for strategic investments in smart infrastructure and comprehensive policies that encourage open-source development.
- Egypt’s economy
For his part, Egypt’s Prime Minister Mustafa Madbouly said that the summit is being held amid delicate global circumstances, in light of the successive global economic crises and influential geopolitical developments that affect all nations.
He explained that the challenges include the widespread inflation, which necessitated changes in the priorities of economic policies, most notably monetary policy.
The PM explained that today’s governments face many challenges and threats to their traditional roles, including the economic repercussions of successive and complex global crises, which have led to higher inflationary waves.
He also referred to a significant decline in global economic growth, which is expected to remain during the current and next years lower than its historical records during 2000-2019, according to International Monetary Fund (IMF) estimates.



China’s October New Lending Tumbles More than Expected despite Policy Support

 A masked woman walks at a fashion boutique displaying posters to promote Singles' Day discounts at a shopping mall in Beijing, Monday, Nov. 11, 2024. (AP)
A masked woman walks at a fashion boutique displaying posters to promote Singles' Day discounts at a shopping mall in Beijing, Monday, Nov. 11, 2024. (AP)
TT

China’s October New Lending Tumbles More than Expected despite Policy Support

 A masked woman walks at a fashion boutique displaying posters to promote Singles' Day discounts at a shopping mall in Beijing, Monday, Nov. 11, 2024. (AP)
A masked woman walks at a fashion boutique displaying posters to promote Singles' Day discounts at a shopping mall in Beijing, Monday, Nov. 11, 2024. (AP)

New bank lending in China tumbled more than expected to a three-month low in October, as a ramp-up of policy stimulus to buttress a wavering economy failed to boost credit demand.

Chinese banks extended 500 billion yuan ($69.51 billion) in new yuan loans in October, down sharply from September and falling short of analysts' expectations, according to data released by the People's Bank of China (PBOC).

Economists polled by Reuters had predicted a fall in new yuan loans to 700 billion yuan last month from 1.59 trillion yuan the previous month and against 738.4 billion yuan a year earlier.

"Corporate financing demand remains weak due to poor profitability," said Luo Yunfeng, an economist at Huaxin Securities. "Credit demand may not pick up soon despite recent central bank policy measures."

The PBOC does not provide monthly breakdowns but Reuters calculated the October figures based on the bank's Jan-October data released on Monday, compared with the Jan-September figure.

The PBOC said new yuan loans totaled 16.52 trillion yuan for the first ten months of the year.

Household loans, including mortgages, dropped to 160 billion yuan in October from 500 billion yuan in September, while corporate loans dipped to 130 billion yuan from 1.49 trillion yuan, according to Reuters calculations based on central bank data.

Chinese policymakers have been working to arrest further weakness in an economy stuttering in recent months from a prolonged property market downturn and swelling local government debt.

Among their goals is to tackle the side-effects from a mountain of debt left from previous stimulus dating back to the 2008-2009 global financial crisis.

China's central bank governor Pan Gongsheng said China will step up counter-cyclical adjustment and affirm a supportive monetary policy stance, a central bank statement showed on Monday, citing a report Pan delivered to the top legislative body last week.

In late September, the central bank unveiled an aggressive stimulus package including rate cuts, and Chinese leaders pledged "necessary fiscal spending" to bring the economy back on track to meet a growth target of about 5%.

MORE STEPS ON THE CARDS

China unveiled a 10 trillion yuan debt package on Friday to ease local government financing strains and stabilize flagging economic growth, as it faces fresh pressure from the re-election of Donald Trump as US president.

New measures planned will include sovereign bonds issuance to replenish the coffers of big state banks, and policies to support purchase of idle land and unsold flats from developers, Finance Minister Lan Foan said.

Analysts at OCBC Bank expect the central bank to deliver another cut in banks' reserve requirement ratio in November or December to support the planned bond issuance.

China watchers are skeptical the steps will produce a near-term boost in economic activity as most of the fresh funds will be used to reduce local government debt, but China's central bank said it will continue supportive monetary policy to create a favorable monetary and financial environment for economic growth.

The PBOC also said it will study and revise money supply statistics to better reflect the real situation of the country's money supply.

Trump's election win could also prompt a stronger fiscal package in expectations of more economic headwinds for China. Trump threatened tariffs in excess of 60% on US imports of Chinese goods, rattling China's industrial complex.

Broad M2 money supply grew 7.5% from a year earlier, central bank data showed, above analysts' forecast of 6.9% in the Reuters poll. M2 grew 6.8% in September from a year ago.

Outstanding yuan loans grew 8.0% in October from a year earlier. Analysts had expected 8.1% growth, the same pace as in September.

The outstanding total social financing (TSF), a broad measure of credit and liquidity in the economy, slowed to a record low of 7.8% in October, from 8.0% in September. Acceleration in government bond issuance could help boost growth in TSF.

TSF includes off-balance sheet forms of financing that exist outside the conventional bank lending system, such as initial public offerings, loans from trust companies, and bond sales.

In October, TSF fell to 1.4 trillion yuan from 3.76 trillion yuan in September. Analysts polled by Reuters had expected TSF of 1.55 trillion yuan.