Jan 21, 2015 5:53 PM

DAVOS WATCH: Snowmen, oil prices, deflation and Pharrell

The Associated Press

DAVOS, Switzerland (AP) The World Economic Forum kicks off in the Swiss ski resort of Davos with the goal of "improving the state of the world." In practice, it's a massive networking event that brings together 2,500 heads of state, business leaders, philanthropists and artists.

Here are some glimpses of what's happening Wednesday at Davos:



In a speech laden with metaphors, China's Premier Li Keqiang sought to downplay international concerns over the slowdown in the world's No. 2 economy.

"If I could compare the Chinese economy to a running train, what I want to emphasize is that this train will not lose speed or momentum," he told the World Economic Forum.

He also likened the Chinese economy to the skiers who come to enjoy the Davos slopes. "As we understand it, to be a good skier, one needs to do three things go at the right speed, keep balance, and be courageous," he said. "I believe this is also true for the Chinese economy."

Li's comments came in the wake of figures showing that the Chinese economy grew by 7.4 percent in 2014, its lowest pace of growth since 1990.

He also insisted that China was committed to peaceful relations with the wider world. "We have no intention to compete for supremacy with other countries," he said.

By Pan Pylas, Twitter: twitter.com/panpylas


Is a drop in consumer prices good or bad? Many leaders in Davos are seeing it as one of the biggest dangers in years.

Lower prices can cut people's bills. But when people start expecting prices to drop on a broad scale, they put off buying things, hurting growth. It's a dynamic that is hard to escape and is a threat to developed economies, particularly Europe and Japan.

Anthony Scaramucci, the founder of investment firm SkyBridge Capital, was clear, if somewhat hyperbolic: "If we get deflation, the average citizen of the world does not understand its impact. It's the Darth Vader of the economy, the Death Star shooting a laser to blow up the Earth."

The European Central Bank is expected to announce Thursday a big stimulus to help the eurozone economy and get inflation higher.

Not everywhere is in the same boat. Russia is dealing with a surge in inflation after its currency slumped. "If you need to know how to make inflation, come to Russia," quipped Arkady Dvorkovich, Russia's deputy prime minister.

Carlo Piovano, twitter.com/cpiovano


Pharrell Williams, who got everyone singing along to "Happy" last year, says he'll have all of humanity singing together at a worldwide concert June 18 to fight global warming.

The pop superstar has teamed with Nobel Peace Prize-winner and former U.S. Vice President Al Gore to produce a "Live Earth" concert on seven continents to build support for a U.N. climate pact in Paris in December.

Williams said he hopes to have a billion voices demanding "climate action now." If something substantial does emerge in Paris, those voices will gladly sing along to "Happy" once again.

__ By John Heilprin, twitter.com/johnheilprin


The World Economic Forum isn't just about business and political leaders talking shop for activists, it's about getting your message across.

Action/2015, an umbrella movement that involves groups big and small, is trying to underline the need for the global elite to deal with poverty, growing inequalities and climate change. To do so, supporters built 193 snowmen on the sidelines of the Forum, each representing a nation, neatly attired with a flag scarf.

This year is a big one for activists. In September, global leaders are set to meet to update their efforts to fight poverty, followed three months later by international climate talks in Paris.

By Pan Pylas, Twitter: twitter.com/panpylas



The acute fall in oil prices and oil's impact on the global economy featured heavily in discussions at the World Economic Forum.

Most participants agreed the scale of the fall to below $50 a barrel around 60 percent since last June represents a big boon for the global economy, especially to net importers of oil such as the United States, China, Japan and the 19-country eurozone. The latter, which is stumbling along from one anemic quarter to the next, needs all the help it can get, even with European Central Bank President Mario Draghi expected to announce some stimulus Thursday.

Kenneth Rogoff, economics professor at Harvard University, thinks the positive repercussions will be "pretty big" within the year and that experts are underestimating the impact.

Clearly not all economies stand to benefit and Russia may be the country most negatively affected by the sharp slide in oil prices. The International Monetary Fund warned this week that the Russian economy could contract 3 percent this year.

Russia's deputy prime minister, Arkady Dvorkovich, hoped that the fall in oil prices would soon end, saying only then would Russia's currency, the beleaguered ruble, find some support.

China's top central banker, Zhou Xiaochuan, also hoped that stability would return to oil prices and noted a potential negative side effect it makes investing in alternative energies such as wind or solar power less attractive. In a year when climate change is high on the international agenda, that's not helpful.

By Pan Pylas, Twitter: twitter.com/panpylas



Host country Switzerland, in an unusual development, is itself the subject of many discussions this year at the forum. The reason: the massive surge in its currency's value last week.

The jump in the Swiss franc, which at one point Friday rallied 30 percent against the euro and the dollar in minutes, is seen as a sign of the jitteriness in the global economy.

It has also made attending the forum a whole lot more expensive. That's not a problem for many attendees, among them chiefs of industry, billionaires and politicians travelling on a government budgets. But it is ballooning the costs for the hundreds of professionals attending the forum to network with the bigwigs.

Those from the U.S. will find their expenses over 15 percent higher, while eurozone attendees looking at a 20 percent hike.

Carlo Piovano, twitter.com/cpiovano


Even before the Swiss franc's rise, there is talk every year about the high prices at this tony ski resort and the suspicion that they are even higher during the World Economic Forum.

One speaker saw the transition in action. She and her husband arrived early at a cozy hotel near the edge of town to ski. They quite enjoyed the restaurant with its fixed-price menu at 25 Swiss francs ($29) a head.

On the morning the forum opened, the hotelkeeper informed them there were a few changes in the menu. It was a tad fancier, our speaker reported. But the big change was at the bottom the fixed price meal was now 50 francs.

Mike Oreskes, twitter.com/michaeloreskes;


--  Dealing with the Disease of Addiction? Click here for help --

More from NH1.com

NH1 News Debates
NH1 News Replay

NH1 on Twitter

NH1 SkyView Cameras

NH1 on Facebook

Check out NH1 News Rail Polls on LockerDome on LockerDome