History may well repeat itself at forum

As Europe battles the wintry gloom, a sense of uncertainty is shrouding the continent and sending a deep chill into economic forecasts.

The European Central Bank is poised to announce a round of quantitative easing at its policy meeting on Thursday, in the wake of the Swiss decision to scrap the franc's exchange rate cap with the euro. The Greek election on Sunday and the lingering geopolitical tension in Ukraine do little to warm the climate.

At home, China's stock market has just witnessed its steepest fall in six years, following a crackdown on speculative credit, adding to an unsettling outlook for capital markets.

A more relaxed credit line is expected in 2015, but disagreements remain as to when it will occur, and to what extent. The wait-and-see mood has gripped some officials of local governments and State-owned enterprises amid sweeping anti-graft efforts and upcoming reforms targeted at State-backed companies.

Premier Li Keqiang, the first Chinese premier to set foot in Davos since 2009, is on a mission to clear away at least some of these doubts. A strong statement on China's path and determination, and how its efforts could benefit global investors, especially those from Europe, are widely expected in his talks with the International Business Council of the World Economic Forum and his address to the annual meeting on Wednesday.

There are some points that Li should possibly touch upon. He could elaborate first on how the government is planning to avoid the bursting of the real estate bubble, and its plans to contain local government debt. He may also discuss efforts at deleveraging that could both stabilize financial markets and ease lending costs for small businesses. Foreign investors would be pleased to hear that more sectors, such as services, finance and healthcare, will open further in 2015 to both domestic and foreign companies.

But the most important message the Davos audience is seeking from Li is a commitment that the Chinese economic system faces no immediate risks, and that these midterm problems will be tackled through the process of reforms.

When Li's predecessor, Wen Jiabao, visited Davos in 2009－weeks after he issued the 4 trillion-yuan ($652 billion) stimulus package to counteract the financial crisis－he quoted a famous Chinese saying, that faith is much more valuable than gold during an economic crisis, when he met corporate leaders. To that extent, history may repeat itself.