Hello, and welcome to World Today!
I'm Jiaweng. Coming up, attendees from over 130 countries have gathered in doubles for the annual meeting of the World Economic Forum.
What are the key issues dominating this year's event?
China has outlined new measures to bolster long -term investment in the capital market.
How will this strategy help restore confidence and stabilize business growth?
Microsoft has acquired millions of dollars' worth of carbon credits to restore the Amazon rank forest.
How effective is this approach in offsetting emissions generated by the growth of AI?
Nearly 3 ,000 attendees from over 130 countries have gathered in doubles for the annual meeting of the World Economic Forum in hopes of finding viable solutions to global challenges in the intelligent age.
While technological innovations such as artificial intelligence are reshaping the global landscape, geopolitical crises, economic fragmentation and climate change still bring great uncertainties.
WEF founder Klaus Schwab says facing such challenges, this year's meeting will foster a spirit of cooperation and constructive optimism.
For more on the highlights of this year's forum, Guan Xing is joining us from Davos.
Guan Xing, thanks for joining us.
Thank you for having me.
What are the key issues dominating this year's forum?
This year's theme is collaboration for the intelligent age, and it really set the tone for the discussions.
One of the hot topics was how to rebuild trust, whether it's between nations or within societies.
Participants stressed the importance of transparency and international cooperation to bridge divides.
And there was a lot of talk about how to stimulate economic growth in this rapidly changing world.
Technological advancements like AI and quantum computing are creating new opportunities, And participants were keen to figure out how to harness these to improve productivity and living standards.
And everyone's buzzing about how technology is changing jobs and what it means for skills.
And governments and businesses need to step up and invest in people, whether it's through better education, reskilling programs or creating new opportunities.
And climate change was unsurprisingly a big focus.
and participants emphasize the need for innovative partnerships and more investment in sustainable energy systems and frontier technologies are also highlighted as a way to accelerate climate action while keeping equity in mind.
And AI was also one of the biggest topics this year.
Leed has discussed how to balance short -term business goals with a long -term need for responsible AI governance, and there was excitement about what AI can do, but also a clear awareness of the risks if it is not managed properly.
We see that Chinese companies are playing an increasingly active role at doubles, signaling a strong commitment to global markets.
How do you see China's influence in shaping global economic recovery?
Right. At the 2025 doubles, China's role is a central focus, especially in the context of global economic recovery and multilateral cooperation.
For example, Mirek Dussek, World Economic Forum's managing director, told me in an interview how China significantly contributes to shaping the global economic landscape.
He emphasized that China is one of the world's largest economies, plays a pivotal role in reigniting global economic growth.
While global growth rates have surpassed 3 percent, I mean, below the trend levels of previous decades.
And China's growth of 5 % of the $18 trillion economy provide a lot of growth and opportunities for global investors.
In particular, China's advancements in trade and technology are noteworthy.
For example, he highlighted China's leadership in renewable energy becoming the largest employer in solar and wind energy sectors demonstrates its global influence in clean energy transitions.
China's contribution in technology, such as artificial intelligence, were also highlighted as crucial.
Meanwhile, China's support for dialogue and cooperation with the multilateral frameworks is essential for addressing global challenges, particularly as participants talking about growing geopolitical tensions and economic decoupling risks.
In this context, China's advocacy for inclusive international frameworks reflects its commitment to preserving and strengthening the global multilateral system.
Well, in an address to the forum, China's vice -premier Ding Shixiang emphasized China's commitment to high -quality developments and sustainable growth, and he has also urged the global community to uphold monolateralism and promote open and inclusive development.
How are these messages being received by the global participants at the forum?
I think these messages are well received.
Many attendees praised the Dean's reaffirmation of China's commitment to true multilateralism as the framework for addressing global challenges such as economy fragmentation, climate change.
His emphasis on using multilateral cooperation as a golden key to resolving international issues resonate with many European and developing countries.
Many industry leaders welcome China's willingness to collaborate on AI governance and its investments in digital infrastructure for developing nations.
And these reiteration of China's commitment to achieving carbon neutrality by 2060 and its contributions to the renewable energy sector were widely acknowledged.
Many participants applaud the China the proactive measures and its call for international cooperation to ensure an equitable energy transition.
And his discussion of China's economic reforms and efforts to create a fair and open business environment for foreign investors was also noted positively by global CEOs here.
How are the participants you've interviewed prioritising sustainable solutions and mitigating environmental risks while promoting economic growth?
That's right. Sustainability is often at heart of many discussions here.
For example, in my interview with the CEO of Eurasia Resources Group, his shared insights on how companies and nations are working towards these goals.
For example, he emphasized that it has a very strong partnership with China, which is leading the clean energy transition with massive investments.
For example, the company produces key resources for China's green industry.
And these collaborations not only support global sustainability efforts but also show how green growth can align with economic expansion, creating a wing way for all stakeholders, including the company's shareholders.
Meanwhile, Hong Kong Exchanges and Clearing Limitages Chairman Carson Tong shared with me how the exchange is playing a pivotal role in driving ESG initiatives and supporting companies in their decarbonization efforts.
The exchange aims to position Hong Kong as a key financial hub for raising the necessary funds for zero carbon transition and it is leveraging its strategic location to attract global ESG focused investors and that will provide the capital much needed to support sustainability initiatives across the region.
Meanwhile, they're also at forefront of promoting ESG transparency, fully complying with the global ISSB disclosure requirements that ensures that companies listed on Hong Kong X meet the highest benchmarks for ESG reporting.
Well, as you said, the theme of this year's forum is Collaboration for the Intelligent Age.
What cross -sector collaborations in light of the emerging technologies are expected?
The potential is immense.
The convergence of expertise, resources, and perspectives from different sectors allows us to tackle complex challenges and that no single organization or industry could achieve alone.
There are many cross -sector innovations discussions here.
For example, according to my conversation with Sino Bao Farm CEO, the company has been at forefront of integrating artificial intelligence into its operations using it to accelerate drug discovery and optimize manufacturing.
Another example is agriculture and finance.
Financial institutions and agricultural enterprises can collaborate to create AI -driven tools for crop monitoring, yield prediction, and also micro -lending to farmers.
is also on the energy and transportation sector.
AI is enabling smarter energy grids and the electrification of transport networks driven by the partnerships between utility automakers and tech firms.
MacKenzie's China chairman told me that businesses globally are intensely focused on integrating AI with boardrooms and management meetings dominated by discussions on how to leverage AI effectively and companies that successfully transitioned from experimentation to impact for AIs to emerge as industry leaders.
How do participants view China's economic outlook?
And what are the areas they hope to cooperate with China?
Well, at the Davos Forum, participants expressed a generally optimistic view of China's economic outlook.
and highlighted several key areas for cooperation with China.
For example, Eurasia Resources Group, CEO, emphasized China's 5 percent GDP growth is a massive figure in the context of global economic uncertainty.
He noted that this growth not only reflects China's domestic resilience, but also its ability to drive regional and global economic activity.
China's leadership in clean energy is also providing opportunities for cooperation with global companies.
For example, China's $900 billion investment in clean energy in 2023 was highlighted as the defining factor in global energy transition.
China also has dominance in solar panel exports, wind turbine production and investments in energy storage technologies.
These are all areas that foreign companies are eager to cooperate with China.
Meanwhile, Pakistan finance minister told me that he aims to tap into China's Pandar bond market.
It is the second largest and deepest in the world as a vital source of capital to support Pakistan's companies and help with their economic stability and development.
And beyond financial support, China's role in agricultural innovation was also seen as an area to deepen cooperation with Pakistan.
Around 1 ,000 Pakistani students will be trained in China to learn advanced agricultural techniques, including vertical farming to enhance Pakistan's agricultural productivity.
Thank you. That is Guan Xian joining us from Davos.
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I'm Zhang Ying. Chinese financial authorities have unveiled a plan for encouraging medium - and long -term funds to enter the capital market to further stabilize stock performance.
The China Security Regulatory Commission says public offering funds have to increase their A -share holdings by at least 10 percent annually over the next three years.
For commercial insurance funds, the Commission says it encourages large state -owned insurers to allocate 30 % of their newly added annual premium incomes for A -share investments starting in 2025.
For more, we are joined by Professor Liu Baocheng, Director of the Center for International Business Ethics at University of International Business and Economics.
Professor Liu, thanks for joining us.
Hi. It's been a pleasure.
So, how do you see these measures impacting the stability and growth of China's capital market in the long run?
Well, I should say these measures are targeted both for immediate considerations to shore up, stabilize the market performance of the Chinese stock exchanges, and the other is to look at long term stability, by ironing out the number of factors that continue to fuel the volatility in the stock market performance, and at the moment, the institutional investors are still hesitant, you know, whether they really wanted to push for a large inflow into the capital market and whether they want to really stay for a longer period of time so that they can really make a long plan for a more sustainable gain.
So their confidence needs to be further injected.
Now these new measures are there to correct some of the speculative forces so that we are able to achieve a long -term stability and the growth.
And more importantly, it is there to, intended to support the real economy by channeling through the funds.
They are attractive from the stock market, from the insurance funds and many other financial derivatives to be really there to support the Chinese real economic growth.
Well, one key part of the plan is to increase the scale and proportion of A -share investments with public funds expected to raise their A -share holdings by at least 10 % annually over the next three years.
How feasible is this target and what kind of market response do you expect?
Well, this is really a very ambitious plan, but it is not really unattainable though.
The whether the we are able to really achieve such a target, it depends on number of factors.
First, whether the regulatory support and incentives for fund managers are enough to, really, to make alignment between different expectations and behaviors towards a common goal.
The other is the continued market conditions, because, after all, capital will be there to be translated into real productivity, so that they can really have a stable return instead of speculating merely on the money market or stock exchanges.
changes. And so pretty much depends on the investor's appetite.
Now investors have lots of money and now what they really need is to see the stabilization of the broad economic performance, and also really wanted to see that there will be more reforms that will be there to deliver on the doorstep in order to boost their confidence.
So if this is really well implemented, it could really signal confidence in domestic equities and attract more of the retail investors than foreign funds, and particularly driving up the valuation and liquidity of the stock market.
So it requires a concerted efforts.
and also all the stakeholders must be able to move in the same trajectory.
Well, John, as large state -owned insurance companies will start allocating 30 percent of their new premiums to A -share investments from this year, what effect do you think this will have on the stock market and how important is it for long -term capital flow?
Well, this measure could really act as a game -changer for the A share market because the state -owned insurance companies are huge.
They have a large amount of capital and also they are more responsive to the regulatory measures and also policy directions.
So with a more significant and consistent flow of the capital from the large SOEs.
They will be expected to have a strong and stable demand for equities, particularly for the Blue chip and the high growth stocks.
And they're going to really enhance the liquidity, which can really improve the market depth and reduce the cost of capital for those listed companies.
So in all, I could see the long term effects would be really crucial for fostering the institutional participation, which tends to bring better governance of the companies and also bring better transparency to the market.
The new plan also emphasizes long -term evaluation cycles for funds like pension and Social Security funds.
How critical are these changes in promoting long -term stability?
Shifting the evaluation of pension and social security funds to a long -term cycle, it aligns with the Chinese strategic intention for stabilizing the performance of the stock market and also will be able to incentivize the investor's confidence for sustainable growth rather than, you know, going for short -term gain.
And it is there to able to promote more stable inflow into the capital market, both from domestic sources and global sources, and also encourages the fund managers to be more focused on the quality of the investment rather than going for speculative opportunities.
So the worst time I think these changes can really boister the market stability and reduce the speculative pressures so that you know all the participants be it institutional or invest in the videos they can really you know be able to expect a more mature investment ecosystem.
Well the long -term strategy behind these capital injections is very clear, but how quickly do you think we'll see measurable results in terms of market performance and broader economic recovery?
Well, it is very hard to really to make arbitrary expectation.
However, pretty much depends on the investor sentiment, whether they are able to adjust interest to the influence of long -term capital.
And it also depends on the microeconomic recovery together with the global market conditions.
And also, pretty much depends on the complementary for measures that are able to support the sustainable management and also the transparency of those companies.
So, but after all I could see that more or less within a half year the stock performance can really improve on the financial market, but you know how this is gonna be really directed to support the real economy so that people can really have a long term but sustainable return on investment pretty much depends on the implementation measures that are also exerting the concerted efforts to support such sort of plan.
Well, how do you see the balance between short -term market fluctuations and the need for long -term stability?
Like do you see these initiatives provide enough safeguards for investors during volatile periods?
Well, short term volatility is very natural and even necessary because people have different expectations of what is lying ahead.
And there are also hot money and there are cooler money to deal with it.
But the regulators would like to see a more long -term stability and the volatility in the short term will not really get out of the line way.
And so, therefore to ensure the safeguards on there needs to be a continuous regulatory oversight and also more of the training and the more measures for the companies to have a more robust, the risk management mechanism.
And then there can be further expansion with regard to the hedging tools in order to promote diversification, so that volatility can be more or less in and out to support a long -term balanced approach." Well, how do you assess the potential of this new implementation plan in terms of attracting more foreign investors to the Chinese capital market?
Yeah, I would often use analysis that all capital, be it foreign or domestic, they are like birds, It depends on what type of trees you grow and how you really preserve a forest, so that the ecosystem system is adaptive and attractive to those investors.
So these measures are there to give a very strong signal to global investors that China, China's first Chinese economy is still growing faster enough, with around a 5 % growth rate.
And then China continues to open its market access, so that the investors can really have the opportunities.
And then China is also having a growing middle class, and also with more of the high networks of those individuals that require more of their asset management.
So these are really the opportunities.
Again, how this money is going to be there to support the Chinese economy, it depends on a host of measures so that the investors are able to invest into more of the equipments and expand more of the job opportunities by either IPO or borrowing from the financial market or another very important issue.
But we have to wrap up here.
Thank you Professor Liu Baochung, Director of the Center for International Business Ethics at University of International Business and Economics.
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I am Zhao Ying. German Chancellor Olof Scholz has visited Paris to meet with French President Emmanuel Macron.
The two leaders pledged to act toward a strong Europe.
Scholz said Europe will be a constructive and assertive partner, adding this position will be the basis for good cooperation with the new American president.
Macron caught on Europe not only ramp up defence spending but also develop its own industrial base.
US President Donald Trump said on Tuesday say that the European Union is very bad to the U .S.
threatening tariffs to get fairness from the bloc.
Joining us now in the studio is my colleague Ding Hung.
Thanks for being here.
Hey, Dao Yin. So in their meeting, Shao Semachron acknowledged that the new U .S.
president will be a challenge.
So what are the aspects where you believe Trump might represent a challenge to Europe?
The first challenge is on security issues.
Compared to Joe Biden, Trump has a very different understanding on security issues including the role of NATO and the war in Ukraine.
Now, Washington pushing its European allies, NATO allies, to increase the fan spending is nothing new.
We saw this during the first Trump administration and even earlier than that.
However, at a time when governments across the EU are facing economic turmoil like high interest rates and a cost of living crisis over there, such a push from the Washington side on defense budget will be a headache for European countries.
The second challenge is on trade and economic ties.
Things will become more transactional between Trump's America and the EU.
The underlying message of Trump's America First agenda is that the European interests lists are not something he very much cares about.
Somehow, I think the threat from Trump to buy Greenland or even use military force to seize Greenland represents another layer of challenge.
Trump does not seem to care too much about sovereignty of other countries.
So we have seen both Germany and France warning Trump against the threatening Greenland.
And then, last but not least, Trump will harden this ongoing, existing political division on the European continent.
The US Republicans have a tradition of railing against the EU bureaucracy and seeking instead to deal with European countries bilaterally, and also the surging far -right forces in Europe.
Trump. They are like minded people.
They see eye to eye with each other on many issues especially on immigration.
This could be a challenge for the traditional political forces in European countries that are seeking to curb the rise of the far -right forces.
Well, in terms of trade, do you think Trump is serious in terms of imposing new tariffs on the EU and how would we do this is the impact of these potential tariffs.
Judging from his first term in office and Donald Trump very much cares about America's trade deficits with other economies.
So if this kind of mentality continues into his second term in office, then he will surely impose tariffs on European countries.
In 2023, the EU exported more than 500 billion euros worth of goods to America while importing 340 billion euros of goods from the US.
So in other words, the EU has a comfortable surplus with the US in terms of trade.
Actually, if you check on the individual EU countries, all 27 of them, 20 of them have a trade surplus with America.
The economic heavyweights of Germany and Italy are ranking at the top in this particular regard.
Then, with regard to the impact of potential Trump tariffs, in this regard, we have not seen too much publicize the data analysis regarding the overall impact, it.
But on the auto industry, which is a pillar in terms of the trade between the U .S.
and the E .U., Oxford Economics has conducted a modeling study.
The prediction is that, suppose we have a 25 % American tariff on the E .U.
auto industry, then it would eventually lead to a 6 .6 % decline in Italy's auto exports, and a 7 .1 % decline in Germany's auto exports.
Another point I want to make here is that tariffs on European goods are not the only thing that will harm the European economic interests.
For example, if Donald Trump goes ahead to impose additional tariffs on China, China, which is a major trading partner for the EU, then there will be some bad consequences for Europe.
Because globalization means trade and economies are interconnected.
Well, do you think emphasizing European unity, ramping up defense spending and developing its own industries will be an effective path for the EU to cope with the possible challenges of Trump 2 .0?
These are good slogans, for sure.
But in the meantime, I guess there are questions regarding how far these agendas can go.
Unity has always been a problem for the EU because in a block in which you have 27 member countries, it's always difficult and challenging to speak with the same voice.
That's undeniable. In terms of developing industries, there is actually a widespread complaint about burdensome EU bureaucracy or individual EU countries' bureaucracy that is somehow stymying the corporate level innovation.
But that being said, I think overall, it is encouraging to see the EU attempting to pursue strategic autonomy.
In addition to seeking solutions from within, I think the EU can also look to elsewhere in terms of creating buffer zone against the certainties of Trump 2 .0.
For example, when we talk about defending globalization free trade, China is a like -minded partner for the EU.
Stability is a main characteristic in terms of Beijing's policy towards the EU.
China views European countries as a key player in a multi -polar world order.
China pursues a relationship with Europe that neither targets any third party nor is subject to interference by any third party.
These Chinese mentalities have remained unchanged for a very very long time.
Both France and Germany are suffering from internal chaos, and France has had four different Prime Ministers in just one year amid a budget impasse and ballooning deficit.
Germany is also facing its own budget crisis, and Olaf Scholz has been forced to call a snap election that he is almost certain to lose.
So how do you think their internal problems might impact the EU's capacity to respond to the challenges of Trump 2 .0?
The negative impact is undeniable.
But in the meantime, it's not impossible for EU countries to overcome these challenges and the negative impacts.
In France, Emmanuel Macron will continue to be this country's president for quite some time.
And he has a big power when we talk about foreign policy of France.
Frederick Merz, who is likely to become Germany's next chancellor, is already in contact with Paris with President Macron himself to try to coordinate policies on trade and security.
He has also made it clear that if Trump imposes tariffs on the EU, Then, there is definitely a need to respond.
If history is of guide, when Trump imposed tariffs against European steel and aluminum back in the year 2018 during his first term in office, we saw the European government largely coming together for a common response.
Thank you, Jing -hung.
John has said it has not participated in the management and operation of the Panama Canal and has never intervened in the canal affairs.
Mao Ning, a spokesperson with the Chinese foreign ministry, made their remarks in response to U .S.
President Donald Trump's statement about retaking Panama Canal.
Mao said China consistently respects Panama's sovereignty over the canal and recognizes the canal as a permanently neutral international waterway.
For more on my colleague, Gao Yingxie had a talk with Wang Jin, associate professor at Northwestern University in Xi 'an, China.
Before we dive into the issue, could you give us a bit more background on the history of the Panama Canal and its relationship with the United States?
And the channel could go back to the early 16th century, when the Spanish people, Spanish colonies, they believe that it is very necessary to construct such a candle.
But given the technical and engineering tech difficulty, it is not realistic at that time, but the design or the plan of constructing the candle has already been lasted for several centuries.
countries. And in the late 19th century the France people and they decided to try to construct this tunnel, but it actually takes several decades.
I mean nearly three decades, and with the cost I mean hundreds of thousands of local people's deaths, as well as the constructors and the workers transported from Europe, transported from Africa as well as the employee from the local people.
So this actually, the kennel, that constructed based upon the blood and the life of the different peoples of the colonies.
But Azul, the French people, they have already tried a lot, but the French colonies, they were not able to successfully make the deal given the technical difficulties as well as the engineering the difficulties and finally led to the very serious economic difficulties, and of course it also led to the very much more serious relations and dangerous relations between the French companies and the local government.
So finally at the very early of the 20th century in the United States, they try to construct this, they try to get hand into the kennel and try to start their constructions of the kennel.
So at the very beginning that the United States, we have to say that they succeeded and they continued the project and succeeded, then finished the constructing of the kennel and then through the kennel, Panama Kennel, United States try to expand their political influence in South America, and also through this canal, the United States could balance its relations, as well as the naval forces between Atlantic, as well as the Pacific, so that is why from the United States, it's a very very important canal.
But then given the very important the candles, this important value has been also recognized, had been also gradually recognized by the local people as well as the local countries.
So that's become a very important political issue with strong sensitivities between the United States and the local people, particularly with Panama.
So, after the Panama construct was successfully constructed in the 90s, in the 1930s and the relations and contents over who should own the Panama Canal has become the hotly debated issue and lasted for nearly one century.
I mean gradually after the Panama got independence and the US we got Panama people and the society, they try to win the panel from United States hand, a lot of political movement, social movement, were organized and led to further political computation with United States.
And in the 1970s, the United States signed a deal with Panama leader and then the United States withdrew from the Panama Canal and then they gradually the Panama government had the authority or the 100 % of the authority over the Panama Canal.
and then before the deal was finalized in the 1999, the Panama authority or Panama government transfers this kennel with a contract into the Chinese company, Chinese Hong Kong company.
So that's in a very brief history.
So that's why we have to summarize on the one hand, the Panama kennel is important kennel with geopolitical and geographical importance, and on the other hand, it was constructed it, based upon the blood, and the lives and the sufferings of the local people.
So that is why Panama, when we are talking about Panama Canal, it is not just the canal, it is also the strategic channel, and it is also talking about the suffering history of local people by the humiliated colonies, and sometimes the United States, towards local countries.
Right, that's a really comprehensive one.
Trump has claimed that China is running the now?
If there are any truths to that, does having two poles near the canal really mean China is in control?
I think when he talks about so -called China's control, I think he is talking about Chinese companies, the economic and management relations with Panama Canal.
We cannot say that But when the company has a foreign investment background with a connection to the local issues, we then would define it as so -called some other countries owned or some other countries running it.
Because for example, when we're talking about Alaska, a lot of companies in the United States, they have other countries that so -called the investment or other countries' management.
Then we cannot say the other country controls the United States, or the other country is running the United States.
That's of course ridiculous.
I think no matter what countries the companies come from, they're managing or running the panel belong to the Panama people.
You said that Donald Trump is trying to intervene in the canal issue.
In terms of that, so, what specific goal or any kinds of objective?
he want to achieve I think he wants to achieve the goal of on the other hand finding excuses to or seeking excuses to intervene into the Panama state in running or daily management affairs because would describe that okay is is not the Panama government or Panama people running the company or running the cannot so that United States could have the excuses to say something and On the other hand, he's finding some excuses, not targeting Chinese companies, not attacking Chinese -Hong Kong companies.
That's just the surface excuses.
What he really wants is to try to, as we mentioned, that he's really wanted to get the Panama scandal back to the hands of the United States.
Because in history, I mean, after the decades of computation, a very difficult clashes between the Panama people and the people from South America with United States, that after the suffering of a lot of people's deaths, and then the Panama went back to the hands of the government and the Panama people.
So right now the United States wants to redefine the fact and want to redefine what is happening and just want to seek the opportunities to take it back, take it back, take the panel back to the hands of the United States government.
That is why I think this is the real goal or real objective of the US government.
Yeah Panama has already rejected Trump's role to take back the canal, and the audience of Hutchinson seems to be part of an effort to counter Trump's claims.
So what do you think could happen next in this situation?
I think there were...that depends on whether the United States' own willingness or the United States' own determination, particularly the United States' Donald Trump administration's determination.
If they really wanted...in history, the United States always wants to do something that actually ignores international norms, international regulations.
It is just to respect their own willingness and their own interests.
So that's why the United States may be on the one hand, we hope that it's just a finding some excuses, just finding some kind of the reasons to try to get into a ring.
But when it faces very strong resistance, maybe the United States gave up.
But on the other hand, maybe the United States would insist on their own idea, insist on their own goal, and try to take it over.
So through military affairs or military ways, or maybe other diplomatic pressure.
So, that is the thing that we have to be very alert to.
And I think from Donald Trump's political tradition, and his diplomatic tradition, I think that's maybe the latter manner.
I mean through the coercive, or through even the military manner, to get intervene and to take it over, I think it is much more likely.
That is Wang Jin, associate professor at Northwest University in Xi 'an China, speaking with my colleague Gao Ying Shu.
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I'm Zhao Ying. Microsoft will pay to restore parts of Brazil's Amazon and Atlantic forests in exchange for millions worth of carbon credits.
efforts. The company becomes the largest big tech player to bet that nature -based solutions can offset an artificial intelligence -driven surge in greenhouse gas emissions.
Microsoft has signed a deal to buy 3 .5 million credits over 25 years from a Brazilian startup, which buys up farming and cattle land and restores the land by planting native tree species.
The projects are financed through carbon credits and timber sales.
Market analysis suggests the deal could be worth around 200 million USD, making Microsoft one of the biggest buyers of nature -based carbon removals globally.
For more, we are joined by Dr. Zhou Mii, Senior Research Fellow with the Chinese Academy of International Trade and Economic Cooperation.
Dr. Zhou, thanks for joining us.
Good evening. So, to begin with, can you explain how the rapid development of AI, particularly with the growth of generative AI technologies, is contributing to increased energy consumption and environmental pressure?
Yeah, we know that this kind of very new model is very widely accepted and used.
So I think that is, when we are talking about that, I will say that it generally can be put into two phases.
The first phase is that when they are going to train a model and it is the process to formulate a model.
So they have to feed them the computers with so many different datas and try to use maybe billions of parameters and trying to generate a model to be used.
And the second phase is when this model has been set up, so they are trying to accept the answers, the questions, and they give the answers.
So in this process, they also need to consume a lot of electricity to generate the answers to feedback to those who are going to ask these questions.
So this Microsoft's deal with the Brazilian company Regreen focuses on nature -based carbon removal through forest restoration.
What do you make of the effectiveness of this model as compared to more tech -driven methods such as carbon capture and storage?
Well it's hard to see just from now because when you are compared with that's too measured.
I would say that the nature would be one of the best ways that we are having to restore the carbon, I mean, in the natural ways.
So in the past maybe millions of years, we have changed gradually on the atmosphere structures.
I think it's definitely the reason why we have see the green plants even for the forest.
But I think it's still our problem when are going to discuss the effectiveness of this message because when we are using this forest to try to make the carbon to store, I think that we have to depend on several other factors.
Like when you know the people living in Brazil, they have to try to feed themselves.
So they are developing the agriculture and they also need to build the cities and also the roads and industrial parks.
They do also need the lands.
So the competition between the different ways are trying to compete with each other about the land usage.
And on the other hand, we have to relay not everything on the forest, because the forest is also one very important source for the carbon after the death.
So when they are going into the fossil fields, they still be another source of the carbon in the next futures.
Yeah, but how transparent is the carbon credit market in ensuring the actual impact of these projects, like how can consumers or investors trust that their contributions are genuinely helping reduce emissions.
I don't think that there are mechanisms so transparent because people do not know what will happen even after they bought this emission quota or trying to restore certain kind of forest.
So I think that it's very necessary for us to trust, trying to make it not an international standard, but also we are trying to make it clear on what kind of method that we are going to believe that even the big companies are trying to buy some quota.
So, and it is also important for us to know if the people are willing to give their land for the reforestations, how can we benefit from that?
So there are so many things that we need to understand just in not coming from one example of the company We need to base down several examples and trying to find out what are the best way for the people locally and in other countries.
OK, so with the rise of AI -driven emissions, do you think carbon offsetting will become a long -term strategy for industries?
Or is there a risk that it could become a get -out -of -jail -free card for large corporations like Microsoft?
Yeah, in my understanding we have to believe that.
We have to do something.
Even, you know, when the large companies are doing that, I think it's good news that they are taking responsibility by doing something to pay back what they have contributed to the global warming.
But it's not just like you say that they're free of the geo -card.
I don't think that it's necessary to see that if they did that, they can get that treatment.
Because we still have so many questions, and we will not have the answers.
maybe after decades of using of these AIs we may find that is terrible thing about the carbon emissions and we may not have enough time to deal with that problem.
So I think that is also important for us to know that every stakeholders should be involved in the process when we are developing the AI not for the usage of the daily life but also the climate, the environment, we have to know that everything should have some voice in the procedure.
Yes. And also, the pricing of carbon credits is expected to rise significantly in the coming years.
And already companies like Microsoft are paying above market prices for high quality credits, so could this lead to a situation where only the wealthiest corporations can afford to offset their emissions properly while the smaller companies are having fewer options to make an impact?
Definitely. In my understanding, that is also a problem.
That is a problem between the financial resources and abilities of dealing the challenges.
So the small and medium -sized enterprises, they are faced with so many problems like the technology disadvantage, the market disadvantage.
But if they are not able to just offset what's their carbon issues, I think that there would be another disadvantage for those companies.
And when we are seeing the artificial intelligence, they are developing so quick.
So we can expect that there are these big companies like Microsoft.
of that they are gaining too much from this input for artificial intelligence.
But how can we make it fair to treat everybody just maybe not the same but similar?
I think that is something we need to understand and we should try to fight for.
OK, thank you, Dr. Zhou Mi, Senior Research Fellow with Chinese Academy of International Trade and Economic Cooperation, and that's all the time we have for this edition of World Today.
To listen to this episode again or to catch up on previous episodes, you can download our podcast by searching for world today.
And for further discussion, you can also follow us on Netflix, It's CGTN Radio.
I'm Zhao Ying, thank you so much for listening, see you next time.
