Klaus Schwab has long been optimistic that China is on the right path. But as the country enters what many are calling a new normal of medium growth, the 76-year-old founder of the World Economic Forum thinks Premier Li Keqiang needs to let the world know that China will continue to drive the global economy.

 

When the annual event takes place from January 20 to January 24 in Davos, Switzerland, Li will join dozens of government leaders and 2,500 participants from more than 140 countries to discuss the world's key economic challenges.

 

"With sluggish global economic development, we can't assume that China will remain unaffected."

It will be crucial to find ways to "unlock China's growth potential in a balanced and sustainable way", he said.

 

For China and the world, it is paramount that the country's economy remain stable and continue to grow.

 

"I applaud the efforts the Chinese leadership is undertaking in this regard. The transition from mass production to innovation-driven growth is underway, but challenges remain."

 

"We are confronted by profound political, economic, social and, above all, technological transformations. They are altering long-standing assumptions about our prospects, resulting in entirely new parameters for decision-making."

 

Because this is a global phenomenon, China will not be spared from those challenges, economic or otherwise.

 

Schwab expects China's leadership will have to further strengthen social inclusion and work on mitigating the risks of fast economic growth and urbanization.

 

Switzerland and China have signed a free trade agreement and Schwab said he welcomes this step toward economic integration and the promotion of free trade.

 

While limited in size, Switzerland can be a good partner to help Chinese businesses make the transition from exporting mass goods to creating more value through high-end goods by emphasizing innovation, research and development, he said.

 

"Switzerland, in turn, will benefit from better access to China's fast-growing middle class."

Schwab also said China and the EU should act faster to forge free trade ties.

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