The Great and the Good gathered on a Swiss mountain take a positive stance

DELEGATES at the opening of the World Economic Forum in Davos have taken a positive view of the global economic recovery, with few now fearing a return to recession.

But the consensus among business leaders, politicians, and economists was that growth would be powered by China and other emerging economies, while Europe would suffer from sluggish growth and unemployment as a result of its fiscal tightening.

In fact, with China overtaking Japan as the world's second-largest economy last year, panellists questioned whether terms such as "developing" and "emerging" still applied.

Economist Nouriel Roubini, one of the luminaries on the forum's opening panel yesterday, warned that in the US and Europe, growth remained low and unemployment high.

The US still faced a property crisis and inspired little faith in its ability to tackle its deficit and debt, while in Europe markets have forced austerity measures that endanger growth, he said.

"There is a global economic recovery," said Roubini, who gained renown for predicting the financial crisis of 2007/8 and a few months ago was still warning against the possibility of a "double dip recession."

He noted that balance sheets were strong, confidence was rising, and the availability of credit has increased.

China and India have both sent their biggest ever delegations to this year's forum, which has some 2,500 participants.

Zhu Min, former deputy governor of the Bank of China and now a special adviser to the IMF, cautioned that growth figures obscure huge expectations among the poorest in the developing world that cannot be met.

Min said billions of people in the developing world wanted "an American life, a big car, pension … But it won't work because we don't have the resources. It will be necessary to come up with a new model."

Workers in the west, on the other hand, seem destined to have unemployment to contend with.

The general consensus among the chief executives present was that the most promising job markets are in the east, whereas Europe had a serious problem with youth unemployment, with no obvious solution.

Lars Olofsson, chief executive of Europe's largest employer, retailer Carrefour, said: "In terms of quantitative growth, I don't think the west can do anything."

Business leaders in Davos welcomed US President Barack Obama's state of union speech, in which he addressed the question of the United States' gaping budget deficit.In a speech on Tuesday Obama offered corporate tax cuts and a five-year partial federal spending freeze that he said would cut $400 billion (275bn) from budget deficits over a decade.

The consensus was that the US, which has so far not implemented austerity measures, would benefit from stronger growth than Europe in 2011.

But the US national debt, set to reach its statutory limit of $14.3 trillion by 31 March this year, is a source of jitters among investors.