Transcript of speech with editing

ZHU Ning,IFF Co-Secretary General, Deputy Dean of the Shanghai Advanced Institute of Finance of Shanghai Jiao Tong University:

Today's discussion serves two main purposes. First, this is the best opportunity for our forum to discuss the pressing issues we all share. As we have heard before about "One Belt And One Road", decoupling of financial services, the difference between debt, capital markets and bank financing, and of course hopefully there will be more topics, Suggestions and speeches, which is how do we balance short term and long term?

At the same time, I hope that what we're talking about today will very likely be the basis for research in 2020.



Shaukat Aziz,IFF Co-chairman, Former Prime Minister of Pakistan:

I was the prime minister of Pakistan, and when I was prime minister, we also started several projects on One Belt And One Road. I think in this world when you start a new project, it's new, it's innovative, it's done by people you haven't seen before, there's going to be some criticism, there's going to be some distrust. Everyone will feel may originally have no, so don't feel too good, I in the banking industry has many years of experience, if is good, the feasibility of the project is a good plan, I think this project have reasonable investment income, in fact, every country has experienced such a cycle, you don't need to repeat the same path, I think is by the host country, donors, active participation in each country, each other to share their experiences.

There is no unique way to do a project like this, and the approach is very consistent. We see the world bank and other organizations are doing the same project, we are also follow their methods, and I think all the way "area" project in Pakistan and other standards are very similar, we are all follow the same principle, we see them the same parameters, where we're going to see, to see it behind some of the core, the strength of the building. For example, we have some committees in Pakistan, and you can only pass these projects after going through these approval processes. I think we should not be particularly hesitant attitude, because we need to do the feasibility study will conduct an infrastructure project, I think the problem is very obvious and I'm glad to you put forward this problem, I think we should talk openly, because we only know these principles, know we have respect for the principle, the rationality of know it. I know that Pakistan and other countries have similar committees where we discuss and then agree to a project.



Deborah Lehr, IFF Board Member, Vice Chairman and Executive Director of the Paulson Institute:

I come from the Paulson Institute, and the chairman of our Institute focuses on the relationship between China and the United States, and at every core of the relationship between China and the United States. Our former chairman, Henry Paulson, also came to the Beijing meeting to talk about the disconnect between China and the global economy. I am very happy to see that the IFF is also paying attention to these hot topics. Of course, sino-us relations may be quite tense. I also hope that you can pay attention to these issues through such a forum.

One of the biggest concerns in Washington is the discoupling between the financial industry. Many Chinese companies listed in the United States, like these pension funds in the United States, how do they invest their money in the United States? We are also very concerned. Because the government should not interfere with how the private sector invests, as long as it can follow the same standards and not threaten national security, it should invest aggressively, so I think this forum should focus on these facts, let's raise awareness of these things. In fact, I think these things are very critical, because it is involved in many industries, but also for international organizations, we represent the many different countries, we can find areas of cooperation, can be climate change or global governance, financial governance and capacity building, are worthy of our work together. I also support colleagues, colleagues in the United States have just told me, we should realize that we are doing in the United States, we can help organizations focus on these issues with each other, like we are cooperation with IFF Mr Paulson's foundation, and other international organizations together, like the IMF, world bank, autumn's summit, hope everyone to participate in together, let everybody realize that China's government, China's private sector in what to do.



Alessandro Golombiewski Teixeira, IFF Board Member, Former Special Economic Advisor to the President of Brazil,Former President of the World Association of Investment Promotions Agencies (WAIPA):

I was deputy minister for investment in Brazil, and I actually think today's discussion is very important. He has spent the last 16 years working in government, in different positions in the Brazilian government. As a Latin American, especially at this juncture, I think Latin Americans see the key to the world, the key to the situation. It's important that you talk about a couple of things, and one of the things that's important is my own responsibility, as a director, to engage more with Latin Americans, not just the governments of Latin America, but I think our top leaders should interact more actively. I think we don't have that kind of forum and discussion in the world, where we have very important people who have great expertise and experience in politics, business, economics.

I think the future of the IFF could indeed play an important role in the world economy, especially when it comes to Latin America. We are very skeptical about international organizations, like Latin America, and how the United Nations and international organizations are going to help the rest of the world. We want to better integrate the public and private sectors. I have some Suggestions of my own. My own personal feeling is what role can I play? The first is to discuss international trade and trade finance. The WTO is the leading organization in this field. The WTO is also talking about how we can reform the international trading system. For example, what are the mechanisms for trade, especially for developing countries? This is something I think should be paid attention to.

The second element is the Belt and Road initiative, the "One Belt And One Road" initiative, especially for developing countries, for Latin America, we don't really know how Latin America is involved in this kind of initiative, right? In fact, I will explain to you that this is not just a geographical scope, not the scope of the old silk road, but a new platform for cooperation. I think the IFF can play a clarifying role in this. It can explain to you what the "belt and road" is. It is an infrastructure project. I think the IFF can play a very good role in promoting this.    

   

ZHOU Xiaochuan, IFF Chairman of General Assembly, Vice Chairman of the 12th CPPCC:

One of the visions of the International Financial Forum (IFF) is to be Global F20, and Madam Arroyo mentioned our vision of an F20. We recently held the G20 meeting in Osaka, and at the G20 summit, we also discussed some financial topics, such as inflation, and low interest rates, and called for more economies to participate in international financial issues.

There is also a discussion on Libra. I still think that top-level design should be discussed and studied by leaders and experts of think tank. These are some tough questions in the next few years. There is also the question of financial stability, the question of capital market co-operation.

But at the same time, also saw some disappointing trend, such as the G20 they avoid discussing the problem of international trade, although it is well known for many, a trade war is a very worrying thing, especially a trade war with China, although this is a bilateral trade war, but it involves a lot of countries and economies of the world.

Another shame is that the G20 has avoided mentioning the challenge of climate change, or climate-related financing. We hope that in 2020 these issues will be discussed more seriously.
In addition, as Ms Lehr proposed financial decoupling is a very serious trend, we definitely don't want to see, hope to have more financial cooperation or integration and fusion, like Shanghai-Hong Kong Connect and Shanghai-London Connect. There are also some mutual fund was established with other countries, so there are such financial cooperations. But if we think of finance as a political tool, this decoupling might actually happen. This will greatly affect the efficiency of resource allocation. It will become a zero-sum game like a trade war, or even a lose-lose situation, in which all parties are losers. It will even further aggravate the fragmentation of financial markets.

We have seen historically the risks of financial market dispersion, and I would like to think that we can play a little bit more of a role in this, and I think it deserves further study. Recently, some people have read a bill proposed by a U.S. senator to ban some U.S. asset investments in China. I think this restriction is a worthy topic for us to study. If a Chinese company is listed in the United States, does it have the right to audit in a third country? We have always said that we want to encourage a better integration of U.S. accounting standards and international standards, which is to make international accounting standards as integrated as possible, in the hope of better disclosure and higher standards, more uniform standards of auditing. None of this should be a political tool, especially in the face of financial decoupling, where we hope to maintain some progress towards integration. So these are interesting questions and hopefully we can have a deeper discussion and also allow us to consider more activities and work of the IFF in 2020.

The second thing I want to say is that one of the things that we should focus on is that it's pretty obvious, and it's been mentioned in our discussion. What we're going to focus on is what's the most important thing in the world right now, and what's the biggest problem that comes next. Climate change, and of course the relationship between climate change and finance, climate change is already increasing, and the pressure is increasing. The ECB has published reports on the relationship between climate change and monetary policy, as well as the relationship between climate change and the stability of financial markets and financial institutions. In the European market, there is the European investment bank, which is the largest investment bank in the world, although you don't know it, but it is the largest. We are redirecting their investment policies precisely because of the impact of climate change. So I think this topic is worth considering in the forum, which is to think about what kind of contribution we have to this topic, what kind of ideas we have on climate change policy. Climate change is of course humanity's greatest challenge in the coming decades.

And then there's the second topic, which has a lot of subtlety to it, which is that global public and private debt, even more than the banking crisis itself. Not all debt is negative, of course, and I fully agree. But now we have to admit the global debt rises, the public and private debt is not necessarily directly related to investment, therefore, we must realize that we don't underestimate the global financial stability, we want to see a lot of countries have so many bad debts, so I am very worried about the global financial stability, so I think this is a point of this BBS should focus on. We should find a good forum to solve these problems, make the forum more meaningful and useful. Of course, big picture discussions are interesting, but we need to focus on what solutions and contributions we have to the big issues.

The third point I want to make is that I don't think the problem today is a technical problem, a financial problem, an economic problem. I think the biggest problem is a political problem. The same is true tomorrow, where we are affected financially by political decisions and trade decisions, but at the same time, financial markets, monetary policy are also responding to these policy changes. I told myself to explain, we try to make up for, try to subsidies, to see the trend of the recession, some say caused by monetary policy, we have done so much effort, before that I want to ask the question is, in the midst of so many policy changes, we are each to response, is the need for the creation of more and more creative ideas to deal with? Do we have a ceiling on what we can do, what are the possibilities, what are the limits? It's worth talking about, of course, it may not be our biggest concern, but what we need to see is that the root causes of the current problems are political, so we need to see the impact of politics, the impact of monetary policy on financial stability as a whole. And we should realize that many of the problems we face are far beyond the economic and financial sectors and have a great impact on various industries.  

   
Han Seung-soo, IFF Co-chairman, Former Prime Minister of Republic of Korea, Former President of the UN General Assembly:

Although the financial forum is talking about financial problems, of course we need to realize that this is not just a financial and economic problem, our roots are political. Of course, we need to see the relevance of this, we need to see the scope of this, and although the current issue is political, it has a lot of economic and financial repercussions. These are issues that are worth addressing, from an economic and financial perspective, so these issues are critical. But we need to broaden our discussion, we can go beyond the economic and financial issues, we can get to the root causes, and that is the agenda that we should be addressing, and that is the agenda that our secretariat should be addressing.
   
Antony Leung, IFF Vice-chairman, Former Financial Secretary of Hong Kong Special Administrative Region:

I am truly honored to have the opportunity to share some of my insights and thoughts on Hong Kong. In fact, these events in Hong Kong may remind us of some changes that are taking place all over the world. We have street actions and protests in Hong Kong. In fact, there are riots in Chile and Spain. These protests in Hong Kong were triggered by the extradition act six months ago. I would like to mention these trends because I think the forum might consider research.

First, class warfare in the traditional sense. Countries' policies have been evolving as a result of globalisation, technological progress and currency issuance, and we have seen increasing inequality in wealth creation since the days of Reagan and thatcher. Hong Kong is a free-market economy, though it is still a small one, with 0.1% of the population controlling 25% of the wealth in America. According to the data, this has only happened twice in history, once in 1915 and once in 1928. We all know what that means. On the one hand, there is the traditional class struggle. In Hong Kong, we can also see that most young people can't afford to buy a house, so this is a way to explain that they don't pay.

But there is a second, we are like the age gap. Most people in this room today are born in their 40s, 50s or 60s. We were able to meet our basic needs in the postwar period of the 20th century, which was that basic needs like housing and food were met, and we were happy. But the young people, they are born to meet these needs, they have more freedom, they have more appeals to ideals. If we just put their dissatisfaction due to economic problem, we may not offer enough corresponding solution, they may be for the demands of justice, is not the same as the time of their birth, and the way they exchange and communication, social media and we are very different, so we need to know the younger generation to want how to solve these problems. These generational gaps may go some way to explaining these grievances in Hong Kong and elsewhere.

The third trend is the contradiction between different systems. Different systems like democracy plus a free market hybrid economy. China's rapid development over the past four decades has alarmed western experts and leaders, leading to a fear of great-power relations. To a large extent, these grievances can be explained by the economic and chronological divide. The former is the economy, perhaps a trend that our forum can focus on.

Jenny Shipley, IFF Board Member, Former Prime Minister of New Zealand

Some people say we need to focus on finance, and some people have listed some very important financial issues. But at the same time, as we look to the future, I want to emphasize that our financial forum is not the ultimate decision-maker. We have a decision-making layer above us that we can only refer to. We need to be influential and we need to find out which institutions or individuals, like the IMF or which countries' finance ministers, we need to be more specific and use our influence.

I wanted to pose a challenge, and of course I think highly of the work we've done. See you are actively involved in all kinds of BBS, but I also want to emphasize, to participate in an international conference and influence a meeting are two different things, so I want to work in our program, we can add a content, it is in those issues we identified is key, how do we go to take the initiative to influence the development of it. I hope that before the end of this meeting, or even our annual meeting this year, the top priority is to clearly identify what issues we want to pursue most, to make our influence more targeted and purposeful in international meetings, and to adopt a more strategic approach.

In addition, our international finance forum is about the field of international finance, which is a very broad, silk road international alliance focusing on BRI. We may want to talk about the two separately, unless we can decide which role finance should play in international governance, and if we don't, then we can't really have an impact.

There are large Numbers of people in the world who feel marginalized. What strategies can we use to accommodate them more? I think the silk road international alliance is a good platform, because BRI can connect the market economy and people in these different regions. Therefore, there needs to be such a macro planning, and then by the large international financial institutions, including private financial institutions, as well as the Asian infrastructure Investment Bank, the Asian Development Bank, etc., the development of the "silk road" and the financial sector need to strengthen coordination.

In a word, it is indeed necessary to strengthen our technical research, and it is indeed necessary to clarify our research priorities. We need to be more inclusive and more engaged. There is a desire for security, for prosperity, and I think the financial sector has an obligation to turn our attention to this issue. Over the last 30 or 40 years, the financial sector has tended to put its own interests first, and I don't think we're going to be able to continue to decouple the financial sector from the real economy or people's livelihoods in the next 20 years. We need to integrate them. thank you.



Herman Van Rompuy, IFF Co-chairman, Former Chairman of the European Council, Former Prime Minister of Belgium:
  
What is the danger of such market decoupling? That is deglobalization, and financial decoupling is one aspect of deglobalization. The trade side of deglobalisation is also worrying. We have been going in the same direction for so many years and now we are suddenly turning. We are now seeing the globalization of nationalism and discontent. In some areas of improvement, we still hit the upper limit. Of course, we are a financial forum, we are not separate from other aspects of society, we have to focus on the financial side, in this unfortunate, anti-globalization process, we have seen the decoupling of the financial markets, which really makes us very anxious. What we're going to do is we're going to have one or two ideas next year that are worth reflecting on, and that's all I want to say.   

ZHOU Xiaochuan, IFF Chairman of General Assembly, Vice Chairman of the 12th CPPCC:

What are we most worried about? Ultra-low interest rates, financial stability, put them all together and we're dealing with the next crisis. Because now we see some dangerous phenomena in the world, what are the current dangerous phenomena? For example, a trade war, based on historical experience, will lead to a slowdown in global GDP growth, will cause a crisis, very likely to cause a crisis. Second, we see bubbles, and of course we are worried, for example in China, we have a real estate bubble, we have a stock market bubble in the United States, we have a new record, the highest number, and that's what we are worried about.

Then there is the Q1 policy, so many years, so many countries are increasing their fiscal deficits, it is not clear whether this will lead to the next crisis. So on some occasions, in some international discussions, people talk about the possibility of the next round of crisis, but no one knows how feasible, how likely it is. Although the probability is not high enough, we still need to be prepared, we need to learn, because we were not well prepared for the arrival of the crisis in the past, this is a lesson worth learning, so the last crisis lasted a long time. And of course there was the European sovereign crisis, and there were many other subsequent crises.

Of course, we have many tools at our disposal to overcome the crisis. However, we should also note that the environment we live in today is very different from that of the Asian financial crisis in 1997 and the financial crisis in 2008. For example, the adjustment space of monetary policy and fiscal policy is limited. Many economies have reached zero interest rates, especially the euro zone, which has reached a very low level. China is cutting interest rates. Japan, for example, also has a zero interest rate band, and has been doing so for a long time. The fiscal policy space varies from country to country, yet every country faces a dilemma.

The second difference is that in the last financial crisis, in 2009, the IMF played an important role in mobilizing hundreds of billions of dollars in new resources to overcome the crisis, especially in countries that were hit hard. Countries like Cyprus, Greece, Argentina. In 2012 there was a fresh injection of IMF resources, a new capital increase. Now it looks like we now such multilateral organization ability is weakened, we'd like to see when the next round of crisis, and whether we have enough people skills, able to take advantage of the IMF to develop consensus of the G20, to form a favorable tool, let us to make full use of international mechanisms, and the mechanism of multilateral organizations to overcome the difficulties.

Third, I want to talk about financial regulation. In the wake of the financial crisis, the G20 has transformed itself into the Financial Stability Forum, into the Financial Stability Board, with the Basel committee and the IMF setting new rules and new regulatory standards. Increased capital requirements, stress tests, and so on. All of these new requirements are to control the leverage ratio, to emphasize that the whole financial mechanism has to be stable, and I think that's a great direction to go in, but we're also seeing that it's being implemented, and the new standards are being implemented very slowly. While we are recovering, some countries seem to have forgotten the pain and want to put more emphasis on growth than financial stability. So it's still a big question, can we really implement Basel iii and other financial regulatory standards globally?

The last point is debt. Now it's a high level of debt, and China is very worried about that. For example, the debt of our companies, and other countries are facing the same problem, for example, the public debt is very high, these debt problems may cause a new financial crisis. Now it looks like we haven't really deleveraged since 2008, and now we see some new features, some new environments that can handle the next financial crisis, and what should we do if it happens? It's definitely a challenge, for the politicians, for the financial community.

The IFF is a financial forum where we have to think about these issues. What kind of response, what kind of preparation, should be prepared? It's not really a separate topic, because it's a combination of a lot of financial issues, the problems themselves, the problems we're worried about, the solutions we have, the tools we have. I'm happy to see that, as Mr. Leung said, the social unrest, the political problems, the problems in Hong Kong, the problems in Chile, the problems in other countries, is it the integration of politics and policy that leads to income inequality? Do we really need new tools to redistribute revenue?

Ambassador Yasser Elnaggar, IFF Board Member, Former Deputy Minister of Investment, Egypt, Former Deputy Minister of Planning, Egypt, CEO of EN Investment:

We just mentioned the next crisis, and I think it's worth saying a lot of things about the next crisis, and we can look back to 2008 and learn from it. I think one of the most interesting lessons to see is that most developing countries didn't play a role in the crisis, but they did suffer. And I think that's what we need to address if we want to be a forward-looking forum, and that's what we need to address today, and that's what we need to address urgently.

Second, the generational difference. It's been evident over the last decade that we've seen this generational disconnect, this disconnect between youth and the economic system, including financial inclusion, and other issues. These problems are also being encountered in developing countries, where, for example, the young population is increasing, and the tools they use are very sophisticated, technologically speaking. So let's put these elements together and create a favorable trend that will allow us to achieve some better outcomes, to have a better income distribution, to have better economic returns, to have better economic relevance. And that's one of the things that I think we can talk about. Finally, there is the question of debt, both in terms of private sector and public debt, which is very serious for developing countries. There's certainly going to be a lot of political interest in this new type of institution providing more debt to developing countries, so I think that's something we can talk about.

   
Mehmet Simsek, Former Deputy Prime Minister of Turkey:

China, as a responsible power, has been exploring how we can address the core causes of our problems, whether it is climate change or the need for a multilateral approach to avoid the next financial crisis. If we don't get to the heart of the problem, our solution is to treat the symptoms rather than the root causes. Let's say we look at negative interest rates or very low interest rates.

In fact, our response to the last financial crisis was partly responsible for some of the challenges that we face now, and yes, yes, globalization was partly successful because it lifted hundreds of thousands of people out of poverty. But it has also created a lot of imbalances that policymakers have not paid enough attention to and overcome, and that are now being picked on by some populist leaders. So there are ways to solve problems that create more long-term problems in the future.

Right now we have a lot of uncertainty about trade, protectionism has been a drag on investment, and investment is a factor in productivity, so these issues are consistent. So I think it's very meaningful to be able to bring together leaders from all walks of life and all walks of life to be able to come together here, because these things are coherent.

As for the research direction, I have several Suggestions of my own.

One is the effect of financial repression on economic inequality. Is fiscal policy now encouraging companies to invest more, consumers to spend more, or vice versa? If our monetary policy is not appropriate, will it cause resources to flow to some inefficient areas? Now these very low interest rates, we need low interest rates to fight the recession, but now this low interest rates and negative interest rates are causing a lot of problems. As finance minister, I have participated in all the international summits since 2007, and I am keenly aware of the importance of working together and working together. The G20 cooperation on policy, the G20 cooperation from 2008 onwards has enabled us to avoid a recession turning into a depression, so this cooperation is critical.

Another problem, whether it's protests or discontent in Hong Kong or elsewhere, it doesn't have to be unemployment, we say the economy is not just unemployment, it doesn't have to be GDP, we should also pay more attention to the so-called GHP, gross national happiness. The gross is including a fair justice and equality principle, can't see light of economic size, this should be to study in our academic circles, can further understand what factors contributed to the people in many places are expressed their dissatisfaction, could not just growth, while growth also has a lot of work.

I think we really need to look at the impact of climate change on the economic sector and the financial sector, and there will be. How much does that matter? We need to come up with some frameworks or programmes to deal with these impacts.

Of course, in addition to our normal cycles, we also have some adverse events, such as an aging population that will put a lot of pressure on us, and the debt that we've accumulated, the global debt-to-gdp ratio has reached 330%, which is huge. In such circumstances, it is hard to get rates back on track. If the cost of borrowing is high, we can never get the ratio to a more reasonable level.

I think it's important that we continue to strive for openness and inclusiveness, which will also allow us to avoid some of the conflicts that have occurred before. Sometimes our solutions will bring some negative effects, so we need to keep making structural adjustments. The organisation for economic co-operation and development to our listed a series of structural reforms, but these reforms didn't get very seriously implement, because many politicians and they say that we don't do structural reforms, we can simply raise tariffs, or a wall, these are very superficial measures, to some extent, they let us to do what we should do to reform.    

ZHU Xian, IFF Vice-chairman, Vice-president of New Development Bank, Former Vice President and Chief Ethics Officer at World Bank Group:

I share some of my insights from the point of view of the Bretton Woods Institutions, including the world bank. Whether it's the world bank or the international monetary fund, they have a lot of economic analysis capacity. But as the world grows, in addition to these capabilities, they also form some burdens. When a crisis occurs, they may not be able to effectively anticipate and prevent it. For example, the IMF publishes a large number of high-quality economic reports, but it may not have a good solution. Or we can say that our institution, the international financial forum (IFF), although we have matured a lot, we are still quite young, so what should our positioning be? We should find a good small and beautiful positioning, do not like the IMF's macro expectations.

I think our orientation can make our analysis of the two types of work, as an important global issue, we can through the very deep analysis, advocates some very specific practical solution, probably because some of the other politicians have their own reasons, they may not take our approach, but at least would like to ask you.

At the same time, we can give them some policy options, on the one hand, we can communicate with the decision makers, and at the same time we can communicate with the public about our solutions, or our options, and our recommendations can be published on a large scale. If we can specifically select a few key areas, not only do analysis, but also make some pragmatic Suggestions or solutions, this can be promoted in the political and economic fields, not necessarily in the academic circle.

Deborah Lehr, IFF Board Member, Vice Chairman and Executive Director of the Paulson Institute:

The chairman of the conference was very wise to tell us that we should look into the future, but not too far into the future, so we can identify some of the issues of the economic cycle that are also relevant to financial markets, but we don't talk much about the impact of technology on markets. Here, I think it's impossible not to talk about the role of technology, especially in China, where fintech has been developing very quickly and China has set an example for other developing countries.

In the United States, where the infrastructure is mature, there is no fintech revolution. With the popularization of fintech, it will not cause the financial center to shift or affect the financial regulatory authorities. In the future, the largest institution under management may not be a financial institution, but alibaba, an Internet company, so we must study the changes in this respect. While these changes certainly have many benefits, such as making the financial system more inclusive, there are also some risks, such as the risk to the financial architecture that the former position of the financial center may be threatened.

Look at 5G communication technology will also have a great disruptive effect, the United States has no suppliers of this communication equipment, no manufacturers, but it has certainly shown the contradictions and conflicts brought by 5G. What opportunities these new technologies will create should also be a topic of study.
   
Sultan Bin Nasser Al Suwaidi, IFF Vice-chairman, Former Governor of Central Bank of the United Arab Emirates:

I'm from the UAE, a small economy. We have a different perspective than some of the other big economies. The size of the economy, the GDP or how an economy is affected by different factors, we all have a different perspective. Many frameworks are developed by big countries and big economies, but our small country may be different. A platform like the G20 does not accommodate us as a small country. I would like to see more representation of small and medium-sized economies.

In terms of the role of the IFF and its mission, I think this is a great place for us to meet, to exchange, to exchange ideas, including some very important ideas. In my opinion, the most important issue is jobs. And in this whole new world, if you look at our society, if you look at countries, you see young people, the younger generation facing very high levels of unemployment, in every economy, even in Europe, even in the United States. We should also pay attention to this. When we talk about the inequality of income, we should also divide the society into the younger generation and the younger generation to see the difference between generations. What kind of income inequality is there in terms of age, which leads us to focus on technology? This is an issue that we are going to face in the future, like the globalization of employment, so there are not so many jobs for young people, because there are so many robots in the factory, and there are only seven or eight people in the factory, and the real production is done by machines. These questions are worth thinking about. These are the points I want to mention. Thank you.    

   
SONG Min, IFF Academic Committee Member, Dean of Economics and Management School of Wuhan University:

The theme of this conference is global stability, which is the topic of globalization. The thing to point out is what's really worrying about this, and that's globalization and anti-globalization, or the return of globalization, or the revolution of globalization. I think after world war ii, the United States led the globalization and reached out to the whole world, and China benefited a lot in the process. After China's economic reform and opening up, it also benefited a lot, so everyone felt that globalization was a good thing for the global economy.

Over the last few decades, we've heard different voices against globalization, against financial decoupling and so forth. I was just wondering, what kind of unsupported claims are there for scholars? I think the globalization after world war ii in the first wave of globalization that most economists saw as a relative advantage, especially in the mainstream, led by the developed countries. Such arguments are based on static comparative advantage. After that war, developed countries could use their comparative advantages, such as in capital, such as in technology, while developing countries also had comparative advantages, such as in labor and resources. Everyone benefited from it.

However, things have changed in the last 20 or 30 years, and developing countries are catching up, especially China. China's industries, as well as those of other countries, have upgraded their industries, not just labor-intensive, but we have become a skilled, capital-intensive economy. This is of course the opposite of static comparative advantage.

Now it's time for the academic community to rethink this trend, and we need to look at the dynamic comparative advantage, the relative advantage is no longer this static formation, we need to look at the dynamic. For China and other developing countries, we have to learn by doing, we have to improve the manufacturing process, we have learned a lot from the developed countries, we are gradually upgrading our industry. Our supply chain, our industrial chain, the division of labor, the division of labor, the division of industry, all learned from developed countries. Developing countries are also constantly integrated, gradually integrated in such a network. Now the whole economy is very much integrated, rather than one country focusing on one industry.

In such a networked economy, China benefits a lot, the United States and other developed countries also benefit, so we see so many economies benefit, while in some countries there is a trend of deindustrialization, we need more theories to support what we see. The United States and other developed countries are already facing challenges, facing the challenge of deindustrialization, of manufacturing moving away from the American economy, to other countries, and that's the biggest challenge for them.

At the same time, new technologies are emerging. Especially in the area of information technology with each passing day, we see in developing countries is given priority to with China is catching up, this can't be explained by the traditional comparative advantage, and we see China is catch up with, on new technology, and even has a tendency to catch up with, like 5 g technology, and electricity, this is a great challenge for the global economy, for the challenge of some developed countries. That's the overall challenge.

I think our forum can figure out what the next step should be, how developed countries like the United States can successfully shift towards de-industrialisation to industrialisation and do they need to do this? Less developed countries have to figure out how to industrialise and escape the trap of the middle class. These are all questions worth thinking about. I also agree with you that we should pay more attention to these real-time topics, we should pay more attention to the issues of globalization, we need to pay more attention to the financial issues.    

HE Jianxiong, Former Director General of International Department of the People’s Bank of China, Former IMF Executive Director for China:

Almost a decade ago, I was on the board of the IMF, and I still remember back in August of 2007, there were warnings about this kind of thing, about the subprime crisis. But instead of focusing on these issues, the fund focused too much on global imbalances, such as China's current account surplus. It seems like in late July, early August of 2007, people thought that the outlook for the U.S. economy was good, and that its financial system was very resilient, and that's how you looked at the overall financial system.

In the current wave, we should avoid making similar mistakes. We're going to see if there are some blind spots that we're missing. There are some politicians who don't see these blind spots, and I'll give you some examples. The current slowdown in trade, the slowdown in investment, the overall outlook is not so optimistic, the combination of the two is very worrying. There are some countries, especially developed countries, where productivity growth is slowing, and I think one of the reasons is the introduction of technology. In those economies, which are slower, what they should do is to welcome the influx of technology, to encourage collaboration, encourage collaboration between companies, work on r&d. But the reality is the other way around, so the psychological impact on the investment is very big, because if you look at what kind of projects are there, how many of them are rejected? Maybe the number is small because of psychological fear. Because a lot of good projects don't start at all, because they know, because they can't predict, because the rules are so opaque. There are some companies that can lobby and projects that are easy to turn down. So these are questions for politicians, the IMF and the world bank to focus on.

The other issue is the misuse of the global financial infrastructure, primarily for national security, and the misuse of our financial system for political purposes, which is also worth discussing. At present, the international community of children is silent. I think a forum like ours should speak up.

XIA Le, IFF Academic Committee Member, Chief Asia Economist of BBVA:

China's two-way interaction with other central Banks, we have central bank governors here, so I don't think I'm qualified, but I want to share my experience. I think this may help us to solve such a problem, how to use our limited resources to solve these important problems.

Through what channels can such bilateral swap agreements increase the use of the renminbi? Whether or not you use such a protocol, we already know that the protocol itself is a tool that you can use if you want. Normally countries don't need to use these tools, but what's interesting is that we found that if you have a bilateral agreement, if you have an agreement with the central bank, your government will have more confidence to use the yuan for clearing and settlement. This is a confidence booster. This agreement is a shot in the arm. Through what channels can such bilateral swap agreements increase the use of the renminbi? Whether or not you use such a protocol, we already know that the protocol itself is a tool that you can use if you want. Normally countries don't need to use these tools, but what's interesting is that we found that if you have a bilateral agreement, if you have an agreement with the central bank, your government will have more confidence to use the yuan for clearing and settlement. This is a confidence booster. This agreement is a shot in the arm.

Let's look at the process of internationalising the renminbi, which has been hotly debated over the past few years. But it's a very broad topic, it has a lot of elements, so I think bilateral swap agreements with other countries are one of them, and it's also related to these organizational, structural changes. I believe that these bilateral exchange agreements will increase the use of the renminbi, in trade and investment, and even in asset allocation, and I believe that we can find more creative ways to use existing tools to advance the internationalization of the renminbi.

In fact, we see that this is related to the arrangement of the renminbi, related to the new financial order, thank you.


CHEN Bingcai, Executive Dean of the IFF Institute:

Is the change in the global economic pattern related to the slowdown of our overall economic growth momentum, the global economic growth momentum? Especially in the major developed countries we can see that they are now because in general whether it is the demand for consumption, whether it is the demand for investment, when a country has reached a mature stage of industrialization, or even basically a stage of service modernization, will it have a higher growth momentum? Where on earth? I think it might be worth thinking about.

The integration of emerging market economies represented by China into globalization in the past has brought growth momentum to the world, and China's industrialization and urbanization have basically entered the final stage, which may have a greater impact on global growth drivers. Here is a question: is there a ceiling on the growth of globalization? Or do we all think that this growth will continue forever? That's something to think about. If our growth has reached the ceiling, what is the problem that it needs to solve more? Is the issue of distribution, or other policies and institutions more need to be improved?

Third, we may need to pay attention to the phenomenon that governments and politics all over the world are pursuing your economic growth, including the increase of national welfare, which is actually a global comparison of growth competition and growth. So what does it use? Using various policies to keep your growth up to a certain level or target, one of the most used now is technology, and another is probably finance, including fiscal and monetary policy. If you use fiscal policy and monetary policy when we get to the ceiling of growth, are fiscal policy and monetary policy coming to an end? There is no way out. At this time, fiscal policy and monetary policy still promote economic growth along the traditional theories of the past, or do we need new theories to solve the problem of economic growth drivers? This may be something we need to consider.

Finance becomes politics. I think it might be worth thinking about in this context. Economics itself should be national economics. Politicians and political leaders of all countries serve their citizens and their countries. Is the root cause of it still the driving force of growth at this stage that we need to consider and pursue such a high growth rate? Or do we care more about really better distribution?  

ZHOU Xiaochuan, IFF Chairman of General Assembly, Vice Chairman of the 12th CPPCC:

I agree that fintech, digital currency and financial infrastructure are all crucial. I suggest we have an exclusive forum to talk about these issues. Because we need to bring together representatives from central Banks and clearing institutions, as well as technical talents, fintech developers, and public policy makers, and we hope that technical and financial talents can also participate.    

   
Marsha Vande Berg, IFF Academic Committee Member, Member of National Advisory Council, Stanford University:

Our organisation’s strategy will be the direction of our research, so I also hope that we can emphasize our strategic research. There are a lot of ways that you can try to give an answer to why something happens. But the other approach is not to explain, but to describe. For example, green finance or the issue of green bonds in China, as well as the transparency and standard of green bonds, are worth describing. I think the field of green finance needs further elaboration. If we can make contributions in this regard, I think it will be very useful and valuable. Of course, it's hard to position yourself to do research, because there are so many research institutions around the world, but look at us here, you represent the global financial elite, and we should have the opportunity to make a very real contribution in this area.    

Herman Van Rompuy, IFF Co-chairman, Former Chairman of the European Council, Former Prime Minister of Belgium:

The question I want to answer most is how we can avoid future financial crises. There are a lot of people say we have a lesson of the financial crisis, we do not have completely drain, or said the financial crisis of a decade ago, we take the wrong way because of political factors affect our decisions, in the future we have a stronger financial technology, have more perfect financial integration, hope you can combine these themes, subject, of course we don't want to have a very negative topic, also is not necessarily about crisis so negative and so negative, of course we spoke in a language can be more positive, more optimistic to collect and organize a lesson in a crisis, combine them. This will give us a platform to collect research from others and organize and publish it under our own brand and name.
   
Han Seung-soo, IFF Co-chairman, Former Prime Minister of Republic of Korea, Former President of the UN General Assembly:

I strongly agree with Mr. Van rompuy that our mission is to avoid the next financial crisis. The financial crisis in 2007 and 2008 also led to the birth of the G20. In that year, the leaders of all countries worked together to save the world economy to a large extent. If there is another financial crisis ten years later, can our leaders work together effectively? Not necessarily. I doubt it. Perhaps this is exactly what we meant by the F20. It is an unofficial occasion, and if we get it started, it may provide a platform for future crises.