 So I will now ask our speakers on our panel to turn on their video and microphone and I will introduce them to you. So let's start with Ihan Khosi. Ihan is Chief Economist and Director of Prospects Group in the Equitable Growth, Finance and Institutions Practice Group of the World Bank. Prior to joining the World Bank, he was Assistant Director of the Research Department and Deputy Chief of the Multilateral Surveillance Division in the IMF. Ihan is a non-resident senior fellow at the Brookings Institution, research fellow at the Center for Economic Policy Research and a research associate at the Center for Applied Macroeconomics here at the ANU. Catherine Mann is an international economist whose career has spanned across domestic policy in the USA and global analysis at international organizations, research and the private sector. Most recently, Catherine was the Global Chief Economist at Citibank Bank from February 2018 to May 2021. Prior to that, she was Chief Economist and G20 Finance Deputy at the OECD from October 2014 to November 2017. She has also held positions at Brandes University, the Federal Reserve Board of Governors, the White House and the World Bank, among others. She was recently appointed as an external member of the Monetary Policy Committee at the Bank of England. Adam McKessuck is the Chief Economist at the Business Council of Australia. Adam has a responsibility for leading economic policy and analysis work within the Business Council. In his role, he works closely with Australia's leading chief executives and representatives from their companies to shape public policy and promote economic growth. He was formerly a senior executive in the Australian Treasury and has a breadth of experience advising governments on economic policy issues. He has held various positions, including in the Treasury and other government agencies, covering areas such as preparation of the federal budget, macroeconomic forecasting, international finance, tax, structural reform and foreign investment policy. And finally, Yang Yao is a Liberal Arts Chair Professor at the China Centre for Economic Research and the National School of Development at Peking University. He currently serves as the Director of China Centre for Economic Research and Dean of the National School of Development and Editor of the China Centre for Economic Research House Journal called China Economic Quarterly. He serves as the Chairman of China Economic Annual Meetings and Chairman of the Federated Foundation of Modern Economics. His research interests include economic transition and development in China. And he's also a prolific writer for magazines and newspapers, including the Financial Times and Project Syndicate. Okay, so now let's start our panel. Let me start with you, Catherine. So we had you in a similar session last year. And when we last spoke, the unemployment rate figure for the US in April 2020 reached 14.7% and 6.65 million people had filed for unemployment. The current US unemployment rate is 6.3%. So in last year's Atlanta Fed GDP Now figure suggested output growth of minus 48.5% on an annualized basis. And that measure is currently a positive 5.1%. And the World Bank has shown that the economy's growth rate globally is the fastest it's ever been coming out of various sessions. So that's quite an economic turnaround. But the angst of the economists about the robustness of the recovery is plain to see every time we get a single piece of data. Do you think that the recovery in the US in some parts of the globe is as fragile as some economists fear? Well, Renee, I think that it's without question the global recovery is fragile. There's myriad of downside risks. I'm going to go through four of them. First, I'm going to talk about differences across economies. And of course that's important if we think about the global economic recovery. Then I'm going to talk a little bit about across sectors and the extent to which the recovery is fragile across sectors. Then we can talk about fiscal and monetary policy and the threat of consolidation and normalization. And then finally asset valuations. So if we go through those four elements of potential risks, it's clear that the risks are on the downside. And so the potential for downgrades in global growth next time the major international institutions do their forecasts, I think the risks are definitely on the downside. So let's first talk about across economies incomplete vaccinations. I mean, it's within advanced economies, there's incomplete vaccinations, but frankly, even more importantly, incomplete vaccinations within the emerging markets. It's in availability of vaccinations to deliver. It is a challenge of domestic deployment for a whole host of reasons emerging markets are really not able to and not participating in the vaccinations that are available. Now, emerging markets on a PPP basis are more than 50% of the global economy. So if we have delays in achieving vaccinations in emerging markets, this is clearly going to have an impact on their capacity to be part of the global recovery. And it does represent downside risk overall. Of course, emerging markets play an incredibly important role in global supply chains. And this is, and we are seeing the fragility of those global supply chains as they are, you know, as various ports, as various facilities are closed down on account of the vaccination challenges in many countries. We see this in the very soft PMIs in many of the emerging market economies. For those who are not part of the supply chain directly with on manufacturing side, of course they have very important tourism linkages to the global economy and with incomplete vaccinations and the shutdowns and border controls, you know, lost tourism is a very, very important downside risk, continued downside risk for many of the emerging market economies. So that's a first set of things that show you clearly there's fragility in the global economy's recovery, not withstanding the numbers that look good when it was so bad, you know, numbers can look good. The second issue has to do with COVID mutations and the impact that that is having on sectoral recoveries within economies. Now, you mentioned the Atlanta Feds GDP Now forecast. Well, about 10 days ago, it was 6.7% then it was downgraded to 3.7% and that was even before the most recent job numbers came out that are probably going to be a little bit more concerning when we think about prospects in the United States but more broadly across all advanced economies where vaccinations have been more widespread, you know, we have a slow pace of the consumer recovery. Some of it has to do with, you know, concerns about and having precautionary savings but also it has, you know, continued challenges in services in terms of delivering services in terms of services availability and in terms of the willingness of individuals to go out there and really go back to a normal strategy. So COVID mutations in the advanced economies significant issues continuing with regard to recovery of the services sectors. And that, of course, we have to remember in advanced economies in particular, services sectors are the principal driver of GDP growth. They are the principal employer. And so even though manufacturing looks much better and people are buying, you know, goods, these are smaller segments of the economy. That has implications for business investment. Maybe we can talk about that in a little while. The third point I wanted to make was with regard to the challenges with regard to fiscal and monetary policy either consolidation on the fiscal side potential normalization of monetary policy. Now, of course, the underpinnings of these potential moves on consolidation or normalization have to do with, of course, concerns about inflation and concerns about debt sustainability. So there is a rumblings in especially in advanced economies about a return to fiscal discipline that now is the time to do this. There has been, you know, advances in recovery especially if you look at the manufacturing sector. And so there's this concern about debt sustainability and that now is a good time to engage in fiscal discipline putting economies on a consolidation path. And there's also, of course, some fiscal cliffs having to do with the ending of furlough programs in some countries and the ending of pandemic related benefits in other economies. And these fiscal cliffs, you know, might be beneficial from the standpoint of fiscal top line. But, you know, to the extent that these have been important supports for consumption there is a concern about whether or not the rug is being pulled out from under a little bit too soon. Now, of course, on monetary policy normalization, again, the concerns are when we look at some of the inflation statistics which again coming from a very low base, we have to worry about, you know, that the misinterpretation of some of these inflation data that would, you know, over time where the base effects being removed from the data some of the energy tailwinds to inflation turning into headwinds and a variety of other elements having to do with inflation. Nevertheless, there is a move towards at least considering the pathway towards monetary policy normalization. And this of course has implications for the interest rates that are at this time very supportive of asset markets. So let me turn to that last piece of the puzzle the stretched asset valuations. Now, these asset valuations really are predicated on continued low interest rates. And so there's this interplay or an endogeneity between the interest rate paths, the policy rate paths and the potential asset price volatility. Now, some of those valuations particularly equity markets in the United States seem to be particularly stretched. Housing markets in many countries are at their all time are at very high valuations. And for example, the OECD metric of the global house prices it has taken us back to where we were prior to the global financial crisis a concern that even though there've been substantial more macro prudential and micro prudential regulations put into place to support both to reduce some vulnerability in housing markets. Nevertheless, prices are very high and potentially a concern. Credit spreads very narrow. And something like Bitcoin for example is another indicator of the degree to which asset valuations are perhaps a little bit disconnected from the state of the real side of the economy. If we have a stumble in asset prices as there's a realization that maybe the real economic foundations of say earnings are not quite as supportive as the markets currently have been pricing in. Then of course we have wealth effects we have business investment effects we have some uncertainty effects that turbulence does have implications for the global economy going forward as well. So a lot of risks out there, a lot of risks. Okay, well let's turn to another part of the world. Let's turn to China. So, I would like to ask you. So China grew by 2.3% last year and growth is forecast to rebound to 8.5% this year which is an upward revision of the forecast for growth in China from last year. So are you more optimistic or less optimistic than Catherine on her view of the economic fragilities that we're facing? Well actually I'm more optimistic than Catherine. Well, in this year China's growth has slowed down. In many years China actually elected behind the United States in terms of growth rate, right? And that's going to last for several quarters I think. But in the median range and the longer range I think China and also the world is going to have a brighter future than Catherine has just described I think. Let me focus on three new technologies that I believe are going to drive the Chinese economy and also the world economy into a new stage of high growth. When I say high growth of course it's not that kind of a double digit growth but a reasonable and respectful of growth rates. So the first new technology is AI. I mean, can you imagine only like four or five years ago when AlphaGo was released people were so surprised by AI technology. But today we are using AI almost every minute, right? AI has become more sophisticated but also much cheaper, much cheaper than before, right? So for example, in China we have a world called Ma Long which means digital workers, right? So when you go to those so-called high tech companies you see a lot of people working out there this is so labor intensive, right? Also means AI technology have become so widely used and become cheaper, right? So that's going to drive a lot of new industries. Probably we do not notice them but they are coming into our daily lives particularly after the pandemic, right? So it takes a chance of booming, right? For example, in Japan people were not used to use like internet, mobile telecommunication technologies but after the pandemic, Japanese people are beginning to use all sorts of new technologies. So this is one. The second is the solar power. This is quite related to the climate agenda. We know that the climate agenda has been on the table for 30 years, right? But over the last 30 years, most of the time we were just talking about climate change but over the last several years the agenda is being turned into action. That's very important, right? So globally, industrial countries are pushing for a unified carbon price globally and European countries are discussing to place border tax on imports, right? You know, in the short run, probably that's not going to be good for a current growth worldwide but in the longer term, I think it is going to be a huge driver for solar power technology to be applied worldwide, right? You know, they come to China, you can see China is a largest carbon emitter in the world but among China's carbon emission, firepower accounts for 80%, right? That's a lot because China burns a lot of coal and China has announced that by 2030, China is going to flatten its carbon emission and by 2060, China is going to neutralize carbon emission. Those are two bounding tasks and China has to change its energy mix in order to achieve those two goals. But luckily, China is a bigger solar power producer, China produces 75% solar panel components and has one third of the world solar power installation. So China has a huge manufacturing capacities in solar power. Here, I also want to raise a question, you know, it comments the thoughts about government policy or government support to industry. You know, solar power was introduced in China 20 years ago then in 2006, the government began to heavily subsidize solar power industry. And by that time, mostly it comes in including myself, criticize the government saying that no, no, no, you should not do this. But 15 years after we see the results, right? China has become the largest producer solar panel equipment and the largest solar power producer, right? So that's the second area. The third area is electrical cars, okay? You know, this is also consistent with the climate agenda. And many countries that have announced plans to fizz out the petrol cars, right? China has not announced at that night to fizz out the petrol cars, but in China, electrical cars are moving so fast, right? Also, thanks to a government policy, I think that there was a starting from 2010 the government began to subsidize elect or 2014, the government began to subsidize electric cars, right? But today China has become the largest producer of electric cars, right? So electric cars are much simpler than petrol cars, right? But it used a lot of new technologies particularly in batteries and AI. I mean, in a sense, you can think about the electric cars as a combination of batteries and AI and luckily China leads in both areas, right? You know, China's battery company is leading the world and in AI areas, China is also one of the world leaders. But not just in China, US and also Europe are doing the same, but probably in the coming decades, China is going to produce most of the low end and the median level electric cars. Of course, China also produce a higher end electric cars, but on a higher end, I think Europe and the United States are going to produce most of those more expensive electric cars, right? So that's a good combination. People of course worry about, you know, you talk about all those new technologies, but in the last several decades, by a constant measure, the new technologies have not contributed to economic growth because probably many technologies just replacement of all the technologies. So you don't see the real growth. But in today's world, I think that those new technologies are going to create a new opportunities and they're going to provide exponential margins for economic growth. AI does not just replace like a human mind, the human hands, actually creates a lot of new businesses. All right, solar power, of course, most of it is going to replace a firepower. They are also going to stimulate inventions of new technologies. Electric cars probably are going to be the same, right? Now, let me move forward to one suggestion. I think that the current climate agenda, at least in the short run, is not going to be friendly to countries in Africa and South Asia because those countries cannot jump into the solar power stage, all right? So if the world is going to have a unified carbon price and European countries set up carbon tax at the border, then those driving countries are going to be hurt. I think that this agenda, we should not only talk about unified carbon tax or carbon price, but also some concrete plan to help those countries, right? So probably the world is a new infrastructure building drive for African and the Southeast driving countries. And in that China can contribute quite a lot. Okay, let me start with you. Thank you. Okay, now I'll turn to Ihan. Let me first ask you your views about new term growth prospects in 2021, 2022. So the World Bank has shown in its global economic prospects report that you're involved in producing, that the global recovery is the fastest that it's ever been coming out of recession over the past 80 years. I wanna dig a little deeper into the seemingly good news story because other evidence suggests that the pandemic has inflicted tremendous damage on particularly on emerging and developing countries where unemployment rates are higher, investment has declined and the education of the world's children has been interrupted, particularly in countries where online is not an option. Poverty has increased in the first time in a generation. So the strong global growth that we're seeing seems to me to be an artifact of the growth occurring in the world's largest economies or the US and China. So do you think the economic spillovers from the US and China to the rest of the world will be enough to support growth in low-income countries? Thank you, Rone. Thank you. Indeed, we are expecting growth very high. In fact, it could be the strongest post recession pace in terms of global growth we have seen over the past 80 years. And the big observation is that a substantial fraction of this growth is coming from advanced economies and a few emerging market developing economies. The United States, we are expecting growth anywhere between six and a half to 6.8%. In China, growth is gonna probably exceed 8%. But when you look at other emerging market developed economies, we have a much more subdued growth forecast best than four and a half percent. One important point about the current global recovery, it's all about those countries that have access to vaccines and those that do not have access to vaccines. And there is a huge difference between advanced economies, they are delivering record growth rates coming out of recession and those low-income countries, middle-income countries that are still struggling in terms of getting the vaccines and distributing them. Unless the global community addresses this problem of the unequal distribution of vaccines, it's going to be difficult to overcome the pandemic and it's going to be basically impossible to have even the distributed global recovery. Now, with respect to US and China delivering strong growth and having very large spillovers, of course, when you have these two economies having this type of growth outcomes, that's a reason to celebrate. But unfortunately, the strong growth performance will not be enough to drive a robust recovery in emerging developing economies and especially low-income countries. So when you look at low-income countries, most of them have the underlying structural problems. This year, we are expecting in these economies growth to be around a bit below 3%. And that's a decade-long on the lowest growth rate in these economies. Now, the capital growth numbers will be essentially zero in this year in low-income countries. About two terms of them are affected by fragility, conflict and violence. So when you focus on those countries, the outlook in this fragile and complex state is particularly dire. Now, when you look at the vaccination numbers, things look really very, very disappointing. Less than 2% of the population in low-income countries has received at least one dose of vaccine as of late August. Just 120 of the share of the population vaccinated in the world. So really, this is something global community, as I mentioned, needs to pay attention to. So what happened with the pandemic? There were existing vulnerabilities and now these vulnerabilities, in a sense, were magnified, such as fragility, extreme poverty, weak administrative capacity, elevated debt levels, disasters, of course, becoming more frequent because of the climate change. And all of them together make these economies less resilient and having basically accumulating problems and we are seeing the compounded effects of those problems. In many of these economies, another big issue is the elevated debt levels. And global community try to address this problem, setting up the, of course, debt suspension initiative. Debt initiative is gonna expire at the end of the year. There is now a common framework to basically restructure the debt of some of these economies and some countries already have been going through this process. So all in all, there's a global recovery underway, highly uneven. How this global recovery is going to proceed is gonna depend on the health front, whether we can get ahead of the pandemic and of course, how the policy makers is going to set up their policies as we basically start this post-pandemic recovery. But let me stop here. Thank you. Okay, let me now turn to Adam. We'll ask some questions about Australia. So apart from the short recession that Australia experienced last year, Australia has had a remarkable run of positive growth since 1991, including positive growth in the most recent quarter. Despite this sustained positive growth, you are the author of a recent Business Council discussion paper called Living on Borrowed Time, Australia's Economic Future. The title of the report doesn't have a positive tone to it. So why did the Business Council write this report? Thanks for knowing. And I think certainly the report is written against the backdrop that we have done well. We've done very well in the last few decades. And we have a lot of potential, but we can do better is the key message of Living on Borrowed Time. We've actually had now five intergenerational reports over the last 20 years, but it all sort of told us that if we don't sort of do something about our productivity performance, growth in living standards will slow in Australia. And essentially what we're seeing, it's coming through quite clearly in the data already. So we've been out talking to the community about the issues we've got on the paper. People are really surprised to learn that the last decade was our worst decade for growth in living standards in 60 years. So I think we have this sort of creeping issues coming through in the Australian economy that people aren't really seeing. And I think we're thinking about the sort of issues that the panelists have raised so far. There are some big forces of change coming our way, but we're really gonna sort of accentuate a lot of the sort of underlying issues we're facing in the Australian economy. Obviously, our starting point now is a very different fiscal position. So we now have the highest government debt since the Second World War. So that changes the whole fiscal picture for Australia. The global picture, as we just heard, is very, very different. There's a lot more instability, both economic and I think geopolitical. But at the same time, a lot of opportunity for Australia. So we need to think about where we sit in the world. We're seeing technological change accelerate through the COVID period as Yang now talked about earlier and sort of how do we sit in that sort of changing technological world and what does that mean for our business models, et cetera. And obviously the last one is the sort of climate change challenge. So most of our major training partners now are committing to net zero by mid-century. So how do we respond to that? So I think there's a lot of forces that are bringing some of the longer term issues to a head. And as we sort of look to the recovery from COVID phase, we sort of need to think about how it's going to impact. So what we've sort of done in this paper and we've sort of gone out to the community across Australia, we're talking to people right across the country. And we're sort of not giving them a menu of here's what you have to do. We talk about six big shifts we need to think about in this country as we sort of look at the sort of COVID recovery challenge. The first of these is really about sort of how we transform our industry structure. How do we ensure we have a diverse and resilient industrial base? So we're very good at a few things in Australia, but as we see with these forces of change, I think the types of things we invest in now won't give us wealth in the future. So we're good at mining and agriculture, but how do we sort of put a few more eggs in our industrial basket? The second one is really just having a more proactive response to climate change, having some national goals and actually taking opportunity. So Australia could actually be a leader in clean energy. So how do we actually turn this challenge of climate change into an opportunity for Australia, which we know is there? I think an additional one is our skills and education system. So how do we lift our international competitiveness? So one is really about, we've seen something of a decline in our performance and education standards here in Australia. How do we lift that up and become more competitive? We have a challenge around the fiscal, as I mentioned. So how do we have a tax system that is going to deliver us, sustainable revenues will help pay down debt as well as deliver the services needed of an Asian population? So there's a whole question around that. There needs to be a discussion across the generation. It's not just a Commonwealth government issue, it's also a state government issue. And I think the openness issue is very important too. So where does Australia want to sit in the world moving forward? And obviously, in the past, generated a lot of our wealth from our connections with the global economy as a small open economy. That is the best place for us to be. So but where do we position ourselves and take advantage of some of the opportunities coming through ongoing growth in Asia and so on. I think the last shift we talk about, it's really just making sure that the growth is even across the economy and that we're sort of addressing areas of entrenched disadvantage. People aren't held back by gender. They're not held back by where they live in Australia. So sort of picking up that regional agenda. So it's a sort of fairly ambitious conversation we're trying to have with the country currently. But we're trying to retest, what is the sort of appetite for change and how does the country want to respond across those six big areas? I think we're all thinking we can maybe delve into a bit more, but I'll sort of leave it there as a summary. Great, thank you. So I'll just remind the audience that the Q&A will start soon. So if you would like to put your questions in the Q&A box. In the meantime, I've got many questions to go through. So I'll now turn back to Catherine. Other notable pandemic trends with consequences for economic renewal are the behavior of savings and investment in the economy. So some classes of consumers have amassed huge savings due to the pandemic. The savings of Americans are roughly $1 trillion more than what they were a year ago. And we have significant infrastructure investments to needless programs in place. So what do we need to do to incentivize businesses to invest and consumers to spend in a way that leads to sustained economic renewal? So thanks, Renee. This is a challenge. It's a challenge on the consumer side. I think we have to recognize that the distribution of savings, in other words, the people who have been able to work from home continued on with their earnings but yet have not been able to spend on the things that they usually spend on restaurants, entertainment, travel. That's not the whole population. And in fact, those are the people with the shall we say lowest marginal propensity to consume. So how that savings gets deployed is I think an important question going forward. It could be a source of continued robust growth and on the consumer side that would be supportive as the fiscal policy gets free goes into retreat. But I think we don't know that. I think we don't know that it is very dependent on the COVID and mutations and the availability, for example, of cross-border travel. I think we have to remember that for those who have not been in a position of having excess savings or more savings because they haven't been able to go out and spend it, the people who spend all of their earnings, they will be going back to employment. But is it employment that actually represents a supportive consumer demand? Some of these jobs don't pay as much as a living wage, although there have been some changes at the very low end in terms of higher wage bonuses and so forth for taking a job. But nevertheless, I think we have to be very, we have to be concerned about the support for consumption going forward because of the extent to which US fiscal policy in particular was designed to have a very, very large consumer boost to it. And that of course is being sort of taken off the table with regard as pandemic benefits roll off. On the investment side, I'm gonna join with Yao and with An, I'm talking about the role of climate in terms of the key incentive for business investment. Yes, we have business investment in information technology in order to deal with all of the changes and structure having to do with the pandemic. Yes, we have business investment having to do with supply chain reorientation to make production in more locations. This is going to have some investment associated with it. But if we really wanna have something durable and large and consistent with regard to business investment, we really do have to be talking about a durable and global commitment to a change in the relative price of carbon. Whether we do that directly through a carbon tax within a market, cap and trade, or whether we do that with regard to a border tax adjustment, whether we do that with regard to taking away a lot of subsidies that exist for fossil fuels because there are a lot better there. Whether we do that with regard to carbon regulations, whether we do that through, for example, the total climate finance disclosure that central banks and regulators have put onto the private financial system to disclose what is in the carbon intensity of their portfolios and therefore sort of incentivize carbon, understanding carbon intensity at the firm level that would create this incentive for having a lower carbon intensity. All of that is necessary in order to create incentives for the private sector and the private financial sector to move forward with a change in business investment that's necessary to reach these carbon goals. The challenge, I mean, that's a big challenge to be honest, right? But an even bigger challenge and it's something that Yao did not really address, which is it's one thing to innovate, it's another thing to adopt. You can have lots of innovation in climate space or in some of these other spaces, but the record of adoption is something that we can look through IT itself back in the 1990s. There are firms in every sector that are the innovators and are the adopters of existing innovations, but then there are a lot of firms and very, very big tail of firms that do not adopt innovations that are available. They are off the shelf. They don't adopt them. It could be because they're too expensive. It could be because the head manager doesn't want to do it, but these are critical questions for business investment more broadly to have the type of beneficial change that will be supportive of potential output, productivity growth going forward. So I just like to thank all of our panelists today for their really fantastic insights. It's been a great way to start the conference. I still have two pages of questions that I didn't get to ask, so there's still a lot of ground to be covered. Everyone at home, please join me in thanking Catherine, Ahen, Young and Adam for their wonderful presentation. And if you clap at home, we can't hear you, but it means that you'll have really good karma for the rest of the day at the conference. So thank you very much.