 Currently, we have a keyword for Chinese economy, which is new normal, meaning current day China's economy is very different from before because the growth has slowed down. In the past, we talked about this problem from a macroeconomic point of view. Today, we want to talk about new normal from a microeconomic point of view. We are very delighted and honored to have five excellent panelists today with us. I'd like to present them first. First, Mr. Shi Wencha, President of China Union Pay, Mr. Zhang from Chairman and CEO of City Capital, Zhang Fangyou, Guangzhou Automobile Industry Group, Mr. Rubini, Professor of Economics from Stern School of Business, New York, and finally, Mr. Zhang Weiyin, Professor of Economics from Beijing University. Welcome. So I'd like to ask each of you different questions. And I'd like to hear your reply one by one. First question I'd like to ask Mr. Zhang Weiyin, Professor Zhang, you have been studying companies and enterprises in China. So I'd like to ask you the following question. Now, enterprises and entrepreneurs, are they having a better life under the new normal economy? Whether it's new normal or old normal in China, economy should be developed based on entrepreneurship and not on government subsidies. And what's different now under new normal? Actually, in the past 30 years, entrepreneurs earned money by arbitrage, taking advantage of imbalances of the Chinese economy in the past. And now, under the new normal, we need innovative entrepreneurs who can create value, who can create what customers need today instead of just taking advantage of imbalances in the economy. In the past, entrepreneurs only looked at short term, but today, under the new normal, entrepreneurs should have a longer term point of view, like in a time span of 5, 10, even 20 years. So entrepreneurs today have to pay attention to system and institutions. So we really have to have a stable economic institution and system so that entrepreneurs can continue or initiate their innovation in the current economy. Currently, we've seen that are still some imperfections in Chinese economy. For example, the protection of IPR is still not perfect. So if rule of law in the financial and economic sectors cannot be protected, it's very difficult for entrepreneurs to transform into a more innovative pattern of development under the new normal. Many people think we should rely only on government policies. I don't think so because entrepreneurs know better the economy than the government officials. Policies can only depend on known factors, but economy and entrepreneurs should rely on a reliable rule of law or a reliable and predictable system so that they can continue to innovate. So in terms of difference between private entrepreneurs and state-owned company entrepreneurs, I don't think entrepreneurs from SOEs can be called entrepreneurs. Sorry for the president and chairman here. Because entrepreneurs should take risks. Take risks. That's why I don't think SOE entrepreneurs are real entrepreneurs because they don't have to take real risks like private entrepreneurs. From my observation, SOE entrepreneurs or SOE chairman do not have more than three, above three years of visibility. That's why they cannot really innovate. Thank you, Mr. Zhang. I meet Mr. Zhang Fangyou every year in Davos. And I know Guangzhou Automobile is faced with many challenges in China. Under the new normal. So Mr. Zhang Fangyou, I know that you have some joint ventures with foreign stakeholders. So under the new normal, what are the challenges you are facing? And also in China today, manufacturing, including car manufacturing, is facing challenges, but also opportunities. So I'd like to know, what do you think about the new normal? Thank you, Mrs. Hu. Guangzhou Automobile group. Maybe some of you don't really know this group, but there are top 10 automobile car groups in China. And Guangzhou Automobile is ranked number five. We have a joint venture with Honda or N Toyota too. We also have a joint venture with Chrysler. We also have our own brands, such as Trend T or Legend. So you ask me a group like us who have joint ventures with foreign companies. And we also have some state shareholding. So joint venture accounted for 75% of our businesses. So the challenges we are facing are as follows, because we have joint ventures with foreign companies. So maybe we are more adapted, or we are more able to adapt ourselves to new normal, because we have different products and mechanisms. We try to introduce different products and capitals. And based on these, our group and our companies are going through innovation too. I'd like to give you some figures. In this year, the automobile industry grew by 4%. But we have grown by more than 10%. In 2014, we had a growth rate of 25%. And 2013, we had a 45% of growth, which may seem exaggerated for you, but it's real growth for us. That's exactly because our products cater to Chinese customers' needs and taste. For example, last year, our growth rate is much higher than the average growth rate. And we have four different kinds of car models who are actually sold out. Customers can even find them in our dealerships. So they are very well set, sold. So under the new normal, what are your different advantages and disadvantages for you as a car group? In terms of advantages, our advantages is our products who cater to Chinese customers. And in terms of disadvantages, the overall economy grows much slower than before, so we have to adjust our growth rate too. Our advantages is that now we have our strength of innovation. For example, our brand, Tran Chi, has been enjoying very good sales figure in the car industry. Of course, under the new normal, we are facing some challenges, but we also have very good advantages, which are deep rooted already in our company's DNA. So I think we can remain optimistic. Thank you, Mr. Zhang. Now I'd like to ask Mr. Shi the relation between real economy and financial sector. So I'd like to ask you, Mr. Shi, Chairman of Union Pay, why the liquidities of financial sectors are not coming through into the real economy to help the physical economy. How do you see this problem? Worldwide, globally speaking, in terms of an economic cycle, we are seeing that financial sector now is disconnected from the real economy. Even more so now than before, in the 80s, I think this started in the 80s. A lot of liquidities remain within the financial sector and do not go through into the real economy. Is it a demand side problem or a supply side problem? I personally think both. From demand side, China under new normal is changing its economic structure, economic structure. Those who needed money before maybe don't need money now. And now there are new sectors which need liquidity, but these needs are not well known to the financial sectors. Maybe it's a communication channel problem. So financial sector still doesn't know about these new needs. And from supply side, currently financial institutions, their old customers are needing less and less liquidity. And financial institutions are trying to quantify, trying to find and quantify the new needs in the current economical situation. That's why we have this connection between financial sector and real economy. What is the status of China's financial institutions this year? I think financial institutions are a bit too much. If we know more about China's economic situation, like China... More on the development of Chinese economy, we could see there is difficulty to encounter a financial crisis. Crisis may not be a better term, a good term to describe the current situation. For the past 30 years, China was developing at a very fast pace, but for financial professionals, these are getting more difficult. Now we are facing market pressure. My colleague here is from the financial circle. I'm sure he faces much pressure. So okay, could you reply to this question? What kind of a pressure do you encounter? What are your major difficulties this year? I think I should add one point to my colleague, the separation between real economy and the financial circles. I think because there are many good debt enterprises that should be eliminated long ago. If we use the market clearing definition, such enterprises should withdraw from the market long ago, but because they got support from the government and banks are not ready to accept their own failure, that's why they were allowed to survive and the financial capital is not able to enter the real economy, as my colleague just now has pointed out. As a whole, in terms of investment, everybody knows that we are facing hard times that we should be very prudent in investment. Everybody is doing short-term operation that after investing on one field, it's hoped that others would follow suit. That's why there was this stock market catastrophe last year. In 2015, one journalist told me that after interviewing many Chinese companies, not one of them holds an optimistic view, but none of them is desperate about the Chinese economy. So that I think that this year we cannot underestimate the risk in the financial market. The risk will not be lower than 2015. I think that we are all expecting Professor Rubini to tell us on the imbalance in world economy has such imbalance been solved? Well, I would start saying that of course the beginning of the year has been a period of significant turmoil in the financial markets, significant correction of U.S. and global equity. The triggers are many, the first one being concerns again like in August and September, that China might have a hard landing and the hard landing of growth might lead to a collapse of the currency in the stock market. I don't believe China is going to have a hard landing, but the market starts to believe that. Secondly, the U.S. economic data are mixed and weak, the latest ones and maybe the Fed made a mistake in starting raising interest rates from zero in December. You have this geopolitical risk in the Middle East and the rising conflict between Sunni Saudi Arabia and Shia Iran. And those tensions are affecting markets. You've had this collapse of all prices. Collapse of all prices if it's driven by a positive supply shock should be good for the global economy and instead it seems to be rattling financial markets. I think for a couple of reasons. One is that maybe it's driven not just any longer by a positive supply shock, but also about concerns about aggregate demand globally, weakness of growth in China, weakness of growth in emerging markets, weakness of growth in the United States. So if the fall in all prices are reflecting weak global growth is bad news about the global economy. That's one of the factors explaining it. We also have concerns about what's going on in Europe. The migration crisis, terrorism, the risk of Greek exit from the Eurozone, the risk of British exit from the European Union, austerity and reform fatigue in the periphery of Eurozone, bailout fatigue in the core of the Eurozone. People already started to worry about this integration and Balkanization of Europe and the Eurozone. We have now stresses in credit markets where high leverage companies in all energy but other sectors are now subject to significant stress in the United States and other parts of the world. And after years in which revenues and profits of corporations have been growing very robustly right now, there's a bit of a slump in US and global earnings and top line and bottom line. So I think it's like a perfect storm of all these things happening. And the specifics of China, I would say the following thing, markets tend to be manic depressive, go from excessive optimism to excessive pessimism. In a year ago, they were believing in this rhetoric of the Chinese government, that China could achieve a soft landing, that could maintain growth at 7%, that the Chinese were a bunch of super-heroic technocrats who couldn't do any wrong. And now they've gone to the other extreme of saying the policymakers are incompetent, they cannot stabilize growth, the currency, the stock market, they're lying and cheating, growth is not seven, not even six, is four going to zero. We'll have a hard landing, it's gonna lead to a collapse of stock market and the currency. And my view for the last few years on China's been neither a soft landing or a hard landing, I would say China's gonna have a bumpy landing or a rough landing, in fact to give you an estimate, I would say growth this year is not gonna be seven, it's gonna be somewhere in the low 6%, that is a bumpy landing and eventually by the end of this decade, potential growth in China is not more than 5%. So the good news is that if China's gonna have a bumpy landing, at some point, the markets are gonna calm down and they're gonna not worry about the collapse of the currency and the stock market and that's the positive but it's gonna take time because until now the data are negative and people are overreacting to what's going on in China and until things stabilize and there is more policy action the PBOC will have to do additional runs of easing, you have to use fiscal policy at the central level to boost aggregate demand, you have to do a variety of structural reform to boost economic growth and those things are gonna take time but on the negative I would say there is the fact that the Chinese are sticking with this objective of maintaining growth at six and a half to 7% when potential is going towards five and the only way to do so is to do new rounds of credit fuel fixed investment that imply more bad debts, more bad assets, more bad investments from commercial to residential real estate, to infrastructure, to excess capacity industrial and manufacturing sector where with the steel or cement or aluminum glass plates and many other sector there is excess capacity and there's not the willingness to shut down those firms and factories that have this excess capacity and therefore I worry that right now because of political arguments they need to double GDP within the decade is a political goal, people are emphasizing again maximizing growth as opposed to the rebalancing of growth from capital intensive resource oriented export and CAPEX towards more consumption, consumption of services and labor intensive growth that rebalancing is more rhetoric than actual and therefore there's an attempt to kick the calm down the road that implies more debts, more bad assets, more bad investments and eventually that could slow down the economy more than otherwise. So the good news is not a hard landing the bad news is that the policymaker seems to be not willing to do some of the necessary adjustments that are necessary to lead to that rebalancing of growth in a more sustainable and balanced way. So it's a bit of a mixed bag. I want to ask a question about the RMB. Okay, on the Chinese pregnancy. Raid. You ask about the currency? Yes. You know there's a concern that China's gonna let is the currency depreciate sharply. I think, I don't think that's gonna be the case and not gonna be the case because net exports in China actually are rising the current accounts surplus is rising. Actually export growth is doing okay on a sequential basis. The six, seven million college graduates in China don't want to go and assemble t-shirts or even iPhones in factories. They want service jobs and for that one you need to have a stronger currency not a weaker currency. Right now China's currency is member of the SDR this is an exclusive club. We've rights also come responsibilities if China were to depreciate by say X percent, five or 10 currencies in emerging markets they're gonna fall by two X or three X that's gonna lead to rising inflation. It's gonna lead to a sharp increase in the real dollar value in local currency over their debts. It's gonna lead to financial crisis in emerging markets. And the Chinese say we're being responsible stakeholder of the global economy. We did not let our currency depreciate during the Asia financial crisis. We didn't let our currency depreciate during the global financial crisis and now being a member of the SDR we have to be responsible stakeholders and therefore the Chinese currency has to weaken in the sense that if you track the US dollar and the dollar might appreciate as the Fed exit zero policy rates the dollar might strain the relative to Euro, the yen, commodity currencies emerging markets and therefore Chinese currency has to depreciate gradually relative to the US dollar. The problem is that when you move your currency by one percent in China people feel the worst and they say it's gonna be five, 10, 15 percent. Why? Because the Chinese currency policy is not transparent. They want discretion of doing what they want but effectively then they have to intervene to maintain stability with US dollar because otherwise people believe there's gonna be the worst and then the capital flight accelerates that tightens domestic financial condition. I think the way out for China will be to move to a formal basket peg in which the weight of the dollar, Euro, yen, emerging market currency is given so if the dollar goes up say by five percent relative to Euro and yen then the Chinese currency can depreciate based on that weight by say two percent relative to US dollar and people know that two percent is two percent is not gonna be five, 10 or 15. But since the Chinese so far they want to have discretion rather than stick to this rule then there is no transparency and people expect the worst out of China and of course making moves on the currency at a time where there is concerns about growth and concerns about the stock market like it happened in August and happened again earlier this month leads to an exacerbation of those market volatility. So I think the Chinese both on monetary policy and exchange policy on the stock market have to move gradually to a more transparent and open sets of rules so that people can track what they're doing in a credible way. Got it. Thank you very much. Very impressive. Mr. Tang Wei Yin, one question. The government is appealing for innovation. If I were a young man, youngster, what proposal, what advice would you give me? I'm sorry, I cannot give such an advice because it has been said that innovation cannot predict it if government officials could give such predictions to entrepreneurs. These officials themselves should become an entrepreneur. I'm not in agreement with the concept that government should give subsidy to companies and enterprises. What government should do is to provide a level field for competition. Then the success and failure depends, relies on the entrepreneur's perception of the market. Now people are discussing what sector should the government encourage or provide support. We see that such thinking has led to failure in the past or there will be over capacity as you have seen in the past. For example, solar panels is a classic example. Thank you. But I would like to ask another question that governments should not issue too many policies, industrial policies. But what do you think? What are the sectors that are more promising in the future? But I cannot predict for the future that successful enterprises nowadays were not forcing 20, 30 years ago in 1990 Bill Gates himself did not have a very good opinion on the development of internet. Internet later found an extraordinary growth. Entrepreneurs need freedom. They don't need anything else. Zhang Yicheng, let's come back to the stock exchange because Zhang Weiying has explained on the innovation. If you have money at hand, would you invest on Chinese stock market? Would you exchange your renminbi into US dollars? I think for me, stock markets in China, I mean, you can find three different stock markets in one stock market in China. For example, blue chip board, which is a main board. Its valuation currently is not that high now. For example, there are many big banks or many big telecommunication or petroleum companies, such as China Steel, et cetera, et cetera. Their PE ratio is only 12 times. It's not that expensive. And another board for SMEs, PE ratio is already 30 to 40 times. And for entrepreneur board, at the end of last year, the PE ratio was 70, 70, and now it's 50 to 60 times. So if you ask me if I want to invest in equities or stock markets, I will invest in blue chip stocks. In terms of its dividends yield, it's already five or 6%, which is not that bad in terms of return. But for a startup board, you have to be very careful because of course there are good startups, but most of them maybe will disappear in 10 years. And in terms of exchange rate, I don't think there will be huge devaluation of renminbi in the future. As Mr. Rubini just said, we have current account surplus which is still very high. And the overall economic situation is not bad either, and we have very strong foreign currency reserve. And Chinese government also will save its face now that we are already in SDR, as we are already in SDR currency. PBLC said they were packed to a group of currencies, not only to US dollars. If they can give more clearer guidance to the market, I don't think there will be huge devaluation for renminbi in the future. Mr. Shi, would you want to say something in terms of financial market? Again, stock market issue, renminbi exchange rate issue, P2P issue, or some pension schemes in China. Pansy schemes in China. How do you look at these Chinese financial problems? So today, you want us to talk about new normal. So actually, I don't really understand new normal. What's new normal? Do you mean the normality in the new era or new normal in a different era or in the current era? Do you mean ordinary state of ordinary condition or regular condition or normal condition? What do you mean by new normal actually? Do you mean we have to think of this in terms of common sense? If we judge all this from common sense, I think we should believe in common sense. There is one stock in Chinese stock market which is called P2B, P2B. And actually, this company changed its name and then their stock increased for 10 days. So we really have to start from common sense. If anything which does not follow the normal or regular rules of things or rule of thumb, we should not believe in it. Mr. Zhang, many of you talked about dead companies or zombie companies. So Mr. Zhang Fangyou, we know that Guangzhou automobile group has been doing very well. But do you think there is indeed a excess capacity in China? How to reduce over capacity in China? Actually, we indeed have over capacity in manufacturing in China. That's why government has adopted different policies to reduce over capacity. So we have to follow what central government wants to do. So we have to reduce over capacity, which is a reality. But I think it's a, the over capacity can have a cyclical and a structural aspect. If it's a structural over capacity, which means we have too much capacity, too much of idle capacity. So for car industry, even last year there was a 4% of growth in car industry. This means if you have good products, you can still sell your cars. You can still use your capacity. But if you don't have good products or your costs are too high, then you cannot sell cars, then you have over capacity. I think the same issue exists in other industries too. There are, there is indeed structural over capacity in other industries. How do you reduce idle or useless capacity and increase the usage of useful, so-called useful capacity? This is what Chinese companies have to do now. For example, telecommunications or mobile phone producers. They also have to face this over capacity issue. Now, Chinese economy has been slowing down. This will also, as this was also required companies to reduce their over capacity. In other words, to better use your capacity and reduce your idle or useless capacity. Different cities and different regional governments have been issuing policies and adopted measures to reduce over capacity. For example, they merge different companies so as to reduce capacity without causing unstabilities in different areas and different cities. This is very important. Thank you. Professor Rubini, I'd like to hear you about supply sites, reform. What do you look at supply site reform from an American point of view, supply site reform? Can you give us some insights? And then I will ask Mr. Zhang, Professor Zhang to follow up. Yeah, I think that China, like other parts of the world needs, call them supply site reforms or structural reforms to rebalance its own economy. I think that three or four of them probably are key. The first one, as was pointed out by many other, the panelist, is there is now a significant amount of excess capacity in industry manufacturing, steel, cement, aluminum, glass plates, even the auto sector. In China, I think there are 100 different automakers. In the US, we have three. So the auto industry in China today looks like the US 100 years ago. So massive consolidation has to occur. And in many other sectors of manufacturing, there's excess capacity. The reality to do so, you have to eventually do the side that you're gonna shut down some state-owned enterprises or shut down some factories. And of course that on a transitory basis implies rising unemployment. Some people have to leave individual firms, individual sectors, individual cities and regions and gradually move to the new industries of the future. Many of them are gonna be in the service sector. And I don't think that the employment problem is gonna be in the medium term a severe one because even with growth rates, say, potential of 5%, first of all, there is aging of population, so there is less labor supply. And the service sector tends to be much more labor-intensive than capital-intensive industry. And therefore, once the rebalancing of growth has occurred, China can maintain social stability and near-full employment, even with a growth rate of 5%. But politically, I think the nervousness is that if you shut down thousands of these firms and SOEs like Premier Zhu Rongji did over a decade ago, there'll be transitional unemployment rate and that's gonna lead to instability. Now the solution to that problem is a second piece of structural reform is to have the right types of fiscal policies. Today in China, every time there is a slowdown of growth, the fiscal stimulus takes the form of another round of credit-fuelled fixed investment that implies more bad investments, more bad assets, more bad debts. What China instead needs is to have a fiscal policy where you're building a social safety net. If people have unemployment benefits, if they have paid healthcare, if they have pensions, if they have ways of getting reskilled as they lose jobs in some sectors and have to move to another one, if people can be allowed to move from one city to another and not having issues of migrant workers and registration, that readjustment will occur and you'll have a safety net so that people are gonna accept that and the political and social instability is gonna be constrained. So you need a second pillar of structural fiscal reform. And the third one is that the allocation of savings and investment and of credit has been driven by politics because most of the financial system were state-owned enterprises and you have to have a better and more efficient allocation of saving to investments not to the state-owned enterprises being subsidized but to the private sector because the private sector is gonna be the one especially small and medium-sized enterprises, startups are gonna be creating the new jobs of the future in the indices of the future, tech, innovation, services and so on. But that implies that then you have to stop the moral hazard of bailing out everybody. You have to allow some financial institutions to fail. You have to allow some borrowers to fail and therefore impose some degree of market discipline that's gonna force then those in the private and public sector so he's allowed otherwise to adjust operationally and financially. So you need SOE reforms, you need the fiscal reform, need financial sector reforms and then if you do it in a coherent way there will be transitional costs but they're gonna be achievable and you also need reform of the system of registration to allow people to move from where the jobs are declining to where the new jobs are gonna be. So those are the four key reforms to be made. However, the imperative of maintaining growth closer to 7% means that China is doing all these reforms more slowly when it's optimal and desirable. They tend to kick the count down the road rather than doing it more front loaded but kicking the count down the road you're creating a bigger financial problem down the line. So the question is at which point President Xi having cracked down on corruption have established his own control on the major political and economic power is gonna feel like it can front load some of those economic reforms. The sooner they're done, the better it's gonna be. The later they are done, the greater the risk of a harder landing, I would say. Okay. Wei Ying, do you have anything to add about this public sector reform? Professor Zhang. So plus I reformed as Mr. Rubini just said, should not come from NDRC or central government. As we just said, over capacities due to companies which cannot produce what consumers want. So in order to solve this issue, we have to let some companies die or disappear like zombie companies. For example, some SOEs should let them fail in the steel industry. That's exactly the case. SOEs are not shut down but private steel companies are shut down or did not receive help. So we have to let the market play a bigger role. Thank you. So, okay. You first, Tiwen. Please, please call the door, Tiwen. Okay. Chi Chen. First, I come from the young global leader. I would like to ask President Shi. Everybody was talking of supply-side reform. That all of you said that the risk will be greater in 2016. This is not conducive to innovation against such background. How would you lead innovation work? Everybody will have a turn to speak. Supply-side reform, I think there are two levels, one on the macro policy, the other on the micro level. For the macro side, the current reform centers on reductions of taxes and the tax-oriented policy. From the micro policy, I am in much agreement with Professor Tung. Entrepreneurs' perception of the market is important for supply. They don't need outside advice or help under such circumstances. How do we look at this supply-side reform? I think if you could do macro reform, then go ahead. But at the micro level, then leave the reform to us for me on financial risk. I think in the past year, in general, government ministries are overstressing on innovation, especially for the financial sector in China. It's not a market-oriented financial circle. It's difficult to undertake reform. It will increase the risk. I think that the tempo on this reform should be lowered a bit, at least for the time being. Secondly, what we should do on the financial market, a multi-tier financial market. For example, government support is not that strong. There's not yet a bond market that we have more than 10 years of experience in such reform on the bond market, on the equity market, apart from improving the performance of the equity market on the PE ones. You should do reform. That should be sufficient to promote the growth of the stock market. For the equity market, we should not overemphasize on certain forms of trading. I think this is too risky and too early for China. Is there any other questions from the audience? I'm a journalist from JIC and I will ask Professor Zhang. From last summer, financial markets are undergoing turmoil. Public authorities have undertaken policies. Such turmoil has continued this year. What do you think the supervisory bodies should do in other words? Apple Pay has been introduced into China. China Union Pay is progressing steadily and such introduction into China isn't a bit late at this time. We will shorten your reply. Okay, simply put, I think the biggest lesson from the equity market is that government has overdone its job. Too much intervention from the public authorities. Government would think of using equity market to balance the Chinese economy. Then if it doesn't work, then government would intervene in buying stocks that would not lead to a healthy development of the stock market. For a healthy development, government should withdraw from this market and leave the market to professionals. Government should only set basic fundamental policies. That's all. Wontau, what do you think? In the beginning, the negotiations were difficult for bank cards, whether for Visa or Master. We stake on one principle. Apple, as a handset producer, is providing intermediate product. The Apple company doesn't take part in sharing the benefits. Now Apple has put forward such a request. The foresight agreement has been in practice for many years. Nobody has ever asked to share the profit. In fact, we are helping Apple to sell your handsets. So you should charge more fees so that the banks give it the name, calling it an Apple fee. This is a breakthrough of the traditional model. Your question on whether Apple has come too late, I think it all depends on how you look at it. How late is too late? If it's too late, then we will do nothing at all. Apple doesn't believe that it has come too late. Okay, last question from you, please. A short question, one sentence. They will give you a very brief reply. Rubini, thank you for talking about the Maniaco depressive markets. But we also know communication is about who received but also who sends it. Obviously there's a consensus that the communication from the Chinese government side needs to be improved on explaining. What would be your recommendation, giving the Chinese system? How can we have the Chinese government of the central bank be probably as subtle when he speaks as Janet Lennon or Mario Draghi? What would be your advice maybe on the other panelists on how the Chinese strategy and policy is better explained because what I realize, especially here, is that there is a big, big, big uncertainty which creates fear. I do agree with you that it's a problem, both communication and also transparency. For example, there is no transparency about the GDP number and that's why people don't believe those numbers and the Chinese can do more to adhere to the international standards that say the IMF is imposing on revealing more data about your economic and financial conditions. Secondly, I think that the transition to a more flexible exchange regime was botched, was not communicated properly. Effectively, China should be moving to a basket peg but if you don't have an explicit basket peg that says this is the weight of the US dollar and this is the weight of other currencies, then when the Chinese currency moves by one to percent, people believe this is the beginning of 5, 10, 15 and that leads to the acceleration of capital flight and then need to intervene, to stop it and capital control and you get a mixed signal. And the same thing for the stock market. Unfortunately, the Chinese fed the stock market bubble because after the real estate market bubble went bust, Chinese savers were earning negative returns on their deposits. Then they went into the shadow banks that were giving them high return. Then they cracked down on the shadow banks, giving capital control they cannot invest in foreign assets. So the Chinese started feeding an equity bubble by allowing a borrowing at the margin and millions of people started to go and borrow and join brokerages and that created that bubble and that bubble went bust. And once when they bust for a while they were not doing anything, then they started intervening, then they stopped intervening, then they introduced circuit breakers that are not designed properly and therefore both the design of the policies and the communication of policies has been messy at best. So I think it's a bit of a learning experience, learning about how market react, learning about being more clean in communication, being more transparent on the data and hopefully slowly, slowly that's gonna occur but certainly there is a lack of credibility, there is a lack of transparency and there is this issue about communicating properly what you're doing. I think that's a challenge that the Chinese will have to face. Okay, now we have a normal time, now we allow panelists in one sentence to describe what are the challenges you are facing now. Mr. Zhang, give you five seconds to talk on this topic, the economy. Oh no, just one term, not one phrase. You have it. And to seek progress in difficulties and mutual risk. Wen Cheng, I will remain immobile, more instability. Professor Rubini, what term would you give to sum up the current situation? Stop kicking the car down the road and be serious about structural reforms and about rebalancing because the more you wait, the bigger the problem gonna become. Okay, thank you very much. Thank you.