 China's outbound direct investment has been increasing steadily for the past 14 years, and in 2015 surpassed foreign direct investment for the first time. It now ranks second in the world for investment, next only to the United States. Largely fueled by a surge in overseas mergers and acquisitions by Chinese companies, China's outbound direct investment covers more industry sectors and business destinations than ever before. While the country continues to adjust its economic structure and open up further, Chinese firms are looking to develop and upgrade their business models to make the most of global markets and their resources. What does China's outbound direct investment mean for the world economy? What strategies should businesses adopt to become more competitive and agile? With investments growing at 20 per cent per year, how are Chinese companies' global investments transforming industries and markets? Why and how should companies take advantage of this trend and reap the benefits from adopting a global perspective? China's Pivot to World Markets Good evening, ladies and gentlemen. It's exciting to see many old and new friends, the sightseeing debate in Davos. Throughout the years, we have discussed the transition of China's economy and its overseas investment. Last year, China's overseas direct investment was increasing and surpassed the investment coming into China. This morning, President Xi Jinping also said that over the coming years, five years, China expects to make 750 billion U.S. dollars of outbound investment. So there is indeed a pivot of China to the world markets. I will host this very important session, mainly in Chinese, so please pick up your translation devices. Good afternoon. Welcome to Tai Xing debate on China's pivot to world markets. I am editor-in-chief of Tai Xing Media, who should lead. We will be talking about China's overseas direct investment, and these investments are growing at 20 per cent per year. And this morning, President Xi said China is expecting to invest 750 billion dollars more in the next five years. How will these investments from China transform industries and markets in the world? We will be discussing with five important guests together today. First one, Zhang Yichen, Chairman of City Capital, Nouriel Rubini, New York University, Li Xiaopeng, Vice Chairman and Group President of China Merchants Group, United Nations Economic Commission, Latin American Caribbean region, Executive Secretary. Liu Liehong, President of China Electronics Corporation, let's start with one first question. Everyone replies to this question, please. So China benefit from globalization and has contributed to global economic growth in the past years. Now China is not only an exporting country, it also invests overseas, and this grows at very fast speed. So these overseas investment from China, how do they transform industries and markets all over the world? And this year, we are at a critical juncture of the political, politics and economy of the world. Will these represent difficulties or opportunities to China's overseas investment? So Mr. Liu, you start, please. Economic globalization drives the result of productivity growth, and economic globalization has also driven the overall growth of the global economy. China has been starting its economic reform more than 30 years ago and has integrated into the global economy, and China has changed a lot. Now Chinese started to invest overseas, and this has increased at a very fast pace in the past two years. In the past two years, like you just said, China's overseas investment abroad has surpassed the FDI in China, and this trend will continue in the coming years. And this indeed is an opportunity for Chinese companies to better integrate themselves in the world. For example, in my industry, the electronics industry, in the past we only export our products abroad, but now companies in our industry started to go abroad. We started to manufacturing abroad, for example, Guang Jie technology, one of our branches who manufacture monitors used to make in China, but now this company already set up four factories abroad, so they are manufacturing abroad and selling abroad. China's electronics corporation has been going abroad, also in terms of IT technology, in Latin America or in Africa, we invest in important major IT projects locally, for example in Ecuador, we help them to set up a emergency management center. This center covers major cities of Ecuador in terms of security, emergency management. So it can in the future help Ecuador to better manage their security, and this already produced positive effect. Their security situation has greatly improved, and also last year this system that we helped build has also helped them to manage the relief activities after their earthquake last year. President Xi also visited this center when he was in Ecuador last year. So from our perspective, we think not only traditional companies from mining industries are going abroad, even a company like us in the electronics industry, which is more a new industry, we are also going out of China to invest. So this is indeed a change in recent years. Thank you very much. I wanted to quickly give you an overview of what is the relationship between China and Latin America. First of all, we had the visit of Xi Jinping. Precisely, he came to Latin America, he came to APEC, Ecuador, he came to Chile, he came to my organization, and we produced this book in Chinese, in Mandarin, and in English. So it's available. But the thing is, what's happening? Since 2000, the trade between Latin America and China has expanded 23 times the exchange of goods. On the other hand, foreign direct investment has expanded twice, from $6 billion, let's say, in one decade, the 90s, to almost $10 billion per year, which is not much yet. We want more. But the thing is that, unfortunately, the relationship with China has concentrated basically on five products, soybeans, copper, or mineral hydrocarbons. So we have to expand and diversify. So this is what we discussed with Xi Jinping when he was in Latin America and the Caribbean. And he proposed a formula that is 1 plus 3 plus 6, which means let's come together once, because of course Latin America is far from China. Come on. I mean, we are in your very last horizon. But now you're coming, and you're coming, I think, to this 1 plus 3 plus 6, which is to base our relationship on trade, of course, investment, financing, and overall cooperation, of course. Six sectors, infrastructure, transport, energy, and natural resources, agriculture, industry, and science, and technology. Now, where does we feel that Latin America has a huge opportunity in agriculture? I mean, you have 1.3 billion people, right, to feed. You're transforming your economy and your consumption patterns. And you are going to the cities. Your urbanization process in China is over already 50%. So your people are changing. And we can become really a very important partner on this, because China only has 6% of its land is arable, only 6%. And you have very little water, fresh water. So we believe we can build a strategic partnership in energy, in infrastructure, in agriculture, and go beyond commodities. And of course, on culture. We are, and let me just finish by saying that Celac, the community of Latin American states, is building a very strategic relationship with China. We already had a meeting in China of the ministers of foreign affairs in February two years ago. Now, next January 2018 is going to be the second meeting. It's going to be in Chile. And this is going to be very important, because China has been so pragmatic that regardless that many countries in the region, out of the 33, many of them do not have diplomatic relations with China. They have them with Taiwan. But regardless of that, the countries of the region want to be a trade partner and an economic partner with China. So they are really coming together to establish this relationship. Now, of course, the only way to do this is in an integrated fashion. If we really put our act together in Latin America, we can probably progress. We have had already the visit of Wenjiabao, or Li Keqiang, and of Xi Jinping. That is the level of relationship that they want to establish with Latin America. Now, Latin America needs to get its act together and prepare ourselves for a more, I would say, powerful relationship with China. Thank you. Please. OK. Thank you, Mr. Lin. I would like to talk about China's ODI. Recently, we found good numbers that are about China's ODI. 50% growth in 2016. 14 consecutive years' growth, the 2-2 among the number two in the world. The situation showed a news that China's economy is good. The question is how to manage the investments in a broad, independent, I think, three points I need to mention. First, we need to share benefits with local partners. We know the bigger cake we make together, more profits everybody can get. Second, we need to pay attention to localization. Recently, our company brought here many people who are 98% total employees. We set up a good training program to train the people for sustainable development. Third, we need to provide a good plan of whole package solution. The meaning is we can provide an integrated business model to local partners. We call the special business model is PPC. The meaning is port, park, and city. First step, we can construct the port. And the second step, we can develop the industry park. And finally, we can build a beautiful city behind the port and the park. Generally speaking, we can provide a good special model for local partners to achieve a win-win situation. Thank you. Thank you. Professor Vinny. Yes, I would argue that probably the economic and financial relation of China with the world have changed over time. So for a long period of time, China was mostly doing trading goods and services with the rest of the world, having large and growing trade and current account surpluses. Most of the foreign direct investment into China and until recent years, there was not as much FDI done by Chinese firms abroad. And the resulting current account surpluses implied an increase in the net foreign assets of China abroad, but those net foreign assets were essentially the accumulation of foreign reserves by the central bank. And then when there was a creation of a sovereign well-funded investment also brought by the government institution. I think that in the last few years, the changes occurred is that China has started to liberalize its attitude towards foreign direct investment, as realized that Chinese firms have become large, both private and state-owned enterprises that are national champion in China, have an important role in trying to diversify in starting to acquire foreign firms in becoming global champion and not just national champion. And therefore, there's been a proactive policy of allowing these firms to do mergers and acquisitions around the world. The first stage of it was, of course, China being very interested in making sure that the supply of natural resources would come to China, investment done in natural resource, all the energy in other sectors, from Asia to Africa to Middle East to even gradually in Latin America. But now that Chinese firms, both SOEs and private, have become also important and key and strategic in manufacturing industrial sectors now, that opening up has also led to then foreign investments in a variety of other sectors. I would say that this strategy of China is probably part of a broader economic state strategy, as we know there have been now overinvestment in China, overcapacity. China is a huge amount of foreign reserves, has a lot of natural resources like steel and cement that are in overcapacity. And therefore, China has come out with a variety of plans. One is the Silk Road. The second one is the Belt and Road Initiative. The third one is the Bricks Bank. The fourth one is the AIB. And finally, in a number of regional trade agreements that has proposed to Asia and Pacific in Latin America, is we are building greater economic and financial relations. So I think it's a part of not just an economic diversification strategy, but also building stronger economic, political, and also geopolitical relationship with Asia, with Africa, with Latin America, and many other parts of the world as well. So there's a greater, how to say, international economic statecraft strategy is behind the economic policy towards foreign direct investment of China. OK, I think everybody talked about more on the macro level. I'll probably focus more on our own experience. We started investing overseas about 12, 13 years ago. And initially, we were mostly investing in manufacturing businesses in the US or in Japan, where we can help them basically relocate their manufacturing capability to China as China was developing as a factory for the world. So the value creation is more on the cost side by lowering the cost. And that game basically changed after the 2008 after the global financial crisis. Everybody else's cost was going down, but China's cost was actually coming up. But China, at the same time, was developing increasingly as a consumer market. So then our investment focus started to change. We started to focus on buying companies that could benefit from the growth of the middle class consumers in China. For example, in Japan, we bought one of the leading tableware makers. It's called Narumi. And we introduced it into China first into the likes of the Pacific Dragon Airlines first class launch, first class cabin, then five star hotels. And to the point that they set up boutique shops. And at the same time, we also look at sectors where China is doing most its import. For example, the biggest item China imports is actually nor petroleum. It's actually semiconductor. So last year, we were investing in this company called OmniVision, which is the third largest imaging sensor maker in the world, the largest being Sony, which almost supplies exclusively to Apple. The second one is a Samsung, which more or less supplies to itself. And this company was trying to compete with Sony and Samsung. But until the China market developed, all of a sudden you have the phone makers like Huawei, like Xiaomi, like Coolpad, and so on and so forth. The company turned it up. We helped the company to break into all these vendors and to these customers. And to the point that the company over a course of one year, in 2014, majority of the market was in the US. But by 2015, 80% of the market was in China. So these are the type of investment that we see that can capitalize on China's growth. So from that perspective, from a macro level, this sort of investment, obviously, is mutually beneficial both to China as well as to the companies that we're investing. Thank you. Now I'm going to ask everybody one question I have prepared. I'd like to ask all of you a question. Can you tell our audience how Chinese investors as a whole perceived by the local people there? And we know that the public utility investment is a bright spot in Latin America. So what's your advice to Chinese public utilities companies heading to Latin America? It's a very good question. First of all, I guess that we have to know each other better. And I think this is a part of the relationship that has to come together. Chinese, it's differently perceived in different parts of Latin America. We cannot make a general point. For example, in Ecuador, the Chinese investors are very much related to technological development. So they are not related to extractive industries. On the contrary, in Peru, they are seen as very much oriented towards extractive industries, even in Chile. And in Peru, for example, the problem is how is the dialogue with the local communities? That's another of the huge problem that extractive industries do have. So little by little, the perception is changing. At the beginning, there was a lot of fear. Fear that the Chinese investors were coming to exploit our natural resources and full stop. But this has been changing over the years because we have been already in touch for more than 15 years. And these visits of Li Jinping, for example, Xi Jinping, when he came to Chile, he came to a media summit. Probably you were there. This was a media summit of 100 media reporters from China and from Latin America. And the intention was precisely to change the perception of the people between the two. I mean, we have to learn a lot about each other. So, yes, there are some parts of the region that feel that China is coming with their own workers, with their own people. There's other parts of the region that are more prepared to understand that foreign direct investment is very well received, that we can be partners, that we can do things jointly. Now, the fear that we have in Latin America in general is that China is substituting imports. It's becoming an import substitution strategy because as they are moving on to manufacturing, they are substituting many of the products that were manufactured as well. So, how is this going to have an impact on the general change? Now, let me tell you one little anecdote. The day that Xi Jinping arrived to Chile was the same day that Donald Trump announced that he was not going to sign the TPP, the same day. So, can you imagine the impact when he came? Xi Jinping came talking about free trade as he did this morning very openly. We want to build a relationship with that and the other. And China now is the second most important trade partner of Latin America after the U.S. Maybe this is going to change very soon. Now, you haven't yet invested in Latin America. We have invested in copper mine and power plants, but city capital as such hasn't. So, can you tell us a bit about your experiences in Latin America? Now, of course, the countries are all different, but can you tell us a bit about your experiences? Now, Mr. Li, now, China Merchant's group is one of the leaders of China's outward investment push. It's in particular in Western and Eastern Europe, and it's one of the seven top Chinese investors. Now, it's one of the seven top investors under the One Belt One Road program. What's your understanding of the One Belt One Road program? Well, this morning, President Xi Jinping reiterated Chinese support for economic globalization, and went through some of the achievements in recent years of the One Belt One Road program. Something that we have some experience of. May I cite a couple of examples? Now, we were formed in 1872 as a group starting with steamships and ports. Our business has expanded since then, including port and shipping projects abroad. Under the One Belt One Road program, this very old company has changed its focus. We've become more involved in ports and transport projects across the whole region, including even real estate in the areas where there are ports and transport projects, bringing opportunities to all countries involved. Now, I mentioned the PPC just now that started at the beginning of reform and opening up with the port of Shokou in Shenzhen 30 years ago. It started with a port then an industrial park and then city districts. That model was pioneered there. If you go to Shokou, it used to be a fishing village. It's now part of a modern city with a population of 10 million. We're trying to take that model abroad and in many places abroad, it's brought a lot of new employment. It's helped set up a fuller industrial value chain. My experience is that One Belt One Road is not just a good medium for China's openness to countries abroad. It's also a way to share Chinese experience with the countries involved. What might One Belt One Road and Chinese Albert investment do to change the world value chain? Well, if we look at One Belt One Road we have Chinese nuclear and high-speed rail technology which are world-leading and they've been taken along the One Belt One Road. So the Chinese mutual funds and roads are mutually beneficial, fair and inclusive as a national strategy and I hope to gain support of the investors present in the room for it. Thank you. I think everybody has his own or her own take on OBRR project. Thank you for sharing yours. Mr Liu, your company was relatively late in going abroad but now you are very active in investing abroad. So you have more overseas direct investment or MNA projects. That's the proportion. And in terms of technology European countries in America and U.S. they don't want China to invest in sensitive technology sector. For example, recently Accentron project has been stopped by German government. So have you ever experienced any of the these kind of situations like that of Accentron? Thank you. Our group, when we started investing abroad we have different measures and approaches. Now we focus more on direct overseas investment. For example, we will set up a branch locally. For example, I said we invest in Latin America or in Brazil, in Argentina. In these countries we already have many factories, have set up factories and it's been operating relatively well in Argentina and Brazil and less in developed countries. In developed countries we have relatively fewer investment projects but we've been doing MNA in developed country markets. For example, a couple of years ago we bought one of Philip's branches, namely colored television set sector. So now in Europe Guanjie technology, which is a branch of China, electronic cooperation bought this Philip department in Europe. So we start to roll out not only traditional television set but also smart television set. And we are gaining market share in Europe, in Asia and also in Africa. So our company has different approaches in our investment overseas including direct investment or MNA. Have you ever encountered any difficulties? Actually, in integrated circuits we have encountered some difficulties especially in MNA. But for us as a Chinese company as a Chinese IT company we think we have to transform, we have to enter into high-end segments and develop core technologies. So as a Chinese company who invests abroad such as in integrated circuit I think people should have an open attitude towards investments from China in these areas. People should be open to cooperate with Chinese companies in these areas. You should not always say no or close your door in these areas. As President Xi said this morning trade protectionism close your door. Maybe you can avoid some problems, some issues but you also shut sunshine and clean air outside. Developed economies and developing economies should have an open attitude towards China's investment overseas. Thank you for sharing with us. 2017 will be a very delicate year for US-China relationship. From your previous comments we can say that you are also very concerned about the populism America First and anti-globalization voices of the Trump team. But on the other hand it seems that Donald Trump welcomes anyone that claims to bring jobs to the US. Will that become an opportunity to Chinese investors in the US? How will all this play out? Certainly as you argue this is going to be a critical year in the relations not just economic but also political between US and China. There is a risk of course that the US is going to become protectionist. The US might brand China a currency manipulator like other countries that US might try to restrict by tariff imports trade from China given traditional kind of accusation in my view false that China is involving unfair trade in dumping its goods in having its currency being undervalued and so on and so on. So there is this dimension that creates a variety of potential for trade tensions. As you argue US wants foreign direct investment to create jobs in the United States and then the foreign direct investment relation with China is going to be complex. First of all, US unlike Europe has a system for vetting foreign direct investments in the US to check whether there is any issue about national security and so on. And even Europe where traditionally this has not been the case in recent episodes like in Germany and others either concerns about national security or about losing strategic assets or industries to Chinese firms that has been a concern. Secondly, a lot of the FDI that has been done by China in Europe but even in the United States two thirds or more of it has been done by state enterprises and by other government entities. And whether you like it or not that raises concerns in the US and Europe about whether entities that are government owned or are being supported finance subsidized by the government are having too much of a role. And the other dimension of it is a dimension of reciprocity. Chinese have done huge amount of investments in the United States and in Europe but the amount of investments done by Europe in China or even by US have been limited. And have been limited in part because there have been a series of significant restrictions today right before the speech as in she here in Davos the government in China has now signal there will be some degree of opening of foreign direct investment into China into variety of financial services even if it's not clear exactly what's going to be the timeline for this implementation. But as we know China has been restricted the amount of FDI in a variety of sectors are considered as being important or strategic or otherwise including natural resources that have come of course culture media and other aspects of manufacturing. And the final dimension of it that is also of some concern is that the US for example in the space of internet and other types of companies has been open to Chinese firms and Chinese champions like Alibaba, Tencent and he all asked about it have become first national champion in China and now growing globally but as we know Facebook has not been allowed in China and Twitter has not been allowed in China, Google has been restricted in China and so on and so on so there is an element also of reciprocity if US is allowing Chinese firms to operate and do business and investment in the United States or in Europe is there similar types of reciprocity so I think those sets of considerations are going to imply that not just the question of saying we are welcoming FTI by China in the US or in Europe because it's going to bring jobs but also whole series of other issues that are going to become sensitive so I think a broader range of negotiations are going to occur to make sure that the relations on the FTI side are also reciprocal and fair and you name it so it's a pretty complex set of issues we'll have to discuss on a bilateral basis as well. You are very complicated actually if you talk about the complex package where is the possible starting point of the complex package? Well the US has been negotiating a bilateral investment treaty with China that's going to discuss how much you know investment into China is going to be liberalized as well as investment by Chinese into the United States that's one way of achieving agreement over a set of rules about stuff and of course both sides might have some industries that are considered as being strategic or restricted or to be gradually liberalized and so on I think that's one dimension of it that is going to be important and I think the maintaining also open trading relation is going to be important because of course trading goods and services is intimately associated we've also traded in financial assets and portfolio diversification activity and foreign direct investment as well so I think that these things will have to be discussed in a broader context of the economic relations between China on one side US and Europe as well. Thank you very much Mr. Zhang I will ask you the same question your company has been doing overseas investment abroad you are very experienced in this area is 2017 going to be a good year for China's overseas investment or a bad year and your company is very prudent in investing abroad right 2017 well firstly I would say 2017 the total volume of investment will be lower than that in 2016 after more than a decade of continuous growth in particular high growth up to 2015 so if you base it on statistics from Thomson Writers then it's more than 200 billion US dollars of investment now that kind of fast growth has a couple of problematic elements now the earliest driver was the Chinese domestic market they need to upgrade for a lot of Chinese companies so they sought high technology abroad advanced manufacturing medical equipment manufacturers and high end consumer goods that was one part and another part was global asset allocation and what it meant for them particular with concerns about RMB depreciation however in 2016 very obviously a lot of this was due to the gap in valuations between capital markets in China and abroad so trying to arbitrage between China and overseas a lot of transactions were irrational in valuation terms because people simply thought that they were making a buck anyway if they bought it at 20 times and came back to China where things traded at 30 policy measures in China have aimed to bring things back to a more rational footing so a drop in 2017 should not be seen as a bad thing now you may be thinking in particular of recent acquisition of a stake of 80% 80% in McDonald's China this is not an exit by McDonald's wants to expand in the Chinese market and faster but they require a strong local partner to achieve that goal in China China now is the world's second biggest economy no longer reliant on MNC's bringing the whole set of rules that they've been working under in the US or elsewhere to China as a lock-stock barrel and that's an issue that a lot of multinationals have faced in China earlier or later the main competitors of McDonald's for example KFC which is the second biggest worldwide first in China it has 5,000 outlets in China McDonald's only 2,400 outlets why do you think that might be now if you want to do well in China you do need to have a strong local partner that understands the market and helps you to grow faster and in a more efficient manner and the backdrop that I think McDonald's investment was a very good deal in 2017 overall we are taking somewhat cautious outlook in particular with the uncertainties brought by the US transition to a new administration so we are mostly adopting a wait-and-see attitude so relatively prudent ok now if Presidency talked about 750 billion over 5 years that means 150 billion per year where has it been running at more than 200 billion per year in the last couple of years it's been growing very fast Chinese FDI abroad now before we go to the audience let me ask a brief answers from each panelist on this question has do you think globalization is more challenging or less in 2017 one word more or less more more middle and you? your question is whether 2017 2017 globalization will face more or less challenge it's going to be a huge challenge especially on jobs China wants to create 10 million jobs everybody wants to create jobs how are we going to do that just about ok thank you for your answers to that question and I'll now open to the floor for questions would anyone like to ask the panelist a question please state your name and affiliation for Mr. Zhang Yichen Professor Rubini and Mr. Li Xiaopeng so Professor Rubini mentioned China is basically doing statecraft One Belt and One Road is a prime example but a senior scholar from Chinese Academy of Social Sciences was telling me in the past two years Chinese FDI 85% is in Europe or America One Belt and One Road countries actually receive less so I'm wondering how does the profitability of projects in developing countries compared to developed countries China is doing say development in developing countries with One Belt and One Road and doing say in developed countries for commercial purpose is this transition from a statecraft model to a more market firm oriented model more sustainable going forward thanks I'm going to answer a very challenging question let me come in on this very challenging question let me talk about some figures first of all we have total assets now 7 trillion remain B and 700 billion of that is abroad about 10% of that 10% most is in non-developed countries so there's your answer yes but some of it's in developed economies a minority though most of our investment abroad is in developing countries that's my first point secondly generally we get the sense that it's harder the threshold is higher to invest in developed countries they are more reluctant to receive Chinese investment especially from state and Chinese enterprises maybe discriminatory one of the issues in the last year has been a resurgence of protectionism so we would like to call for parity in trade objectively speaking it's been easier for us to invest in developing countries but whether you accept that or not our investment in developing countries has not been exploitative it has not been straightforward single project invest what we are trying to pilot is an integrated plan under the PPC model now that's the one acronym I'd like you to remember start with a port behind that you have an industrial zone a city so what we offer you is a full package who wins from that local people for example in west Africa a country I won't name but we have gone to a city with a very old updated harbor we've moved the harbor to a new location so build them a new port and the old port area is then urbanized between new and old port areas we created an industrial zone to provide employment so local people are very happy with the results of what we did in this west African country PPC in his case was port on the left city on the right and industrial zone in the middle so that model might be an answer to your question thank you well you know there is a variety of investment that China is making abroad many of them traditionally been in emerging markets because of investment in natural resources extractive industries now becoming a huge manufacturing power the biggest in the world there is advanced economies to both acquire brands acquire technology management skills and use it either for production in Europe and US and or for building then production also in China I would say that you know while you could argue that international state craft has been more for investment relating to emerging markets there is also a broader strategy of China saying we have a number of national champions some of them are large state enterprises are becoming even larger some of them are national champions that are private sector firms like in the internet software telecom and you name it that they became very successful given the large size of the protected domestic market and now they are going international and from the Chinese point of view this national champion becoming also multinational corporation globally whether they are private or public is part of the broader strategy of creating a wide range of economic trading financial and eventually also diplomatic and political relations with many other parts of the world so I think that the Chinese have a vision of how they see the role growing in the world in a way that probably United States and Europe do not have Do you have anything to add Mr. Zhang? No I don't have anything to add Do you have anything to add Mr. Zhang? I don't have anything to add Okay yes I come from Abu Dhabi from a petroleum company and we've seen a trend in the Middle East now of look east as opposed to look west and in particularly in Abu Dhabi some of the concessions which have matured now have been given to the Asian firms I just wondered what China's approach is on one hand US is a little bit wavering in the Middle East region and the shale has become such a success so does China have a policy about expanding its presence in the Middle East region particularly in all in gas sector which is really fairly strategic for China So with whom you want to raise your question Maybe yourself Mr. Zhang Thank you for the question I'll try but I may not be the right person to answer it given that we haven't really invested much in oil and gas sector but we do have exposure in Middle East mostly through co-investment relationships we manage money for the sovereign wealth funds of Abu Dhabi Qatar as well as Kuwait so we do cooperate in terms of not only investment in China but also internationally for example we co-invested into a city football group Manchester City together with the royal family of Abu Dhabi and we also co-invested Qatar US authorities many different things including Alibaba and so on so I think Middle East is a very important region for China needless to say given the need for energy and the US as we know is getting increasingly energy independent so to China Middle East will be a lot more important from that perspective but at the same time I'm not a diplomat but I think China has always advocated non-interference type of policy so I doubt very much if China is going to get increasingly involved and build more strategic relationship with the Middle East partners thank you Yichen because this year there has been fast development of development but more recently there have been a few headaches for globalization let me ask about the long term as the last question one to two sentences each from you in 10 to 15 years what will the market be like and what role with will China have in it what are your long term predictions Mr Zhang 10 to 15 years China will be the world's biggest economy I think however I would also say in terms of its influence it may be a different story the U.S. has dominated the Asian world order since World War II but China will have more input into how the world is run long term prediction well we live in a world of uncertainty so it's hard to predict but I would say China certainly will become the largest economy in the world in terms of GDP even if on a per capita basis of course will be still catching up given the rise of China and its growing role economically trading financial and also political in Asia the U.S. and the Obama administration had a policy of pivoting to Asia and a key element of that was also TPP I think what Trump is going to do when it comes to power in January 20 is going to be to repudiate TPP and I think that gives an option to China to go not just to Asia not just to the Pacific not just even to Latin America but all the way to Mexico and even the Mexicans if U.S. doesn't want you after please come and join our own free trading agreement our own agreements about foreign direct investment so if the U.S. is going to retreat and that's still a big gift from globalization and free trade that gives an opportunity for China we heard what President Xi said today to become a champion of free trade and globalization over time President Li I would say one word diversify because with the accelerating of globalization every part of the world can share the benefits that's all Arisha well I definitely think that China will be basically mostly urbanized climate change should be one of their major objectives the energy transition the decarbonization of its economy careful about inequality very much indeed I think it's growing and finally I think that China becoming a global actor should help us think and rethink capitalism globalization and the insatisfaction people feel about these things thank you Mr. Liu for me I think innovation open and inclusion will continue to drive economic growth of the world so I am optimistic in long term and midterm economic growth of the world and China will play a very important role we have a bigger and bigger share in global economy and play an important role in global economic governance thank you thank you everyone let's give them some applause thank you