 Good morning, ladies and gentlemen. Welcome to the first panel of our conference. We're going to talk about the economic outlook in the context of a rising China. I'm very excited to have a brilliant batch of people here in this first session. And I would like to start introducing the panelists to you. I'd like to start with the minister of Ethiopia, Arkebe Okubei, special advisor to the prime minister of Ethiopia, Abiy Ahmed, who you all know, collected the novel. Yesterday, I would like to insist on the fact that Arkebe is part of this, is part of the government, and he is also the mastermind of some of the successful programs that Ethiopia implemented in particular in this sphere of economics. He has written about the transformation of African economies. He's also written about the role of China in Africa, Oxford University Press Books that I highly recommend reading. To continue with Sergej Storzak, right on the right of our seating order here, he is deputy minister of finance of the Russian Federation. He's been in government almost forever. That's what he told me for 25 years and more. So someone who really knows the modern Russia and the economics of it, and I'm looking forward to your insights. Then we have Il Sakong from Korea. He's a long and prestigious career in the Korean government. He was minister of finance from 1987 to 1988, and he has been the person responsible for the success of the Korean G20 presidency in 2010. He's also a scholar. He writes about the economic situation in Asia. He's a PhD from the UCLA University of California, Los Angeles. Then I'm particularly happy to introduce Saladin Mizzouara, the man waving here. I'm introducing you. He started off as a businessman. He's been the CEO of a textiles group, Spanish textiles group, TAVEX here in Morocco. He's been in government in Morocco for something like 15 years from 2004 to 2017. He has been covering different positions which is quite impressive from the Ministry of Commerce to the Ministry of Finance to the Ministry of Foreign Affairs. That's quite a tour, je dirais. C'est très bien de vous avoir sur le panel. On va parler anglais ici parce que la plupart des panellistes parlent anglais et voici l'anglais est plus facile dans les contextes de discussion, économie. Then I'm happy to introduce to you Naoki Tanaka over there. He's the president of the Center for International Public Policy Studies in Tokyo and author of many, many, many books, a very long CV, a distinguished scholar. And there's one book again that I can recommend. I've not read it unfortunately, but I should because the title is provocative and interesting. The title is The Great Stagnation of China. This appeared in 2016. Let's see and let's discuss what you find about the Chinese economy. And then last but not least, next to me Olivier Blanchard that I think in this room everyone knows. He's the former president of the American Economic Association. He's the former chief economist of the International Monetary Fund. He was there at the helm of this organization in troubling times from 2008 to 2015. He is one of the reasons why the world's economic and financial crisis was managed in a reasonably well way. I would say still we're suffering from it or from the consequences, but the fact that this didn't have larger negative effects I think is also due to him. He is Professor Emeritus from the MIT, Massachusetts Institute of Technology. And he is one of the founding fathers of what we economists call New Keynesianism. And if you had read the news yesterday, Bloomberg ran an article, for example, that speculated who might win the Nobel Prize on Monday. We'll all be here again, still here on Monday. And Olivier is mentioned there and we think should be crossing our fingers. It would be so fantastic to have two Nobel Prize winners here in our room. But let's see, this is of course highly uncertain and I know how embarrassing it must be to hear this every year. But the Bloomberg article ended with the sentence saying that there will be a Nobel for those who created the New Keynesianism. The question is just when. So with this introduction, I would like to sketch very briefly how we're going to proceed here. I think we'll have a first round talking about the overall outlook of the world economy. And then a second round where we'll look more deeply into the role of China. This is how this session is set up, the context of rising China. And then time permitting in the third round, talk about multilateralism that goes beyond the concerns that we all have in trade policy, currency and investment topics if we have time. I'd like to start with Olivier Blanchard to give us his views on the transatlantic economy of the United States and Europe where we have funny times really for an economist. We have ultra-low interest rates. We have full employment in many countries, the US for example, Germany, Japan essentially. And we have almost no inflation. And the big question is how can we explain that? Is this going to last? What are governments to do about that? Please Olivier. Thank you for the excessively kind and optimistic remarks. It's a pleasure to be back. I always enjoy this meeting. I came last year and enjoyed it. I thought that I would focus my remarks on macroeconomics rather than geopolitics at least in the first round. This reflects comparative advantage or comparative disadvantage with respect to geopolitics. And I would focus on high-income economies as you indicated because others on the panel are much more competent than me to talk about the rest of the world. I want to focus on what I see as two fundamental forces shaping the economy of advanced economies and by implication the world economy. So the first one really doesn't have much to do with geopolitics or the global. And it is the advent of extremely low interest rates. Now that's much more than a technical issue. It's really a regime change which is going to have profound implications for policy and the way policy is made in the next decade or so. Now the first thing to say is interest rates are amazingly low. As you know the yield curve, the structure of interest rates looking forward for the eurozone is negative up to 25 years, which has never been seen. They are similar in Japan, not very far from this in the US. So this is a global phenomenon and there is every indication that it's going to stay. Some people say well tomorrow morning rates will go up again. But if you look this is really something which started in the mid-80s and has basically steadily taken place of the time and the factors behind are probably there to stay. And to think of the world in which we're going to be exposed to very low interest rates. Now why is this important beyond macroeconomics, beyond just the narrow aspect? It is because it has implications for monetary and fiscal policy. It basically says that monetary policy has been the instrument that governments have used over the last 40, 50 years to try to direct the economy, make it, you know, operate that full employment or something close. And we've come to the end of what monetary policy can do. You see it in the discussions that took place in the eurozone two weeks ago. There's an increasing notion that we've done everything we can and therefore monetary policy cannot be used. So the main instrument that governments have had to basically counter fluctuations is really not operative. So the implication is, well, what else do we have? Unfortunately the answer is what makes things really bad for monetary policy makes things really good for fiscal policy, which is that the cost of borrowing is very low, the cost of deficits, the economic cost of deficits is very low. And so there's more space. But the big issue is that from a policy point of view, monetary policy and fiscal policy are conducted in very different ways. The second process is much more political, much more complex. And I think that the issue we're going to face is whether fiscal policy is going to be used right. And there's a risk that it is not. I'm looking at you, not at you as such, but you as a German, to think that there may well be an issue. And I think that in thinking about what could happen if we have adverse shocks and things like this, this is really first order. This is not the only implication of low rates. It has implications for inequality, for example. And if you're a saver and you rely on bonds as your income, you're in trouble. And this has political implications. So that was the first force. I put it on, you know, it's not related to China. China has played a role in the low rates. But I think it's really something we have to think about. So the second one, the second force that I want to talk about is this nexus between inequality, populism, protectionism, which gets us closer to issues related to China. The facts on inequality are really striking. And inequality measured all kinds of ways, really has decreased until the 1980s in most advanced economies. And it has turned around to different degrees in the US, obscenely so. In France, actually not very much, but the perception of people is that inequality matters a lot. And therefore, even in France, it is a major issue. And this is going to bring a number of pushbacks, reactions, which may be tractable or may be intractable. It's going to lead to a pushback in terms of capital taxation. I think we have to be ready for a world in which wealth is going to be taxed more heavily, in which corporations are going to be taxed more heavily. This may happen smoothly, this may not. The OECD just came out with a plan to have corporate taxation organized at the world, at the global level, and I think that's progress. But I think this is going to be a big challenge. Capital is not going to have it easy. And that has both economic and political implications. The one that I want to focus on and finish my remarks with is the protectionism aspect, the trade wars. Which is nearly not triggered only by inequality, but is part of a general reaction against the way things have been running. And here I want to make a number of points. The first one is the mechanical effects of tariffs. It's actually from a macroeconomic point of view, not a big deal. When we crank our models and we put tariffs in, well, you have changes in relative prices, but they don't do a whole lot. And the reason is for a typical country, exports go down, but imports go down as well, which means more of it comes from domestic production. So you have fine demand which decreases, domestic demand which increases. Reallocation is a bit tough, but you don't get big effects. So if this was the only, we had agreed basically to put tariffs once and for all. I would not like it, but it would not be the end of the world. We would not create a recession. What is much more worrisome in the short run is the induced effect on investment. And that comes not so much from the tariffs, but from the uncertainty, which has come with the trade wars, with international relations. Because if you do not know whether there's going to be a tariff on country X or on good Y, you basically wait. Now, from your point of view, waiting three months or six months is not a big issue. But when, you know, many firms do this, you can have a collapse of investment due to the option value of waiting, and that can be very costly. And that's what we're starting to see, to different degrees. We've seen it took a while to happen in the UK with Brexit, but it's happening. These firms are just waiting, waiting for the next elections in the US, waiting for various things. So this is really the, in the short run, the thing which worries me. In the long run, there are big effects. And basically, we're seeing global trade decrease. And that really, what we're seeing is de-globalization in effect. Not only because of that, not only because of tariffs, but security issues. You may not want to import fridges or refrigerators if they have some embedded component which allows some foreign country to actually know what is in your fridge. So we may see a drastic decrease in trade. Carbon tax is not going to help. It becomes costly to actually have goods travel large distances. Political uncertainty may make you want to deal with suppliers in countries close to you rather than in Asia, for example. I think all this may well happen. And this has major implications. For the short run, not sure. I'll finish with what people are always asking me, which is, well, are we going to have a recession? And I think that I've given my answer to it, which is we're probably going to get an effect on investment, which then may lead to pessimism and consumption going down. So it could happen. In the case of the U.S., I do not think so because we have an administration which seems quite indifferent to spending. And therefore, if needed, my guess is that they'll do the wrong thing, but for the right purposes in this case, you will see a fiscal expansion. I'm much more worried about Europe, where fiscal has many more strings attached, and I'm not sure that they'll do the right thing. So my guess is probably not. I'll slow down. Probably I'll slow down. Probably not a recession. But again, I want a footnote. It could happen. If things get worse, I'll stop there. Thank you very much. Talking about Germany, we believe at the Kiel Institute that we are in a recession. The third quarter in Germany had negative growth. The second quarter, too. Technically speaking, we're in a recession in Germany already. And that, of course, is a drag on the entire Eurozone and EU economies. I've seen Naoki Tanaka who wants to jump in. And why not? I have my order, but I'm flexible. And seeing how eager you are to comment, please go ahead. May I continue the ineffectiveness of monetary policy, which presented by Professor Bransher? So the Japanification of monetary phenomena are now spreading in the world, in Europe and North America. So when we see the negative interest rate, I think John Hicks mentioned about almost zero natural rate of interest. So Mr. John Hicks mentioned the bad harvest in Ireland in 19th century. At that time, farmers didn't want to borrow money in order to seed, in order to sow seeds. So that's the phenomena on natural interest rate is almost zero. At that time, monetary policy will not work. So these are the situations we are now observing. So in this situation, fiscal expenditure will be very important if we face very deep recession. In the case of Japan, from this month, our government raised consumption rate, consumption tax rate, in order to face the next very difficult situation. So in the very near future, monetary policy will not work in developed countries. So another measure should be considered if we have to face the very difficult situation in the management of the demand. That's my understanding. Thank you, Okie. I think there is quite some consensus here, at least amongst the two of you that fiscal policy has more to do, certainly in Europe. I'll talk about Japanification. It's of course an issue that in Africa is very far away. And I'd like to give the word to Akiwe Okuwe. Ethiopia has been growing very fast. Many areas in Africa have had very high growth rates, not just over the last years, but this has taken, this has been going on for a while now. Could you help us understand what the current situation is of this region, of your country in particular, and what the outlook is? What are the big challenges you are facing? Thank you, moderator. First, many thanks for your congratulations on the Nobel Peace Prize winner, our Prime Minister, which I believe is a prize for Africa, not just for Ethiopia. And Ethiopia has been navigating an economic growth quite fast and rapid, but more or less also equitable growth. So for the last 15 years, the economy has been growing by 10.5%. And in terms of shared growth, as an important indicator, average life expectancy has increased from 44 in 1991 to 66 in 2016. This is 21 years increase in average life expectancy, which is on average twice the Africa's average growth rate. This morning I would like to talk the broader picture, and my perspective will be from a policymaker's perspective, but from a developing country or a developing country, especially African perspective. This topic is critical, and we could see two central issues here. The first one is the world's political and economic outlook, and the growth of African countries or developing countries is going to be determined and influenced not only by the domestic policies, but also the broader global outlook. So this is central for developing countries. The second aspect is the rise of China, and this is quite critical, because we are in a seno-centric global order. It's not a hypothetical issue, and China, for good or for bad, is an important and critical player. So I will try to focus on this bigger picture. Some 200 years ago, the great Napoleon said, China is a sleeping giant. Later sleep, for when wakes, she will shake the world. This was exactly 200 years back, and China used to be the largest economy between 1500 and 1820, and since then, since the opium world, China has declined its power and influence while it was the largest economy during this period, and now we see the return of China in the global economic outlook. So it's quite critical, without exaggeration or without an alarmist approach, we need to be realistic in the world that we are in. The first point I would like to focus is that since 2007, as Oliver indicated earlier, the global economy is in a slow down mode. It hasn't yet been able to be back. The growth rate, which was observed, educated back before the financial crisis, and this is quite worrying for developing countries because it limits what they can sell in global markets. It limits the growth space they can have. And the most critical issue is uncertainty, and this is quite valid or important in terms of investment. This year, 2007, for the last 10 years, FDI outflow, I mean, end-in-flow has been more or less flat, about 1% increase every year, and this compared with double-digit growth of FDI is quite an alarming issue because African countries, developing countries, need FDI for their growth. I would like to highlight also that the increasing inequality is a critical issue. The marginalization of developing countries and also the increase in inequality, even with an advanced economy, is a time-bomb that shakes the stability of the economy as well as the political stability. I would also like to raise a critical point, climate change. Climate change is a global issue that directly influences economic growth, and both developing countries and advanced economies need to bring this issue and give it centrality. In the last 30 years, between 1990 and 2020, the carbon emission has increased by 50%. And by the end of the century, the global warming will reach about 3 degrees Celsius. So this is a concern. I think advanced economies as well as developing countries should be looking. On the second team, the rise of China, what I would like to highlight is the rise of China is a reality. It's not a theoretical or a debatable issue. China is a propeller of the global economy. 30% of the growth rate globally every single year in the last few years is generated by China. So it has a significant influence in the global economic growth. We have also seen China's contribution in global GDP is increasing. By year 2000, China's GDP was only about $1 trillion. And in 2020, China's GDP is reaching $15 trillion, which is 16% of global GDP. And 27% of global manufacturing is concentrated in China. This gives a great impetus in terms of influence in trade, in investment, and also in global order as well. And we have seen significant improvement in the livelihood of the Chinese people, especially the contribution in terms of poverty elevation. And this is linked also with improving the well-being of global population. On the green economy, I would like to highlight this point. The Chinese are making critical advancement in this area. It's maybe debatable to say that China is focusing on building a sustainable environment, not from the belief that climate change is a major risk, but definitely what is critical is they are working that the current strategy of consumption of significant material and the damage to the environment cannot be sustained. So they are looking at their competitiveness and China is becoming a renewable superpower. China has now generates 700 gigawatt of renewable energy, which is equivalent to the combined generation of renewable energy in the US, Germany, India, and Brazil. And this is quite important in terms of building circular economy. So the Chinese effect, the China effect as a global public good is an important area. We need to consider. The last point I would like to focus is what is the implication of these two critical issues, the global economic outlook and the rise of China. And here my perspective on this issue is we are aware about the increased protectionism and the trade war as Oliver indicated earlier. However, what we need to say is there are two approaches we may need to consider or two avenues. One is who gets a bigger share from the existing cake is one issue and this is linked with the friction between China and the US or among the advanced economies. However, there is a second way of looking at this issue. How can we make the pie bigger so that the economy grows faster so that prosperity could be ensured and we can prevent the looming crisis and recession. And it's absolutely critical that thinkers and policymakers consider that the common win-win position is going to be critical in our approach. In Africa, China is involved, is a critical player. It's one of the top four investors in Africa along the US, UK and France. It's the largest trading partner of Africa and we could see the trade volume increasing from 10 billion in year 2000 to 220 billion in 2014. And it's also a major financier in infrastructure. These are quite critical and we as Africans, we don't see this as a scramble for Africa. We are engaged with our traditional partners with Europe, with the US, but Africa should also engage with China and try to exploit what could positively be generated. So in broad, again, we need to have a realistic optimism. And I don't think there is a need for being alarmist, but we also need to focus on big powers and developing countries, I believe, should work on how to make the pie bigger and to see a win-win so that humanity can be saved and prosperity could be sustained. Thank you. Thank you very much, Olivier. I was struck by remark that Arcade be made about LDI. And I think that it links nicely to the points I made and may be useful, but on the one hand, if you're a firm, you're reluctant to do LDI in another country because of the tariff uncertainty and so on, so you're going to kind of pull back. At the same time, the fact that the interest rates are so damn low, you know, bombs of major governments in advanced economies means that it is very attractive from a financial point of view to actually invest in countries which have their act together, like Ethiopia. And I suspect that if we look at LDI, it's probably the tension between the two which determines whether there is LDI in a country or not. But clearly, there are possibilities. Low rates are good for Africa, potentially. Actually, this is an important point. Ethiopia had focused on attracting LDI the last six, seven years in particular. And the prime focus has been on productive investment, especially in manufacturing. Between year 2012 and 2017, LDI inflow increased by four-fold. And its share in Africa's LDI inflow increased from 1% to 10% of Africa's LDI inflow. And in East Africa, it increased from 10% close to 50% of LDI inflow. And it's true, as you indicated, that this is an area we need to talk. Let me take this discussion to Salahideen Misoire, because I agree with what Olivier said in the low-interest rate environment countries like Morocco that want to attract capital that need to accumulate capital should find it easier than an environment of high-interest rates, of course. And there's a second point that connects to Minister Alkebi's presentation, namely related to climate warming. We're in Europe, at least, looking for clean energy. And I see a lot of discussions in the German government, for example, that looks in particular to Morocco and sees Morocco as a source of solar energy that could then be exported to the continent, either electricity or synthetic fuels, power to liquid, and all these things. So the combination of low-interest rates and this enormous hunger of a decarbonizing Europe for clean energy. Isn't that an enormous business opportunity? You're a businessman, Mr. Misoire? Well, yes, an opportunity is certain. Before being in a business, I'm also a politician who is passed by the public, etc. Allow me to make a small retrospective because we're in Marrakech. And in Marrakech, three years ago, it was held the 22nd session of the COP. During this phase, the world was more focused on the historical body of Paris and all the dynamics and optimism that it had trained were more focused on the issues of security, terrorism. But during the COP, the American elections took place. But Trump arrived, and the first announcement was to say, I'm withdrawing from the Paris Agreement. An enunciator of a de-sodalization of a consensus in which the world advanced with a lot of hope. And in three years, it is impressive what the effect of the leader who directs the first power to the world can have on the world order, as it is today, or the balance, or the balance of the world as we are observing it today. Since we are talking about China, I would say, I am personally happy that there is a force that counterbalances all of this and which helps to put a little bit of order. We are in a war of positions because it is two powers that are testing themselves today, who are testing themselves today, and who are going to have to agree tomorrow. The return to the world balance will be necessary by the capacity of these two giants who will, and the United States must get used to this, and that the Western world accepts the fact today that there is another power that represents another world with which it will necessarily have to compose and, as I said, compose these new rules that will guide the world from tomorrow. Everyone is talking about the shift between the world as we had conceived it after the Second World War and as it is working today. We are trying to advance the G20 as a solution, but I like what Jacques Attali says, he calls it the G20, VIN. And this shows that we are in a period where there are many questions that arise and then we come to the point of interest, how to re-release the economy, the prospects of recession, the risks of recession, all this, and the effect of this big bang that is happening in the world and in which we have to integrate all the risks and all the consequences. Just to say to our Western friends what is the perception of China by the Africans. For the Africans, China is two things. The first is that it allowed the African leaders to regain a part of their sovereignty in the political decisions of investment and development. The second thing for the populations and for the leaders is the synonym of impact, of quick and immediate results, even if today, in the debates, we come back to the fact that China comes with its big bots, they come to make investments with Chinese workers and that the African workers don't take advantage of it. This is another debate and another topic on which, naturally, we will have to come back. Who would have said that the greatest economic power in Europe would have known the situation that it is now experiencing due to the recession? Who would have said that Europe was going to live the implosion that it is living and didn't pay attention to the risks that it had in the functioning of the countries belonging to the African Union who would have said that Brexit would come and produce all these inequalities that the European Union and Europe are living? For us, despite the Africans, Europe is our first partner, Africa is close naturally to Europe, in any case, to Sub-Saharan Africa. With all the difficulties and the impacts we observe a partner who is missing today totally of coherence and who is missing visions of these strategic partnerships, of what he wants to do and what he wants to build. So let's say things so that we can really move forward in their solutions. I really appreciate the way in which you put the debate this morning at the opening and you are right to ask yourself the question about what will become of Europe. What is the responsibility of Europe today, the European Union, in front of this big bank that is doing itself? My feeling is that Europe is in this position today as a medium power who accepts to see two giants fighting and who will naturally follow the movement in the context that interests him. This has an impact on us. This has an impact on us who are close because we are Mediterranean and we are on my side. Look at what is happening today in Maghreb. Who would have thought that this big black box with the trauma of racism that it has experienced, which is Algeria, could know such a deep and pacific movement than the one that it is experiencing today? Who would have thought that eight years after the revolution in Tunisia and on the occasion of these elections today that there are two anti-system candidates already after eight years? Two candidates, two anti-system forces that will be found for the second round that will be held on Sunday. Who would have thought that this result that was obtained during the election in Tunisia could help in this way? There is a constant, there are forces that are well present and well implemented and this is available for Tunisia. It will be available tomorrow for Algeria because the only force that is organized but that is not yet expressed and the forces where the movements are moving islamically but that is in the progressive rationality compared to the constraints that must be assumed in the management of the opening and also the management of the response to the social demand. This is also available in China. The organized forces in the Maghreb are the forces that will continue to direct and orient the politicians inside this space. I am not talking about Libya everyone knows the situation but I am happy for one thing because I was an actor in the Srebat Accord I was Minister of Foreign Affairs and therefore Morocco had achieved this approach that was very difficult and painful. I saw people crying people from the same family who found each other in a year and who cried because and thanks to these findings and we had a lot of hope but the forces continued to function to ensure that Libya does not find stability because everyone sees the stability in its own way. But I am happy today that the military trend is not the trend that does not take place in the solution or the resolution of the problem of Libya. I am also happy with the developments in Mauritania. All this to say that the Maghreb is living structural mutations with hope. What I observe in Algeria is hope. Unlike what many think Algeria will not come back and therefore the military power will have to accept to share the power. The solution to the problem of Algeria today is to bring the Algerian power to accept the solution to share the power. But it will have to compose with it with which it led an internal war for ten years because it is one of the rare forces organized that remains still in Algeria. All the historical political formations are rejected structurally, radically by the people who are in the street hence the difficulty of the political solution that must be found. This leads me to say that the debate that we have today on the matter of interest, the Maghreb, etc. maybe in a year or two we will talk about other things but it is part of the phenomena but it is good to analyze. It is part of the phenomena with Dominique who is there that I greet with which you have strongly collaborated. I remember from 2009 with the financial crisis and I was at the time Minister of Finance meeting in Tanzania if you remember well to talk about how to help Africa not to pay the fees and I want to greet you and your courage for the facilities and support that you have brought to the continent because we all agreed on a fact we can reduce the expenses of the operation but we cannot reduce the expenses of the investment because that is what will help Africa tomorrow. And so all this to say that I am very optimistic for the Maghreb that the question of integration in Maghreb is something that I begin to see again. It is the only space of resistance to integration but this resistance is gradually cracking. And the Maghreb today has a fundamental responsibility. You have to help the European and the Western world. You have to help in this process because a reconstituted Maghreb is a force that will prevent and help the resolution of the problems in the Sahel because they come they come with and we have to not be delusional the strength of the demographic growth and African problems falling back on Europe. So you have the choice to go to much more aggressive volunteers with us and we know how to do it. Trust Africa and it is capable and we will come back to Africa later but just to say I am very optimistic on the construction of Maghreb I am starting to see the solutions in Morocco. We will work for that and we will fight for that. Now on your question to finish Welcome to all investments Morocco is tools for the development of investment in renewable energies. Thank you very much. Thank you very much. I think what you did was fantastic here because what you showed us is that the disparity of the Maghreb region is first and foremost an issue of political stability and putting that to the forefront is crucial and I think this gives us a good link to talk about Russia. We have the Deputy Minister of Finance with us here and Sergei the question is while we are talking about Africa and talking about the interior question of security and stability when we look at Russia today we are aware Russia is part of Europe geographically but it is not part of the political Europe and that has given rise to economic tensions as well. So continue on this motive politics and economics where do you see Russia standing today here what does it mean for the growth perspectives of Russia and for the Eurasian Economic Union that has now emerged over the last couple of years. Sergei please. Thank you for interrupting me. First of all I would like to say that I share the opinion which was said at the beginning of our session that in principle the global economy is in a good shape but it is only in principle that the challenges are accumulating and this is maybe the effect which still need to be clearly processed and analyzed. The biggest challenges from my point of view as deputy minister of finance is that during last probably six years where stating in our final declarations on different level of G20 the ministers or leaders that the debt is growing and it is being said year after year each half of the year and still no sign that we will have quite contrary position and of course interest rates environment are stimulating and very much boring but at the same time we see another big challenge in this phase as far as almost 17 trillions of bonds are being sold below principle with negative interest rates we see big challenges which are facing insurance companies and pension funds so I wonder what is going to happen in a number of years when these two institutions very important ones need to service their liabilities before pension or those who made signed contracts to ensure their activities. In Russia even in this environment we enjoy the privilege to use both fiscal policy and monetary policy as we still have the space to use this we have low debt we still far beyond the general level of interest rates so the central bank can use the monetary policy to slowly go to lower reference rates and to keep the markets ready for the nearest future but what was most important in my country during the last four years that we prefer to rely as the benchmarks for our internal policy not the speed of growth or rate of economic growth but rely mostly on sustainability of growth and inclusiveness this is the basis which often been referred to within G20 documents but for me it was difficult to say whether any other G20 economy is really relying on these benchmarks for the internal policy in our situation this happened we now passed through the period of low growth rate but instead we have strong fiscal position and strong monetary positions we have finally managed to shape banking system and to get rid of poor institutions and banking sector which allows for credit expansions within the private sector this is more important but still the most important tool for internal policy is fiscal policy or fiscal stimulation we have now start implementing 12 so called national projects which is covering the whole spectrum of internal life medicine, education infrastructure export promotion I think like this big money are going to be invested from the budget resources and from borrow sources but on the basis of these national projects we are expecting that in 4 years time the average growth of Russia would be beyond the average growth of the global economy so it means that we are still looking at the global economy growth as benchmark but not the real policy aims so it's very important in terms of decision making process just a couple of words about China there's lots of factors that China has become new superpower from Russia point of view we enjoy the fact frankly speaking we're lying on the fact and it helps a lot in terms of overcoming some difficulties in terms of different economic and financial restrictions now we can rely on deep internal bond market in China for example Russia's company already there the government is still thinking about possibility to use inland Chinese bond market as source of funding but what is more important we enjoy the privilege to have strong demand for Russia's exports in China's economy so I remember when trade to know between Russia and China was around 10 billion now it's 100 billion it's happened in less than 10 years and our aim and our Chinese colleagues aim is that we will have 200 billion of trade turnover in 2024 so it means that China will definitely become the second trade partner after European Union for Russia and just to conclude maybe with what you've just said at the beginning whether we really face the challenges of losing multilateral approach in the global governance I think last year was very critical one I remember how it was difficult to negotiate Germany's final declarations in Buenos Aires when we have one superpower blocking all kind reference to multilateral cooperation and things like this nowadays especially due to the effective management of the situation by Japanese colleagues as the leaders of presidents of G20 situation slightly changed maybe we can be even more optimistic in terms of the fact that multilateralism is not being lost it's still with us and this is very important because when you have the global economy depends on global value of the chains and this strong tendency that almost not one single good is being produced in one single country it's very important to keep these multilateral collaborations in order and multilateral rules in trade in particular in order as well so with this I conclude maybe later on we'll come back to the Eurasian Union as you just mentioned Thank you very much Sergei let's now move to Korea we've centered on the transatlantic economy, Africa, Russia now Korea the colleagues before have stated that the rise of China for them constitutes a gift in some sense I think Mr. even said this has given back Morocco economic sovereignty now from a Korean perspective you are so close to this Chinese economy what is your take on it is this are you regaining economic sovereignty are you benefiting from this as the others have said there are a few political tensions that come with the rise of China Korea sitting in between the United States and this big red dragon is more of a threat than an opportunity I'd like to hear opinion of this Thank you very much let me begin by providing you a very brief and a quick overview of Korea's macroeconomic pictures especially in the global the context certainly Korea is no exception to the synchronized global economic slowdown with Korea's export slowing and decreasing investment the business investment Korea's economy is substantially growing at a less than robust rate which is only around 2% as Oliver Blanchard alluded both exports and investments are directly and indirectly affected by the global economic slowdown and the uncertainty and unpredictability caused by US-China trade conflicts even Bank of Korea now forecast this year grows at only around 2.2% I'm very sure the IMF's October outlook will lower its earlier Korea's growth projection as you must know very well Korea is very highly global trade dependent country Korea's trade both exports and imports together to GDP rate is over 80% one of the highest in the world I suppose only with Germany not many countries the trade dependency decide and also nearly 40% of Korea's exports primarily consisting of intermediate goods to economies 26.8% to China and 12% to the US therefore Korea is very much concerned about global economic slowdown and the US-China trade conflict as you know very well Korea benefited so much from the existing post-war the liberal economy order but now we are very much concerned about the demise of that very liberal multilateralism based world order especially since ironically the US is leading the breakup of the order with Mr. Trump's unilateral American first slogan G2 that is US-China make up 40% of global economy certainly the trade dispute between these two countries are most critical factor for the global economic performance and the breakup of the existing liberal order the problem is I'm sure many of you agree with me in saying that the disputes between these two countries will prolong and what that means is the prolong the uncertainty and unpredictability for the global world we all I'm sure you saw the news this morning or last night in Washington DC yesterday China and the US had an an agreement on their negotiation on the disputes but as expected it was a small deal it's a not big deal and I for one did not expect any kind of big deal as possible as Mr. Trump would like to have the reasons I have why these tensions of conflicts between these two countries will prolong I have three reasons to give you first dispute the current trade dispute goes well beyond two nations trade relationship it involves two great powers what you might call hegemonic competition which is just intensifying second China will not easily give up its ultimate goal of achieving what is described as China dream by 2050 and therefore they're not easily give up on their program made in China 2025 so China being very strategic and the pragmatic nation and people many small this concessions here and there but I think the conflict will be continued because US primacy in both hard and software powers will continue at least few decades to come and therefore US will also will try to exert its power and project its power that means that the tension will be continued so for the for these reasons I would say there will be prolonged global uncertainty and unpredictability and therefore there will be short supply of public goods short supply of global public goods that is free trade environment and stable finance and currency regime so maybe I will stop here because there will be a second round thank you very much looking at the watch we are already running short of time and we have many issues on the table here fortunately this conference takes three days so much of the balls that brought in the game can be played later I would like to come if I may just one second highlight is it's clear that China is a key player and by 2030 China will have the biggest economy and China will be a high income and an issue that is debatable now is whether a bipolar world global order is going to emerge or a multipolar and I want to bring the dimension of Europe if Europe could be economically stronger the global order would be a multipolar which is quite conducive for stability we know that between World War I and World War II in the period of 25 years we have had two world wars now it's 75 years since we have had a war in this nuclear age and here Europe came with the right solution of building European Union and becoming an important global economic power and also the U.S. involvement during the Marshall Plan and World War II recovery contributed to this so one key aspect that will shape the future is whether a new bipolar world or multipolar global order is going to emerge so thank you so much for reminding us Europeans of our important role I think many of us here agree but maybe Naoki Tanaka has a little bit of salt for us to offer here because you wrote a book about the great stagnation of China now we are talking about the bipolar maybe the tripolar world but what about the Chinese long term perspective so what is it that gave this title to your book the great stagnation of China Mr. Okubei's opinion on Chinese economy is very interesting but I disagree with him so at first I want to pick up the potential gross rate of China when we measure the potential gross rate labor input capital input and innovation side three factors exist as to labor population in China it's decreasing it's now decreasing and as to capital input I'm not so optimistic FDI, foreign direct investment from overseas to China increased very much but almost 60% of FDI to China came from global Chinese diasporas so a few years ago very important rank of communist party said 60% came from overseas Chinese however as you know in Hong Kong and Taiwan there are a lot of people who are against communist regime so in the case of Hong Kong province of Canton will play very important role so a lot of money from overseas to China through Hong Kong so it will be stopped such kind of possibility exist and as to Taiwanese people the same mentality is now penetrating so from southern parts of China there will be some kind of structuring problems a lot of employment maybe before us so as to capital input we are not so optimistic about that as to innovation side the coupling of the economy is now being observed by Trump administration's challenges for China so according to our forecasting potential growth rate in China is around 2% so in the very near future China will not pass that of the United States this will have the influence upon development course of African countries two aspects one is export of deflation in China there are a lot of capabilities as to heavy chemical industries steel, cement, aluminum petrochemical industry etc world capability belong to China but demand side in China is now have the problem so a lot of these industries were done by state-owned enterprises in China SOE is very difficult to distract themselves because communist regime intervened the state-owned enterprises so restructuring process is very difficult as to the excess capacity of the industries in China that means the deflationary expectation on the global context so they want to introduce the method for industrialization but as to the price of their products it not increase in the main time that's a problem second problem exist as to dead-rhythm type of countries may occur as to the involvement of China as to Belt Road initiatives President Xi Jinping mentioned public-private partnership so two years ago he mentioned in the annual meeting of Belt Road initiatives so Belt Road initiatives or involvement from China is not that of the Marshall Plan Marshall Plan was done by the United States in order to rehabilitate the capabilities in Europe by US money but in the case of Chinese involvement public-private partnership through PPP that means involvement from neighboring countries will be necessary so I am picking up one example China-Pakistan economic corridor that is the building tramways from Indian Ocean to China through Pamir Heights what kind of techniques what kind of infrastructure building will be done in Pamir Heights this kind of discussion was done even in mainland China a lot of economists said China-Pakistan as to China-Pakistan economic corridor it is very difficult to build and the debt problem may be left for Pakistan side so such kind of discussion is being done even in the high so within the capital so according to my understanding so it is very difficult to describe the future course of Chinese economy and its influence upon the world order so thank you very much for this more skeptical view raises two questions what does this mean for global aggregate demand if China is slowing down in that sense and also raises a question for Japan does this not mean that if China is not moving that fast there is more space for Japan as a regional as a regional power in the Pacific economies here in the white place please tell us whom you are addressing your question to first I'll tell you my name my name is Mona Makra Mabeid I'm an Egyptian senator and member of parliament I'm addressing myself as you can imagine to minister Al-Kabe first of all I want to congratulate you for the Nobel prize that was awarded to your president my second point is that I'm very impressed by the advances that Ethiopia has made lately whether it is in life expectancy and growth etc there is one thing that I want to remind Ethiopia of is that the Renaissance dam is a great problem for both Egypt and Ethiopia there must be more flexibility but the president has taken the Nobel prize because he brought peace between Ethiopia and Eritrea I hope that the world policy forum will inspire him to find some solution and it must be a political solution because instability in Egypt means instability in the whole region you know that better than I do thank you very much that the first congratulations came from President Sisi and from the Pope because the Pope, the Coptic Orthodox Church plays a very important role in Ethiopia and in Egypt my second little point not much is to congratulate minister Mesoage for everything he said I would like to address you in French as you did to tell you how the construction I am very optimistic for the Marlèb but especially for the construction of Marlèbine which has been proved by what is happening in Algeria and we will see it again in Tunisia so I congratulate you to have outlined the structural mutations that are truly bearers of hope thank you if I may reflect on this important point that the suggestion mentioned by my sister from Egypt I have been emphasizing about a win-win solution this is a central concept our government is focused the grand renaissance done as you know focuses on generation of hydropower it doesn't affect the use of water for other purposes it only regulates that the European government sees that Egyptian people should not be affected by such a project and our leaders are working on it and I'm optimistic it's going to be resolved our destiny is mutually cannot be excluded please thank you very much my name is Mubarak from Senegal of the Economic Prospective Bureau I want to disagree with the disagreement of Mr. Tanaka regarding China if you take the World Bank figure in 2017 the GDP per hit of China was 8,823 by growing 2.5% in 2003 2030 it will be more than 13,000 and the World Bank defined high income country as 12,056 so I think Okubei is right China will become a high income country in 2030 secondly on innovation also thank you at this point let me bring Olivier Plancha in because I have since some disagreement as well and then last word listening to the whole conversation it's clearly essential to know to go at 6% or 2% because it determines whether it's going to be a G2 or G1.5 and for Africa it makes a difference I'm more optimistic than Mr. Tanaka over he has spent much more time thinking about China my sense is indeed on population growth there is no ambiguity on capital it's mostly domestic capital so even if Hong Kong were to close there's still a lot and on innovation my sense is actually there's no firm technological sophistication which is such that they can have productivity growth from there so I think the 2% number is much too pessimistic but it's clearly an essential number in terms of interactions with Africa the interactions with the US and how we see the world if you please briefly respond rise of China in the future however when we see the future course of Chinese economy we are very we should be very careful I am now picking up three animals and three colors one is a grey rhinoceros it's accumulated death management of accumulated death when we see the rhinoceros in the zoo they are very stable but when they get angry it's very difficult to handle so that problem accumulated death problem is very important for China for variance policies are now being done for variance policy means that's not the orientation of high growth that's one problem second is the white elephant in the case of investment by government sector very inefficient equipment very inefficient parts are being now produced that will have a bad effect upon the productivity increase in China third is a black swan in China there is some kind of possibility of systemic this so in the case of property management in the rural levels a lot of foreign money came to China so refinance problem is now being visited so in the case of refinance of their bond in data terms in some cases their coupon rate is 12% or 40% or 50% so in that case some kind of bankruptcies in development of properties may occur that may become the allies of black swan that's my understanding thank you very much Naoki yes I know there is much more to be said important points that have been floated here I think that Jere de Montréal has put me in charge here he thinks that I'm a chairman he's actually wrong I'm from Austria but then the last my task here is to watch over time we're four minutes late so for this reason thank you very much for this panel for an excellent discussion I hope you'll all be around for the next days so you can continue this thank you very much