歡迎大家光臨財新辯論一是財政 二是中國財政總監請用Hashkey在你的題目我會幫你提出問題在我的手機上為何我們說要補充中國的財政一旦中國的財政系統已經很大超過9億美元我們需要改變我們不能依靠傳統的財政系統而我們很嚴重的挑戰可能蝙蝠們認為財政系統有財政系統的財政系統但其實網絡財政系統是最重要的所以我首先要提出問題為何中國的財政系統可以再次補充財政系統為何中國的財政系統可以再次補充財政系統超過10年 中國的財政系統做了很棒的進步因為中國政府提供了很重要的財政系統我們有一個很長的方式我們譬如說我們結束了美國財政系統的財政系統我們不會轉換美國的財政系統而我們能夠依靠財政系統的財政系統在市場上除了一和二的財政系統這些是財政系統的財政系統我們還能增加我們的努力去通過財政系統的財政系統財政系統的財政系統並且在財政系統的財政系統上採取了更多的財政系統而且也有十億美元的資金而且資金是三億美元的資金所以我們有足夠的資金去保護貿易而且也有十億美元的資金而且也有十億美元的資金所以我們也有足夠的資金而且也有十億美元的資金所以我們有足夠的資金而且也有十億美元的資金是我們在最好的場地為國際合作例如我們加入FSP我們有活動在這些領域我們也有合作在 IMF 和世界銀行這些是我們所謂的領域但對於挑戰我認為這些領域是我們認為的我們要先解釋我們要先解釋政府應該要解釋業務現在的資金領域應該要解釋銀行的領域政府和銀行領域應該要允許他們的財富和財富他們應該要允許他們的財富和財富他們應該要允許他們的財富和財富他們應該要允許他們的財富和財富如果政府在允許政府的財富和財富繼續允許他們的財富他們會允許他們的財富和財富他們會負責責任我們新的預算法我們會有更好的我們會有更好的或更好的保護財我們會繼續去解釋財富我們會繼續去解釋財富沒有強大的財富特別是財富我們不能幫助或增加經濟新的時間我們有些VC和PE這些兩件事很相似但是我們需要找到一些去導致MA去提供加強財富的能量在這方面我們會以短期的期待去解釋財富的能量在這方面我們會以短期的期待我們會以短期的期待我們會以短期的期待我們會以短期的期待我們會將供應願總so that MA can become easierbillet, international or domestic companieswe can allow some loss for these companieswe need to. allulosome MP else for these companiesfor transformation if we can have a better grasp of the above motion 4 aspectsChinese banking system has great hope, but of course we still need to try to build the corporate governance and the enterprise culture development. We have a lot of talents. If we have better institutions, we will have better vitality and retain these talents.We will not serve our own interests.We can also serve our customers' interests and also for regulation.We need to reform the regulation system before we have to separate regulation, but now there are a lot of things mixed up.So the consistency in interpretation of the regulation and also the predictability of the outcome of irregularities should be paid attention to. Otherwise, we cannot create an enabling environment for the business community. It's not so difficult to reboot Chinese finance.Chinese, for example, the insurance industry is faced with greater opportunities because of the aging population and fewer young children, and to caring for the young and the old has already created a sunrise industry, and we need to transform the mechanisms and institutions.And every festival, a lot of people swarm to Hong Kong to buy insurance, so if our domestic market can do a better job, then China's finance will enjoy a brighter future.Thank you, Mr. Liu.You have given a very insightful view.I will give floor to Loc Turner now.Thank you very much, and it's a great pleasure to be talking here this afternoon.It's a very particular pleasure to be on the same platform as Liu Min Kang, MK, and I worked very closely together on the FSB, which you mentioned in the issues to do with the redesign of the global financial system after the financial crisis.And from that, I was very aware from talking to MK and others about the Chairman Liu and others, the very, very significant progress that has been made, which Chairman Liu just talked about.But I, like him, would like to focus on the challenges, and I want to suggest three challenges for the financial system, which relate to what needs to happen in the Chinese real economy.And then a word on how difficult those are, and a final word about how not to be diverted by unimportant objectives.The three challenges are first, the supply of credit to SMEs.If you look at what the typical SME in China is paying to the formal banking system for credit, it would appear to be on average something like 20% versus major corporates or SOEs able to borrow at 6% or 7%.This difference of 13%, we always see this difference across the world, but this is a higher difference than in most other countries.And there are also many SMEs, I think we well know, which find it difficult to find credit in pure quantity terms and are relying on either intercompany credit or high priced informal networks of credit.And that reflects some well-known skews within biases, skews within the banking system of the state-owned banks having a natural tendency to lend money to the state-owned enterprises.They're familiar with them, they feel close to them.And the key point is that if China is really going to move to a decisive role for the market and the development of a service sector and the development of more of a private sector,a better supply of credit, which is less skewed towards the largest companies and the SOEs, I think is important.The second challenge, which again starts from a real economy challenge, is the rebalancing of the economy away from a very high investment focus.Current investment pays 50% of GDP, which is outside all the historic models of other development processes towards more consumption.And that within that, the liberalization of deposit interest rates could play a useful role.There are a number of reasons why liberalizing deposit interest, removing the cap on deposit interest may be relevant both to rebalancing and to financial stability.Lower deposit rates represent essentially a subsidy flow from households to business.Essentially it means that some categories of business are getting underpriced credit, which is likely to result in a misallocation of capital to capital investment projects,which aren't the margin or wasted.And I think we all know that alongside the much important and very good capital investment in China,there is also a proportion and probably now a significant proportion which is somewhat wasted.So underpricing of credit is a problem, but it is also true that that subsidy essentially takes income away from consumers and gives it to business.And that gets in the way of the expansion of consumption, which is an important development within the Chinese economy.It also has, I think, a worrisome financial stability development, because it means that if you don't totally control the system,you get things which look like deposits and sound like deposits, but they manage to be not called deposits.They manage to get called wealth management products or they manage to get called money balances at Alipay,both of which are different mechanisms of sending money through the system either direct to lending or in the form of a wholesale finance to the banking industry.Banks no longer having their own deposits but getting the money off Alipay which effectively has deposits.And we know from the experience of the US that you have to watch that very carefully,that if you get the development of money market funds which again actually their origins in the states in the USis precisely the same origins as some of these things in China.It is the fact that up until the early 80s a America had a regulation queue it was called,a deposit interest cap which generated the development of the money market fundswhich we thought were fine until 2008 when we realized that wholesale money into the banking systemcan be very flighty money, it can be subject to runs.So having a deposit interest cap which encourages a set of regulatory arbitragescan itself be a form of risk.The final third thing I would mention as a challenge for the whole Chinese economyand also for the financial system is the creation of real hard budget disciplinesin both the real economy and the financial system.You really can't have a system which has a decisive role for the marketunless there is a possibility of default, a possibility of bankruptcy, a possibility of a failure.That needs rules to make sure that happens in a non disruptive fashionbut a market system has to be disciplined by the possibility of failure.So I think what's happened in the eight months of this yearfor us looking outside at the Chinese financial systemis an interesting backwards and forwards as to whether the authoritiesreally are willing to go towards that.There was a lot of excitement back in January about a wealth management productwhich I think I remember was to a coal company in Shanxiwhich looked as if it would be a major defaultand then at the end of the day it was a tiny defaulta relatively small haircut, a process of looking after the problemsand I think throughout the year there's been discussion as to whetherloans are being moved to the asset management companiesbut still funded by the banks in a way thatavoid the problem of default.But at some level time the Chinese authoritiesboth in the financial system and the real economywill have to allow there to beloans that go badbecause without that again one is potentially drivinga misallocation of capitaland the longer that one doesn'tseize that problemthe longer the danger that more and more creditis simply rolled overand the credit to GDP just gets to a higherand higher levelup already over the last five years from 130%to GDP to 250%.So those are three major challengesbut I think we also needto recognizethat they're very difficult challengesand youcan't solve these challengesby simply sayingyou have a free market and everything will be finebecause we know fromour economiesthat a completely freemarket in credit also has biases within it.You leave the allocation of credit just entirelyto the freemarket without macro prudential tools without a worryabout itand they will go off,the banks will go offand they'll lendlots of moneyagainst real estateand notenough money to SMEs.I meanin the EUand the UKwe are now worried about whether ourfinancial systems lendenough money to SMEsand both the Bank of Englandand the ECBactually have in placespecial lending facilities deliberatelydesigned to try and get throughfunding to SMEsandnot to mortgage markets.So we have not foundthat completelyfree markets magically solveall these problemsand thereare certainly hugedifficulties of transitionbecause onceyou've already got a verylarge stockof debtin theeconomy,250%of GDPimposing hard-budgetdisciplinesyou have to get the pace of thatrightbecause ifyou simply chuck them inimmediatelyand suddenlysaywe're going to have a wholeload of defaultsand ifyoudon't have resolution systems for banksand you don't getthe pace rightyou can shock theeconomyin a waywhichdepresses it significantly.So theseare verydifficultchallengesand I thinkthe crucial thing is torecognizehow bothvery important anddifficultthey areand that is my finalthoughtI would makethat anattackingthose,I would becarefulof one ofthe thingsin thesubtitle ofour sessiontoday.We have thephraserebootingChinese finance.I'mperfectlyhappywiththat.But we have asubtitlewhich sayswhat modelsand reforms willboostChina'sfinancial sector.Iwould becarefulof the ideaofboost becauseitimpliesthat youwant a biggerfinancial sectoras anaiminitself.The crucial thingis tohave afinancial sectorwhich is helping yousolveatreallyeconomy problems.So Iwould preferthe titletosaywe'll helpreformChina'sfinancial sectorratherthan simplyboost it.Thankyou,notTurner.Suggestionnoted.We willdo better nexttime.Thankyou.So ourtwo seniorreignersinour panelhave alreadymade theirpoints.Now it'stermfor ourpractitioners.Nik,first.Sure.Thankyou.Thankyou very much.And I'mgoingto builduponwhatwasmentionedby LordTurnerand alsoby ChairmanLew.And Iread thatyouwerea chaseat some point.Iwas a chase.Okay.So anotherbanker.Good.Great.Yeah.When Iwas 22Iwas a chase.SoI'd like to buildonthe phraseof themarkets playinga decisive roleonthe allocationof resources.And obviouslyit'svery importantinaneconomyas LordTurner saidthatit'sinvestingaround50%of GDPwhich isyou knowjusta gigantic number.And partofitis aculturalresultof savings alsobeingpretty high.So clearlythis is particularlyimportantand a lotofattentionaroundthis has beenpaidlately.And whenwe discussthe issue,what doesit mean?Itmeans thatwe need to be abletohave therightriskand return framework.SoLordTurnersaidthat he wasquiteencouragedat thebeginningof the year whenhe saw thatthere'spossiblysome changearoundsome defaultsand whilesome peoplearoundthe worldlooked atthat as anegativething,manyotherplayersespeciallyinthefinancial industry,we sawit as somethingactuallyquitepositivein the sensethatokay,thismeans thatthe marketwillactuallybe in apositionto pricerisk.Todaypricingriskin Chinaisfairlydifficult.Sopricingriskwillcertainlyplay asignificant roleinallocatingresourcesin themostefficientways.And itit'sbecomingmore and more importantas wego toa service andconsumptiondriveneconomy.So there arein myviewthree thingsthatareimportantto be abletohave afunctioningmarketwhere riskispriced appropriately.First ofall,we need competition.Tohave competitionwe need alevel playingfield.We need tomake surethatwehavenewplayersthatare abletoparticipatein themarketand part ofthe topicis alsoall the topicaroundinternetand the rolethattheycouldplay.And there are thingsinfavor,thingsagainst.How do weregulate themthatarequiteimportant.There's alsocertainrestrictionson foreignplayersin termsofhavinga significantparticipationinlocalfinancialinstitutionsorsecuritiescompaniesthat alsoplace averyimportant rolein.I'lljustgive theexampleof JP Morgan.We havefive joint venturesandwhilewefeelprettycomfortable withthe partners thatwe havein our joint ventures,ifwe weretochoose awayofinvesting andoperatingin any countryaround the world,we wouldn'tchoosetohave five differentpartnersdependingonwhere yougoandto build ourpresenceandtohave ourbestpeople andourbestresourcesdedicatedin that manner.Sotryingtoreallyallow forgreaterparticipationand flexibilityby foreigninvestorsparticipatingin thelocalfinancialsectorwethinkcould beconstructivein termsofbuilding thatcompetitionandimprovedenvironment.The second thing thatwe needis transparency.And whenwe talkabouttransparency,I'm nottalkingabouttheshadow partofshadowbanking,butitdoes touch intocertain aspectsofthat.Becausewhenyoulookatthe discussionsaroundtrustcompanies,itis not clearexactlywheretherisk lies,who isabsorbing therisk.And whileit may be clearfromreadingresolutions,bylaws,who ison paperassuming therisk,it'snot clearifit'sthetrustcompanies,thefinancialinstitutions,ortheinvestorsin the endthatwillbear the cost ofprice orrisk beingallocatedanddistributedin the right way.So we need veryclear rules ofthe gametobe able tohave anevolvingand fruitfulfinancial system.And thethird one is effectiveregulationandsupervision.And Ithinkthere aregreatcomponentsandgreatprogressthathas been doneinthisarea.For the most part,theChinesefinancialsystemis averysolidsystem,wellregulatedsystem,wellsupervisedsystem.And thiswill ensurethatthefirst twopointsthatarementionedaresustainablein thelongterm,transparencyandcompetitiveness.It'llalsoprotectagainstsystemic risks,which issomethingveryimportant.And wehaveseenthefactsofothermarketswherewhencertainplayersanditdoesn'tneed to befinancialinstitutions.Itcouldcomefromothersectors.Itcouldcomefrominsurancesectors.Itcouldcomefromotherplayers,financialplayers,internetcompanies,etc.So it'simportanttohave aholisticviewofthefinancialsystemandwhatthepotentialimpactisintermsoftheoverallperformanceofacountry.So thosearesomeoftheareasthatIthinkareimportantintermsofcreating averysolidandsustainablefinancialsector.SomeotherareaswhereIthinktherecouldbeimportantimprovementsanddevelopmentsarecreatinga safetynetfor thesystemandthecouldverysomeshort-terminitiativesisthecreationofdepositinsurance.OtherasthataremoreimportantforthelongtermareforexampledevelopmentsaroundencouragementofinsurancecompaniesasChairmanLew mentionedpensionsystem.Thosecouldpotentiallyfixsomeofthe issuesaroundavailabilityoflongtermcapital.Becauseinsurancecompaniesandpensionfundstheywouldliketohavelongterminvestments.So thatmayhelpalsointhedevelopmentofprojectfinancingandotherareasthatareverynecessaryforthedevelopmentofinfrastructure.TheotheronedevelopmentofthecapitalmarketsandthisoneisalsoimportantintermsofdevelopinglongtermfinancingalternativesustainableaccesstocompaniesthatareinvestingininChina.So thatisonethatIthinkthere's quitea bitofprogress.TheShanghaiHong Kong StockConnectIthinkit'sa greatinitiativethatwillhavesignificantimpactandit'sinthe rightdirection.AndthelastoneisweneedtocontinuefosteringinnovationandasIsaidbeforetheadditionalcompetitioninthemarketwhetherit'sby foreigninvestorsbynewcomersaslongasit'sa levelplainfieldisdefinitelygoingtoplayasubstantialroleinthat.Thankyou.Thankyou,Nic.Yi-San Lee.刚才justnowthepreviousspeakerhavecovered a lot ofaspectsfromthemacrolevelsItotally agree.Iwanttobemorespecificrelatingtomydailywork.FirstinthefinancialsystemthebusinessImeanVCMPE.What roleshould they play?YesterdayPremierLi Kechenginhiskinospeechatopeningplenaryhe saidthatweshouldencouragestartups.Ithinkthis is a very goodcall.Chinesepeopleareveryinnovative.In this way,we candisplayourinnovativecapabilityandthat'sthe fundamentaltoboostinationaleconomybuttostart a businesswheredoesthemoneycomefrom?WestillneedverydevelopedVCMPEsectortosupport.Thecapitalmanagedbythisbusinessforexampleintheunitedstatesisalmostthe 5%ofitsGDP,butinChinait'salmostthe1%oftheGDP.SothissectorinChinastillhasgreatpotentialtogrow.AlsoinVCMPEsectorweprovidefundintermsofequity.Thepreviousspeakersmentionedthatfromaleveragedpointofview,theleveragedracialofChineseeconomyisveryhigh.Lorturnermentionthatisalmostthe 250%ofitsGDP.Soactuallywhatweneedistodeleverageforstartups,whatthey needisequityinvestment.Youcannotexpectbankstogivedirectcredittothestartups.Sothat'smyfirstpoint.Secondhasomethingtodowiththeshadowbankingsystem.Ifyouwanttotrackthemoneyflowofshadowbankingsystem,it'susuallytothelocalgovernmentandalsopropertycompanies.Forrealistaycompaniesalotofmoneystillgoestothelocalgovernmenttoaddressthisissue.Wesee a lot of debt of thelocalgovernment.Ifwecombinetheguarantee part,it'salmost18trillionRMB.It sounds a large number.But when I joined thewinterdoubles,Ibraked it down.It'susually two-yeartermforthe18trillion.Ifwe can refinance every two years,it will have great pressureonthebankingsystem.But for the same amount of debt,ifyoubuild a full-fledged,highly-efficientdebtmarket,especially municipal-bound market,every year,the part ofrefinance will go down substantially,and it will ease pressureforthebankingsystem.So that's what IwanttoaddtoMr.Lio's point.We have worked for many years to build diversified layers of acapital market,butdebtmarket so far hasn't been developed very well,and also forinternetcompanies.Mr.Lio saidthe regulators has very high tolerance towardinternetcompanies.The same thing that has been done by Ali,by Tencent,by Baidu.The U.S.regulators won't be so tolerantasthe Chinese regulators.So I think the Chinese government has made great efforts here.They want to encourage Chinese financial innovation.They wanted to go one step further.Because of the legacy problem,the Chinese financial system lagged behind.So internet sector is our opportunity.Maybe we can go even beyond the United States.It's like the same issue on e-commerce.Since the modern commerce in United States is already very developed.So e-commerce can only be a desert.It cannot be a main course.However,in China maybe e-commerce players can be the main dish.And then come backto PEVC sector.It's also an important part of the comprehensive and full-fledged multilayer financial system.The banks holds the majority of the assets.It accounts for 70 or 80% of the total financial system assets.Before we built a full-fledged and multilayer financial system,what we lack is the long-term fund.For example,how do we really establish the enterprise annuity system so that this part of the fund can enter the investment sector?PVC sector in the United States at the beginning was only the tool for some rich families.It's not a real sector or a real industry.But after the 1970s,because the eraser law was passed by the United States,the pension fund can be allowed to invest in PE and VC.So PE and VC sector really developed.It also helped the stock market and helped the financial management business as well as the insurance.The Chinese market has provided stable funding to these industries.Maybe with the long-term funding stability,our Chinese stock market won't be so short-sighted.That's my point.Mr. Zhu,I think the previous speakers have shared wonderful ideas.So to reboot Chinese finance after the 20 or 30 years of development,Chinese financial system are faced with four turning points.First is from quantitative to qualitative transformation.We mentioned our banking system,the capitalization of the stock market and the scale of the trust product.They all ranked on top of the world.But with the scale expansion,we pay more attention to,for example,with the economic restructuring and economic slowdown,we pay more attention to risks.So before,we want fast and good sound development of financial system.But now we focus more on risk.And thirdly,financial service as a high-end service sector,it should be part of the real economy.However,after 2007 and 2008,after the financial crisis,the real economy and the financial sector is put on the confronting side instead of helping each other.So it's not only in China,but the whole world.For the financial system,for the banking system,people are not very friendly.We can sense that it's a change in China.And finally,the leverage and risk of the financial system are transferring from private sector to the public sector.Why do we say that?Because the SOEs leverage ratio and the local government financing vehicles leveraging ratio are within control,but they are increasing.It shows that the whole financial system needs to rebalance and reform.But how to reform?I have three main points to pay attention.First is the interest rate marketization.I think in this process,the small amount deposit interest rate hasn't been deregulated yet.That's the most important part.In the US,it also took 10 years for it to be deregulated.And also in the past two years,we see a lot of internet product and the wealth management product and trust product.And these are all tools to push forward the marketization of the interest rate market.If we can use such tools,there will be a lot of asymmetry product.I think we might as well just be direct to establish the deposit assurance system and accelerate the marketization of the small amount deposit.Because the interest rate is an important factor,it reflects the whole economy and its allocation of time and risk.In the past 20 years,we even need a coupon to buy some pork or some other machines.So for different borrowers,people with different credit abilities,it has a different attitude.So when can we let market play the full role so that we can have a fair and transparent pricing of the interest rate.I think this will help a lot for China's financial reform.The State Council has issued a lot of policies.How can the finance better serve the economy?But under the current interest rate system,maybe the private capital won't want to set up banks.And also,second,you have mentioned the multi-layer capital market.I agree with Mr. John and Mr. Liu.I think the core from a business point of view,the development of that market is the most important.It's one stone to kill many birds.Billet,enterprise,or local financing vehicles,they should disclose their financial information more.And it can also help the corporate governance in China.Also,that market development can help the government through municipal bound market and through direct financing to meet the direct investors and give a proper rate of risks.And also,with the debt market development,we can help with the exit system of the stock market.Well,number five,of course,we can consider the possibility of a good debt market and then the investors will not have to waste their money in the low yielding stock market and also the risky real estate industryand also can help dilute the bubble in the property markets and also can help with the orderly development of the capital markets overall.So,I think that that market is really a key to the development of the capital markets.Now,the Hong Kong and Shanghai exchange link is really a good innovation.Now,the Hong Kong is still a preferred choice for IPOs of the Chinese companies.However,in terms of diversity of the currency and the listing places is still lacking for China.Multi currency and multi geographical locations are not there yet.Well,we still have to leave some time.Sorry about that.Just last point.The third point I wanted to make is the implicit guarantee for the exit market,exit strategy,be it the stock market or the banking sector and wealth management products.There's a lot of protection from the government.So,how can we encourage the government to exit the so-called implicit guarantee?That's very important.Thank you so much.Now,we all talked about the internet-based finance and we also received a question from the outside of this venue.Now,Mr. Zhang,E Chen talked about the policy being so tolerant of the internet-based finance in terms of its current development and in terms of identification of risk before they want to institute a proper policy.Now,because of the impact from the internet-based finance,we think this is a very important issue.Now,Chairman Liu Mingkang also made a speech recently about the development of the internet-based finance and the development of the consumer finance.Now,about internet-based finance,I think it really has a great potential toward robust development,but it has to have a good strategy and vision and value system.Well,internet is well equipped with the data and interface based on internet and maybe cloud computing if necessary.Now,three advantages I think it has.It's zero distance with the customers and also low cost.So,everybody can be the provider and the consumer of the credit and also the democratic way of participation.That can really encourage innovation.Now,these three points are the natural strength or the advantages of the internet-based finance.Now,we need to keep those advantages,but they need to respect some pattern or discipline.It needs to be a small and needs to be widespread in terms of risk distribution.And thirdly,it needs to be simple.So,these three points are very important for its viable development and to keep the cost low and risk low and also proper regulation is needed.It needs to be in a differentiated way in terms of regulation,otherwise it can be problematic.Now,internet-based finance is still young,but it's rapidly developing.Over 1,000 such companies,over 200 crowdfunding and cash pool and also the underground refinancing.For example,it's actually a fraud.They would get the money in the morning and they take the money away and disappear in the afternoon.Now,I think this is only natural in the starting stage of any industry.Well,this is sort of like a warm-up period in front of the official competition in games.But after the warm-up,you need the rules before the game starts.You cannot make rules as the game is going on.Or,you only get the rules or set the rules after the games.That will be chaotic.So,it's time now to encourage the industry's development with differentiated rules for regulation.Now,E. Chen,Mr. Zhang.If China's financial system to become as efficient as the US or the European ones,the impact from internet-based finance would not be that disruptive.Now,because of the lack of sophistication in the financial system,the internet-based finance actually can play a bigger role than it should be.So,what are you thinking in your investment strategy?Well,honestly,we are actually not making any investment strategies toward the internet-based finance sector,because just like Chairman Liu said,the rules are not there yet.We are a big conglomerate,you know,under the name CITIC.So,if we make an investment,but somebody is a fraudulent case,and that would be risky for us,be it Alibaba or Tencent.We actually have been,we were in talks in terms of possible cooperation,but no tangible project really pens out.Well,probably because you're aiming too high.Your capital investment is always aiming the bigger amount.Well,we actually,we were looking at different companies,but there were no good ones.Well,Professor Zhu,both these two speakers talked more about risks.What about you?I think,in addition to regulation,there's also risks with corporate governments.Well,behind the risks,this sector is actually promoting further development of the financial system.And also,it does really bring 15% to 30% of yield to the investors where there are no other good options for investment.So,we need to also look at the benefits that it has brought,but also we need to balance between the risks and returns.Now,we open the floor for questions.Who has a question?Please raise your hand,and also identify yourself,and also state which speaker you direct your question to.Now,in the corner there,please stand up.In your remarks,I'm kind of curious,reforms take time.So,in the interim period,well,reforms are being enacted when there is deleveraging,when there is change happening.What happens to growth,what happens to the economy,and how do you mitigate these impacts?Thank you.Sorry,I didn't catch the last part of your question.So,what is the impact on growth in the economy and how do you mitigate or prevent some of these impacts?Thank you.這個目前的... Well, in terms of the current growth of the economy, it has moderated a little bit, it's really only natural because a China's economic growth, well, it's actually different, well, right now the period is different from the 1997 crisis.We are actually more open. The external demand has weakened and internally we have to demand to restructure the economies and also to absorb the excess capacity because there are a lot of industries that have excess production capacity.So that's why the leadership is very decisive about reducing the excess production and also there's the appeal for reduction of environmental pollution and also there is the further reform of the SOEs.I think that's a good and the long term is good for the financial system, but in the short term, in the minute term, there will be some rise in terms of the bad debts. Some people have asked me, we see the increase in the MPL.Well, I said it's only natural. Relatively speaking, it was pretty low and it was in 2010, it was a double digit growth in terms of the economy and now 7.5% and reduced by 30%.So it will have some impact on the banking system, but like I said, we have enough reserves for a bad debt, 3 trillion. We have good the CAR, the capital adequacy ratio and also the permission to issue preferred stock and sub debt.So this is enough to absorb the adjustments of the real estate bubble and also the financing for the energy efficiency and environmental pollution reduction, but we should not be complacent.So two biggest enemy complacency is one of them, one of the two. That's definitely a big no-no.So if we look at the long term, we need to accelerate the reform. So deepening of the reform and acceleration of the reform are critical.So I do agree with the leadership in terms of the direction of the reform before we can embrace a bright future.And the second enemy would be panic. Over 200% of debt ratio and also the doubling of the MPL from 0.8% to over 1%.Well, there's no need for panic here.Chinese have a habit of a good habit of a good sense of direction and also we want to take our time.We want to take our steps gradually. So these are two kind of tendencies of the Chinese people.We should not just panic. I think we still have time because we have these scale of the market to answer your question.Definitely there will be some impact, negative impact on the economy and hence stress and pressure and that we actually can generate innovation and motivation for further reform.We can take a final question in the middle, in the suit please.Eta Wu,question for Guqiu,knowing that you are originally from Argentina.And given what's happening with the sovereign debt situation in Argentina.Is there any lesson that China can draw from your country originally?Well, it's very different. The one thing that I would say and I did work for 20 years covering Latin America.So I've been for the last two years in Asia.China and Asia in general have a unique opportunity to actually determine its own future.The amount of savings and investment is something that differentiates China from Latin America.Both regions have tremendous potential or emerging economies,relatively low debt to GDP,high level of reserves.Not so much Argentina but Brazil which is probably your country or your bank's country.But they have this reliance on external investment that in the case of China is not there.China can determine its own future.So when I see China taking steps slowly but surely.I am very encouraged.I'm very optimistic.And if we really allow the market to have a decisive role on determining the allocation of resources.This will be a great story in not so long.Now for the interest of time,we'll wrap up our discussions.Let's give a round of warm applause to our panelists here.Thank you.I'll see you next year.