 And, uh, originally, uh, Professor Mungi said we could share, um, unfortunately, uh, she's seen another conference, so I will ask to, uh, chair this session. So, my name is Chun-Lai Zhen from the Australian National University. And, uh, in this session, we have, uh, three, uh, speakers. Uh, the first one is, uh, Professor Peter Drucker from Western, from the University of Western Australia. Our second speaker is, uh, Professor Xiaowu Wang from the National Economy Research Institute. That's the only, uh, damage-owned economic research thinking tech in China. And he's a technology director there. And, uh, our last speaker in this session is, uh, Jian Goli, so you already know her. So, I don't need to, uh, use more. And, uh, so each speaker is behind 15 minutes. So, because, uh, time is a little tight, so I hope you can keep your time. And then now we are going to come to the first speaker from Western Australia. Okay, thank you very much, uh, especially to be here. And it's been a recently morning meeting so far. Um, and I hope that what I would say is a little bit to you. Um, so, this is going to be a comparison of China and, uh, India's growth experiences. It's going to be a little bit academic, a little bit, uh, historical. But I think, uh, from what we've been describing today, we can perhaps, uh, leave some clues about what it is that's made China its, uh, its economic success. And also, um, how close India is, if we do this, it's a close call to, uh, to China and to doing something like, uh, what China is currently doing as well as China. So, um, the question is what can growth in economics tell us about, uh, some of the differences between China and India? Um, I'm going to look at two things. First, I'm going to income levels very briefly. This is how rich is India compared to China. And then look at growth rates. We're going to look at growth rates. I'm going to focus on two questions. One is the role of investment. So, I've heard a number of people, uh, this morning talk about, uh, China being an investment in their economy. So, it's a widely held view. I'm going to raise your questions about that view, uh, without necessarily, uh, pigeons agreeing. I certainly want to question what role investment, uh, has played in China and what role will be in the future. And then propose sort of a, we look at, uh, human capital as well. And, um, what is taking human capital growth, um, help us understand what's been going on in China as well as, uh, India. This is a, uh, graph showing the GDP per capita in China and India in 2009 with 10 mortgages. So, considering this graph, uh, right as of now, China is substantially richer, uh, while India than India. About two and a half times as well as India. However, um, this, uh, uh, radiograph gives the GDP per worker, which is more of a productivity measure, tells us how much output is being produced per person and actually engaged in the labor force. And so China is still substantially richer than India. I'm just going to say that it's substantially more productive than India, but it's not, the gap is closed somewhat when you look at it from the spaces. So if we believe in penball tables, data, then it would tell us that, uh, one of the big differences it explains the gap between China and India currently is in fact the, um, is the number of workers per person. Because India has a very large, um, child population, which is around 15. These people are not the labor force, and they can support it. That then poses some challenges to India going forward in terms of trying to replicate what China's done, but it's, uh, ever increasing in labor force. Now, um, that's what I want to say about income labor force. China is richer, um, though we need to be a little bit careful when we're making these comparisons. Let's look at the growth rates now. So this sonar graph shows the data going back to the 1950s. Um, the top right line, the top line there is just the United States, just a comparison. And just please take note of the access here. Uh, it's a lot of access, so it's, uh, it's to make it easier for us growth economists to work out what's going on, but it doesn't necessarily make it easier to do. What it means is that when you get a straight line dragging along at the moment's exit, it's a constant rate of growth. If you can track the constant rate of growth on a graph without a log X, this would be increasing exponentially like that and we'd like to see what changes, right? So we've got a log X, it's a constant, compared to growth rates, uh, each of these countries. What you can see there is the green line of India and the purple line in the United States. It's about the same growth rate as it was in the 1950s, except India is considered a slight acceleration, uh, down here. So right there is where India's been accelerating, uh, since about, uh, 1990s. Now China's a good way, and you can see there, China's greater growth since 1950 has been substantially higher and it's caught up, it's passed India around over 2,000, and now it's sort of, it's around two times the breadth of India. However, this is, it's got a Chinese official data. This is a Chinese official data. And it's a number of scholars, including, uh, Professor Wu from, uh, Hanson Pastry University, uh, one of his work with Angus Madison, we've questioned this data, and we've been doing that for a very long time now. Uh, there's other scholars of my national number also here now, uh, and we've looked at this sort of comparison that's involved. Looking back in 1960s there, India was, uh, supposed to be twice as rich as China in 1950-1960. And when you look at food consumption, energy consumption, other measures of, uh, as well, it doesn't quite stand out. So, the, um, more recent data, uh, corrected data, let's come back here, is this one. This is, uh, also from the keyboard tables, showing China's growth rate since, uh, 1950. And what you see there, 1950 was much, in the corrected data, India's much closer to, uh, China. The GDP is almost the same in 1950. And, um, and the smaller growth rate when you look at China's pulled away, but I don't know anything about it. Now, I've just come back a little bit here. Uh, so, for India, we've got a five-fold increase in, uh, GDP per capita since 1950. For, uh, China, the official data will be a 19-fold increase in GDP per capita. And when we go to the adjusted Chinese data, we get about a 10-fold increase in GDP per capita. So even after all these adjustments, and, sorry, this is GDP per capita, so adjusting for GDP per capita, adjusting for these, uh, official bias and growth rates, we still get China doing twice as well as India over this, uh, long period of 1950 through to 19, uh, 2010. Now, why does it matter? Well, it matters for all the reasons we've been discussing this morning, but matters for one other big reason as well. If you look at poverty rates in China, all right, and poverty rates in India, that, uh, doubling of the growth rate in China compared to India, it meant a five-fold reduction in poverty rates in China compared to a one-fold, four-fold reduction in India. So this is, uh, Chinese growth, it's not just about getting victories, it's about reducing poverty, and that's been very important to China, and that's why growth in India is extremely important for China as well. So why has China grown faster? Well, as I mentioned, the normal explanation focuses on investment, because China's investment rates are so high. So let's have a look at, uh, Chinese and Indian investment, but before doing that, you might, many of you, you might have studied it, and I hope you have, and you might remember a solos one growth model. A solos one growth model is extremely simple model, but the basic mechanics of that model underlined all of growth theory in economics. It has some basic mechanics that goes through the most complicated theories. And one of these serious models tell us is that the growth rate on the economy does not depend on the level of investment. The growth rate on the economy depends on the change in the investment rate among other things, but not the level of the investment. So, um, when we look at growth, we need to think about the changes in the investment rate, not just the level of the investment rate. So here's China and India's investment rates going from 1950 through to 2010, the same period. What you see there is what everybody knows, that China's investment rate is currently very high around 40%. You get 45% of this data. India is now very excited about the fact that they're managing to get close to China's kind of investment rate levels, right? Going from here around 2020, suddenly jumping up to around 30%. But what matters, you can understand the difference in the growth over this whole period, is how much these two investment rates have changed. So for China, you've got a 2.7-fold increase in investment rate from 1950 to 2010, and compare that to India, it's almost identical. So, simple models of economics tell us that we look at this data, what we should be expecting is the contribution of investment to economic growth in these two countries to be pretty much the same. They should have added the same amount of percentage points of GDP per year in both countries, which actually, because India's growth has been lower, this increase in investment in India, the more important source of growth in India is for China. India's had the same amount of investment increase against the lower growth rate overall when its investment has been very important in India, and investment has not been so important in China. Now, I'm actually going to do some sort of a maths deal with you. This is a, I call this my square root, it's not my, it's belongs to a solo and a swan. Right? On the left hand side, on the right hand side here, I've got Y, right over Y, that means GDP per worker in 2010, by my GDP per worker in 2020. Right? And on the right hand side, we've got S5 over S, which is investment rate. Now, this is the investment rate then. Right? And it's a square root symbol. Now, does anyone know what a square root is for? Two, very good. So, if the investment rate had gone from 10% to 40%, that would be a 4-fold increase in investment rate. And what we'd expect to see from that is a doubling of GDP per worker. But what we notice, the Chinese GDP per worker over this period of time, 10-fold. Right? So, the changes that we see in investment rate are a long way from what we, what we can, a long way from explaining how China's growth. So, 2.7-fold increase in investment rate is what we actually saw in China. We're only at, it was a 1.6, about 50% increase in China's GDP. So, that's, well, well, shorter than that, explaining what's going on in China. Now, how much time do I have, Mr. Chairman? A couple of minutes. Let's move to, to looking at alternative explanations then. What I want to propose is a given capital by being supported. The standard method about thinking about sources of growth, understates the role of human capital. What we know is that, when you have a more skilled, more productive labor force, any increase in productivity actually induces capital accumulation. They raise the return to capital and that puts investors to invest more in capital. So, there's a causal link between human capital investment and other things that cause productivity and investment itself. Now, this is comparing proportion of the population in China and India that have no school rate. And what you can see, in this measure, China is well ahead of India, right? So, here on other measures as well, from different secondary schooling rates, primary schooling rates, and so on. But just a little note, India's still got, well, 40% of the population that still have no school rate compared to this in China's. So, potentially then, this is an interesting avenue to look at. What you have to do then is take these enrollment rates and convert the measure to some sort of productivity measure that represents human capital stock. And that's for a complicated, controversial exercise. There's a couple of studies that I've mentioned. Barrow and Lee, they look at whole-ranging countries and convert these human capital attainment rates into human capital stock measures that we can then use as an input to think about what causes growth. And as a more recent study, specifically in China, by Lee from India and Wang, who doesn't know, they've got some new estimates of human capital stocks for China. This is Barrow and Lee data comparing China and India and their measure of the human capital stock. So if we go with their conventional standard measures that everyone else has pretty much used, it doesn't look there's much action there in the growth rate of human capital stock in each country, nor is there much difference between the growth rates of human capital stock. This is the estimates provided two years ago by this new study for China. We don't have a similar estimate of India's that we're actually know. But what it does highlight is enormous difficulty in trying to understand how human capital contributes to growth. There are very, very large differences in studies about the extent of growth in the human capital stock. Now this graph here is showing the blue light, the light blue light, the alternative measure. An increase in the human capital stock of about 3.8 tons for China. That increase in human capital stock is quite dramatic. But it's even more dramatic than that. But wait, there's more. I'm going to try to freeze it to a state night as well. Every increase in human capital stock reduces some capital accumulation. And because of that this increase in human capital stock in this study is capable of explaining practically all of China's growth since 1985. So this is a simulation, for example. The blue line will show the actual growth of China in a computer model reproduces China's growth since 1985. Including all the inputs, investment, human capital, alternative insight. And then we do a counterfactual simulation holding the human capital constant. What would happen to China is that China's growth in human capital over that area. And what we see there is that they're trying to actually grow the collapses. Now it's just a simulation. It's just an exercise. It helps us think about the potential importance of human capital in China and understanding what China's achieved and why it's achieved so much more than India. So let me try and conclude now. The first message from my talk is that getting the numbers right is inherently very difficult. Right? And in a more different understanding of causation between the numbers. Right? Does investment cause growth? It's easy to assume that it's much more difficult to write down an order in economics if that actually happens. Right? What happens is the changes in investment changes, increases in investment cause growth. But the country with a 40% rate of investment would have exactly the same growth rate as the country with a 10% rate of investment. Second, the differences in the investment rates between China and India well, there's apparently no differences so they can't explain the difference in the growth rates. So and last week I mean not last week but last numbers of investment point here is that both countries have got investment rates around about 40% now. To get a big increase in GDP per capita in these countries you want to double that investment rate again to be 80% including that's ridiculous. So another country is going to make much more gains in increasing the investment rates. So any growth from now on at these levels of investment has to come from other sources. So let's put a hypothesis to you that human capital accumulations might have been a critical source of growth in these countries. If that's true then it suggests a couple of interesting thoughts in the future. Firstly China's going to face challenges in ranking up this education system to to accommodate the demands of its growing manufacturing sector. So India has already so forth. For India we've got a perhaps a bigger problem because there's a lot of inequality in the education system particularly female education was alone and as we saw before still 40% of the population don't have any education whatsoever. So and for India this time we've said from the very start India's got a very large population of children. So it's crucial that India gets its education system that accommodate these children so they can be productive and is also very forceful in these very popular areas. Thank you Peter. The title of my presentation is Free Income in China and Income in Equality. There are evidence to show that there are an understanding of household income officials that is unfair. For example you can see data inconsistencies in household income statistics and some other officials data and you can see that based on household income statistics you have you have hardship to explain why there is booming housing sector many houses so in the market housing prices are increased very rapidly and also you can see that many houses every year and many people went overseas for driving all these cannot cannot be well planned by the official household statistics. So the year before last they did a survey for government household income the basic idea of our survey is to gather true data true information about household income and they are according to our knowledge they are basically two problems in the official statistics first thing in the official household survey they collected some information under reporting people's income especially for high income people they are under reporting their income seriously and the second thing is the official survey sample needs a lot of high income people because when they do the survey sampling many high income people refuse to be entering so as a result the sample is more or less fast our survey the megaprogram of data is to gather true information about household income we sample about close to 5,000 household in 64 statistics with different problems because of the survey we use is very different from our official survey we didn't use the method because of information reliability problems we use some other method we have several measures to try to control the reliability of the our data but we got another problem is that we cannot directly use our sample to derive the distribution of income between different people so we use instead we use modeling we estimate the relationship between income and annual coefficient as you know that annual coefficient means the proportion of family food consumption to their total when you have increasing household income you will have decreasing annual coefficient because you will have more money to spend on some other things other than food so based on this idea you can estimate the household income according to people's coefficient and some other variables because we also found that other variables like different locations different level of education of the household and different family size also have income on the annuals coefficient so we control those variables to based on a model we derived the estimated income based on our last model and that's a result you can't see its career but we basically got some very significant estimation for our different variables these are some simulations for the relationship between the household income and we choose some better simulations to derive our income estimation and according to our estimation we found major differences between our estimate and the household statistics having high income people expected top income 10% of household according to the statistics their income for Canada is for the income in year 2008 was only 40 43,000 10 NCN according to our estimation these two people have for Canada household income three times higher that's the official comparison between official data and our estimation you can see that through with a high the top income through we have a major differences between our estimation and the household statistics and basically we found that our estimation and official data is quite consistent for low income for income people our estimation is a little bit higher but therefore top income people there are many differences compare with our earlier survey we have reviewed our first survey in year 2005 for that year we have similar results we have we found that for the top income household their true income is roughly three times higher than official data is so what's the distribution of the hidden income I call the differences between our estimation and the official data as hidden income so the total hidden income as calculated in year 2008 was roughly 90 percent of this hidden income concentrated in the top 20 percent of high income people you can see if you use the estimated data you can find that real income gave the income inequality much much greater much stated in official business according to the official household data the urban top income rule the lowest income rule each account for 10 percent of the household they have a difference roughly at nine that means nine times of household income as the lowest income but according to our estimation this becomes 26 times and if you include the rule of equity in there you calculate the income distribution for the the whole dimension so the top 10 percent of household has a 23 times higher income compared with the lowest income according to the official statistics but according to our estimation is 65 times so the unrecorded income is large and this resulted in much larger income inequality we need to do some double check results we use a different method including the calculate we use the official different type of savings and investment data to calculate household savings we find that basically they get consistent results with our estimation compared with our estimation and the official data there are for the household survey data we have something around 14 trillion Chinese yen in year 2008 but according to the flow of funds they can also come from the official statistics we have 18 trillion Chinese yen but our estimation suggests 23 trillion Chinese yen for the income in that year that means there are different there are 5 trillion Chinese yen differences between our estimation and the official flow of funds data the flow of funds data come from the next economic sensors which is quite complicated information but income did not was not included in the flow of funds data we can trade it as green income that means some income not only included in the official statistics but you also cannot identify whether it's legal or not you based on this estimation we can find some champions in the gross national income of previously we can see decreasing trend of cost for the income as a proportion of G&I that's gross national income but also decreasing proportion of our estimation a decreasing trend of cost for the income is lower but the labor share decreases faster difference we can see that cost for the income is higher but drawing slowly the employees compensation that's labor G&I labor is even lower and drawing faster the proportion of non-labor income is greater from close to 10% to 24% the additional part is basically what we can call a greater income what's the implication for us greater income or greater income is highly concentrated to the high income possible if this leads to greater income inequality and also is related to corruption to real seeking and tax deletion and all these things indicate the needs of the institution of reform for the official system the taxation system the government administration system that means further reform and I think I'll start with an apology that I'm not Jeffrey Harris because his name should really be up here he has written the chapter for the update today he's from a professor at the United States study centre at the University of Sydney and a very high profile writer on the state of the China-U.S. economic relations you might expect that he'd be either in the US or China at this time in fact he's in Europe hopefully dispelling fears of the state of this relationship there so I am sorry that I'm not him I'm hoping that you won't ask me too many difficult questions a little wary of being an Australian presenting for another Australian although one who speaks with an American accent about the world's biggest relationship one that we thought we just couldn't let the days sit by without making some comments about it so I'm hoping to bring up a new some justice to his presentation and also waiting that the lights are there and he can even hear a few questions on the state of the relations if he not follows I think and I'm going to speak as though I was Jeff but I think Jeff that my take on this chapter is that he comes from a longstanding liberal tradition where the entanglement of two countries will reduce the probability of armed conflict and it's for that reason that I would describe his take on the relationship as being primarily optimistic that is that the US and I'll go straight to this bottom punchline there which he's asked me to have on both the introduction and completing signs and slides and that is that the US-China relationship is not going to turn into a Second World War and that is because of its inter-relations economically with the United States and we heard this morning speaking one talking about the fact that China does not want to become a G2 system with the United States what Jeff said is that China and the US have become a de facto G2 by default and I think that's particularly according to the economic relationship with the slow pace of recovery in Europe and the slow recovery in the US as well with China's resilience in sailing through the GFC the sheer size of these two economies means that whether they like it or not their interactions and their combined strength means that they are essentially determining many of the future prospects for the global economy he's very I think emphasises the fact that while China is catching up and then we have these debates about whether it's number two whether it will become number one VPP versus more nominal standard measures it is catching up it is the second largest economy in the world but in terms of absolute wealth and power he does point out that the United States is going to continue to be the number one dominant player for a very long time another point that he makes about the impact of the GFC on the Sino-US relationship and I guess that's the starting point for the chapter is that contrary to some expectations it didn't reduce the imbalances that have become a great source of attention particularly on the U.S. side and his main argument for that is that there's a story going on behind the scenes in terms of private sector interdependencies between the Chinese and U.S. economies and they relate to complex MNC or multinational corporation ties I've got some lovely illustrations that he provides of that so just a couple of three pictures which I think are probably familiar to you all I think what stands out to me looking at this decline in the U.S. trade deficit and it's leading to the point that he makes that the U.S.-Chinese relationship is different from the relationships that the U.S. has with the rest of the world and we see that through the 2008 period with a drastic decline in the deficit the U.S. deficit with the rest of the world some decline with China but really pretty minimal and then already kicking up again from 2009 onwards that's of course mirrored in China's trade surplus with the U.S. I think it's even more stark here that surplus of China with the United States above picking up on the steady increase in very stark contrast with its decline in deficits with the rest of the world and of course the mirror image of that which we've heard plenty about this morning is reflected in China's share of U.S. Treasury bills and that shares risen from just a tenth of total U.S. Treasury bills in 2000 to close to a quarter in 2010 and of course that is a course of concern for both the two economies and the world at large so in terms to Sino-U.S. economic imbalances as I've already said a big source of tension and concern we heard Lee Gunn this morning suggesting that it really is time and imperative for China to refocus its growth in order to partly appease these political tensions that are occurring across the Pacific so they have been increasing rapidly in the last decade and the scale and the imbalance of the bilateral relationship is quite unique and we see that divide through the post-GFC period of course a common complaint or explanation for this in the U.S. is about the manipulation of the RMB and how low to boost their exports and that this is the source of the imbalances I think it looks for a very balanced and reasonable view that this simply cannot be a cold picture and just one slide again we've seen some of these figures earlier this morning but if it was exchange rate manipulation that explained the entire imbalance problem then why with a 10% real appreciation in the last five years have we seen a continual continuing rise in the size of that deficit so it says that can't be the whole picture but again I think he's really balanced in his approach he said there's certainly an element of proof to the unfair competition critique of China that it's the practices in China that are costing U.S. jobs that are preventing entry into the Chinese market with particular restrictions on certain state-owned monopolistic sectors and big sectors like banking, telecommunications and leading the services also a common and he recognises a valid complaint of the continuation of IRPR infringements on the part of the Chinese so it's certainly not an entirely glossy view of how China does business but essentially he comes down to an alternative explanation which I think is the take home message of this chapter and a really important couple of points to follow he says that the trade line statistics embodied in those trade deficit figures grossly grossly misleading the value of the benefits of the Chinese economic relationship with the U.S. His first point probably familiar to many of you it's the role of multinationals and joint ventures with multinationals I am John Chinese firms accounting for half of the exports that lead China to shores and a further quarter of those exports being attributed to joint ventures with Chinese and multinational firms which means that essentially only a quarter of those exports leading China are actually Chinese and he's going to turn this into what is becoming fairly well known now I think a story of assembling China rather than made in China and we've got an example of Apple to follow but the other story is that American MNCs are increasingly benefiting from producing and selling into China so there are two examples and it gives this and there are two big ones one is the Apple iPhone I won't take up too much time on the details of this slide except with the point being that a $180 Apple iPhone the risk of this study has shown that just $6 of the value of that phone is embedded in the output or the added value that's contributed to by Chinese firms and that contrasts with about $10 I think of the financing or the cost provided by American components the remaining two thirds of an Apple iPhone is a counter or in terms of value added by inputs from Japan Germany and South Korea and in fact using this value added approach he or this study has suggested that rather than the $1.9 billion dollar surplus or deficit that the Apple iPhone attributes to the Chinese in the in the American accounts but in fact you could think of there being a $50 million dollar surplus going in the other direction that's before taking into account the 50% sale of profits on retail sales that take place back on US soil so it's a pretty simple story it seems really obvious to me and it raises the question about just how we use numbers to reflect the realities of the changing world the second story is GM and what he argues is that if you want to think about how GM came out of the global financial crisis to bail out by the Obama Administration that it should be less about facts back in between Detroit and Washington and more about what's going on on the Chinese mainland with a joint venture with a state-owned company SAIC and their rapidly rising sales of cars and trucks inside China slightly misleading because some of you will have noticed already that the two scales are different there but still a dramatic climb down to from my reading of just between two and two and a half million numbers of that's in sales terms within the US and it looks like China is just about overtaking in absolute terms so there's a big story happening in Chinese on Chinese soil which again won't be reflected in those baseline or headline grab and trade statistics just a couple of points to go this Professor Garrett doesn't deny that there are challenges and tensions in the relationship but there are real problems for American firms doing business in China and for example General Motors is not allowed to be a full part or have a hundred percent equity or ownership states in their business they're still required to have minority and minority share and there are also of course increasing issues as we've touched upon this morning about Chinese firms trying to move into US markets and that's particularly related to their state connections or as he says they're large they're parasitical nature they're also clearly being tensions and they happen we see them in the newspapers all the time whether on tariffs or currencies and of course those tensions spread into the geopolitical realm as well but according to Professor Garrett none of those skirmishes are out of control in fact he sees them as a pressure valve just releasing some of the tension that is inherently about domestic problems in the United States and in and in China themselves and with more of a political manoeuvre to ensure that the people are kept happy by a little bit of land gang going in both directions none of those are out of control instead what you've seen in I guess he talks about the last five years or the last decade is a cool heads behind closed doors softly softly economic diplomacy and I think here where there's a great lesson for Australia is that essentially he's arguing that it's the strong leadership on both sides of the relationship that has really evaded them to steer through what could otherwise be rather tense times the wrap up for the chapter is the century that we're in and that we're heading toward it's an Asia Pacific century and I'm sure for Jeff that includes China and the US and not China growing up and overtaking that's just not going to happen in the timeframe that he's interested in he recognises differences in values and interest between the two countries and also this deeply unbalanced economy economic structure that causes a problem but also emphasises just how co-dependent the two largest economies have become but I guess the bottom line is that the economic benefits of the relationship this great bilateral relationship of the 21st century are immense real conflict would be catastrophic and that's enough in this liberal sort of strength thinking to keep the cooler heads keeping real leadership and ensuring a relatively stable relationship in the years to come so he again emphasises from the first page to the last we're not talking about what he's not putting money on any kind of second cold war and it spans to the economic integration of the two countries that he concludes with that point and in my questions mainly for the other speakers as well to what extent I've heard said in the past that China's one of the reasons for China's outperformance of China for example is that China has a much stronger plan of economic model which is they're able to grab resources and implement this easier than what they are in India is this a valid understanding of that point in the years to come? to Jean slash Jeffrey relates to my perception is that the American body in politics is relatively uneducated about China the president current president doesn't reflect the ideal of understanding about Asia and from the Chinese perspective there is the perception that the Chinese leadership has not gone through a generational change that seems to be happening in some of the body's politics and because of that one of the older established Chinese leadership will have some difficulty in achieving the kind of economic cooperative relationship that you foreshadowed or Jeffrey foreshadowed his book and the extent to which anyone here agrees that that is an issue that deserves closer attention I guess that the states in India my question is addressed to Peter the states in India have much greater than the provinces of China and so it relates to a previous previous question and that you'll find the most variability in issues of human capital across India that are reflected in such things as the proportion of the women in the population are educated and they in light expectancy in those provinces are particularly of the outstanding example of character and I wonder if you consider feeling this kind of cross-sectional data within a country to draw out important lessons for the very true questions of the year lovely I think the questions I think struggling to sense the answers with because they really just come to the thought practicing we want to model the development of India the modern development of China's town we want to model China's future development we want to model the development of the country to try to leave from what happened can it be due to planning well India also is like a very social state in the market system of intervention of low control what I think is that as I said I think literacy is very important basic education is very important in China and the humanitarian nature of that and the past is very important so particularly planning I have a lot of questions that are very clear on the other hand great Hahah also came out of planning right India has shared friends before we ended in 2012 so there's Plus and Minus it's always been transportation the Neville and so I think it's almost unfortunate to have by a large business But then on that, which is, by and large, made more good decisions in terms of the best way on the use of the questioner, with less to mean that I recommend that among future economies. Also critical is that democracy does slow down some big investment in pushers to change the environment and the planet. Democracy slows down in the end, a little bit. Although they've got to share with us what they're doing, like exercising as well. Yeah, that's just about looking across states and the quality of the capital. Because there's a number of scholars that are looking at that kind of issue. I like that as well. So I think we're going to change to English and any quality and so on. But it's ongoing research. I don't think it's going to be too easy to know whether that's your problem. OK, dear. Yeah, I might just, well, currently they've thought about the question about the Chinese versus the Indian development model. It's obviously a huge question. There's enough debate and we could spend a whole day just thinking about the Chinese development model and this question of how much of it is state led and how much of it is to do with the opening up to market forces. What has it meant to have a non-democratic party in control of the show and increasingly possibly losing control of the show? I think it relates back to Deborah's discussion in Africa and what the Chinese are doing in Africa there. She referred to the Chinese developmental state model. Again, it's a highly debated issue. To what extent has China's development and growth been the consequence of this developmental state? At the break after that I had people asking me whether or not Australia could be learning about China's methods in Africa and could be doing a better job of our own aid commitments by following something more akin to the Chinese model. So I don't know if Deborah has any comments on that idea of the developmental state. There will be others in the room who I suspect might disagree on the extent to which that's determined China's growth. On this question that is really for Professor Garrett and not for myself, I think it's very true that the American population is probably largely uneducated about Australia. We have the same problem about the Chinese and I think we face the same problem in Australia of trying to educate people about the very nuanced situation that we see in the Chinese economy and the population at large. I think the point would be that at the very highest level there's some very sophisticated negotiations going on that there are much deeper understandings than we might otherwise think. And then how that transmits through the two societies I guess very different than Chinese have their media control and ways of kind of controlling just not controlling what the populace think but influencing that to some extent. But ultimately at the end of what we see of the state of the relationship at the moment is that it's that top level very clever negotiations that are actually keeping the relationship on track. And I think again there's a message there for Australia we need strong leadership and I'm not necessarily sure that we're seeing that but to have strong leadership on where that relationship would have in that cool head, softly, softly approach might do us some good to actually start looking at how those two great giants are managing their own relationship and learn a little bit from that for ourselves. Okay, I call the second round, we still have some time. Another surprise, okay. The lady, okay. You can do first. The other one is from the Australian National University. I don't know if you want to comment on that. I think I might want to comment on what you're saying. The important role of education leading on to research and development activities is a major source of economic growth. Professor Mark Dawkins, Professor of Economic History and the Cambridge University of England has done a lot of research on this and demonstrated how the agricultural revolution in England in the 17th and 19th century, industrial revolution in England in the 19th century helped lead the world economy great at the time and post-19th century, to the US, to the major production industry, post-19th century or 18th, Japan has been in the industry and was practically the problem of an age leader and now has moved more to the West of Europe, Germany and France and so on. And Japan is still there and of course they are trying to move it into. But anyhow, it's just the importance of education leading on to research and development and it's the major long-term source of economic growth. Thank you. I have a question for Professor Wang. What kind of a reaction in China officially has there been towards your surveys and data? There's also the data, for example, the national statistic to you about your quality of inspection spend and how would they react to your survey? Okay, I'll move it to your turn. Okay. First of all, I would like to answer the last question, but what is the response from the official statistics in Europe? I got two official raw articles that we saw. They say that my estimation seems to lack for income disparity and free income, but they didn't provide to support their argument so that I wrote an article back and later on they would say that they would like to do some additional work to improve the official statistics for hospital income. Another question from Ross. I'm sorry, I didn't get the question clearly. You talked about national income and natural relationship. I think because there is a large part of the hospital income was not included in the official statistics. It means at least part of this income was also not in GDP statistics. So maybe not to the same science, but the official statistics on GDP may be also more or less underreported. It seems to me that it's very possible by say something 15% or 20% understatement. Yeah, the question was about research leading growth. I think one difference about all of them now compared to a hundred years ago is the globalization of research, I guess. So we're increasing a lot of international capital in these international interventions. I think it's very hard to imagine because in the next 50 years we're seeing the gravity of research in other countries. For those ideas, national ideas, international ideas, and global commitments from us. Just so you know it's not a publishing era, it was partly because he is one of China's leading experts on inequality and we thought it was too good an opportunity to let go. He's actually written a paper for the book on an international perspective on China's urbanization, so quite a different topic. But even just the links back into Ross's question about this GDP, whether it translates into a national accounts problem, I think it's a really important one. You look at the size of the numbers and the size of the tower is suggesting that the statistics are out by has implications, obviously, for the extent of inequality within China, which then links back into how this re-balancing of growth is going to work. But it also depends on whether they're spending or saving that money, which in turn I think feeds into, obviously, the inflationary pressures within the economy, the pressures on these capital controls and whether they're actually managing to break out the size of the system. I think the numbers are accurate and even if they're out by $5 trillion, I think we're still talking about an extra $5 trillion floating around that could have meaningful implications well beyond the inequality that it presents for the Chinese economy. So I hope you'll agree with me that it's more relevant to today's discussions than you might at first thought. Okay, I think the Q&A time is over and the sums are really good questions. And before having tea and coffee, it's a success for our three speakers.