 Hello everybody, thank you very much for coming to this session. I'm very excited about this session. My name is Jameel Andalini. I'm the Beijing Bureau Chief for the Financial Times, Financial Times newspaper and website. I'm very honored to welcome an amazing panel tonight this evening. I think we've got a very fascinating topic, something I spend pretty much my whole life. Thinking about and working on and have for a long time. We have a very, very distinguished group. This is, I think, I can probably safely say the most distinguished panel I've ever moderated. So I hope it goes well. I think that this topic is increasingly relevant to all of us. It's something that all of us probably think about no matter where we are in the world these days. I just have one housekeeping point, actually. I want to point out that about 10 minutes before the end of this session, please don't all leave. We have a presentation of an award. It's for the World Economic Forum Chinese Global Growth Companies Honorees in 2014. These are the companies that will likely be the next Chinese globalizers. So I think you'll all want to stay around to see the next Alibaba in action getting an award here from the World Economic Forum. I'm not going to go into extensive biographies of my panelists. I think you all know exactly who they are. I don't think any of them really need any introduction. I think we will just go into the panel. In the interest of time, you'll also be able to look into the program to see if you want to know anything. If you've been living under a rock I don't know who these people sitting next to me are. The topic we're here to discuss is how China's future growth trajectory will impact the rest of the world. When I first moved to China in 2000, that's when I first arrived here to work as a journalist, the economy was the world's seventh largest. It was smaller than Italy's economy. Today it's the second largest, as we all know. It's behind only the United States and it's four times larger than the Italian economy. That's in just 14 years. Chinese economy has managed to lift hundreds of millions of people out of poverty. And we still, to this, at this moment, even though it slowed a little bit, we still have 7.5% growth, which is really the envy of almost every other economy in the world. But as I write often in the Financial Times, there are also increasing signs of stress. China is witnessing an environmental disaster as a result of its growth model. Since the financial crisis, total debt to GDP in China from 2008, it was 130%. And in the middle of this year, it reached 250%. That's in the space of just five years, so an increasingly credit dependent economy. If you look back in history, there's never been an economy that increased its debt ratio at such a fast pace and did not experience a financial crisis. Many of you will have driven here or taken the train here, and you might have noticed the forests of empty, half-built apartment blocks in the middle of nowhere. It's something I spend a lot of my time doing when I travel around China. I count empty apartment blocks or apartment blocks with the lights off in the early evening. Overcapacity is a massive problem. It's a massive problem and it affects several of the people on this panel quite directly. I want to give you just the end of my little spiel, my little intro. I want to give you an astonishing figure, first reported in the Financial Times, which I think really illustrates just how crazy some of the infrastructure build out and some of the construction has been in China in the last few years. In 2011 and 2012, China produced more cement in that two years than the United States did in the entire 20th century, from 1900 to 2000 inclusive. Now just think for one minute, what did America build in the 20th century? It built Manhattan, most of it. It built most of Chicago. It built the Hoover Dam. It built the interstate highway system. But in that 100 years, it produced less cement than China did in two years, 2011 and 2012, at the height of what I would call the Chinese real estate bubble. Now, someone who's far more qualified than me actually to talk about this and who I quote regularly and have known for many, many years is Marjun, Professor Marjun. And he is now the chief economist for the central bank, China's central bank. And I'm going to ask him briefly to give us an overview of where China's growth is headed and what the implications are for other countries. So, Ma, thank you. Thank you, Jimmy. I'm going to make three points within three minutes. Firstly, the given topic on Chinese growth outlook and secondly, how structurally China will evolve and certainly impact on the rest of the world. In terms of growth outlook, on the positive side, we've been seeing some pick-up in export growth the past few months. In July, it was 14. something percent and the last month, it was 9. something percent. Stripping out the base effect is still pretty decent. And private investment is exceeding SOE investment, which is suggesting that market-oriented reform is making progress and also a number of mini stimulus measures were making an impact on the investment, especially in the railway and public housing sector. So, these are the positive aspects of the growth story. Of course, there are downside risks, especially in the real estate sector. Sales have been very weak and weak real estate sales typically suggest that the investment in the real estate sector will likely to slow further. But I do believe that China has the policy tools to ensure that overall economic growth will be largely steady. Another related but important point I'd like to make is that even though GDP growth has slowed a bit in the past few years, our employment situation is quite good. Premier Li Keqiang in the past few months mentioned a few numbers on the surveyed unemployment rate in the urban sector, and these numbers suggest that the unemployment rate is declining. At the same time, we have some other numbers from the labor ministry, which is called Chou Ren Bei Lü, which is a ratio between labor demand to labor supply. And that ratio continues such as that the labor market is improving, meaning that the demand actually exceeding supply. Moving on to a second topic on structural transition, I think China is making a few moves quite rapidly. One is moving towards the services sector away from a manufacturing-dominated growth model. This is reflecting the change of consumer preference in favor of services and also reflecting the demographic trend, because the old age population is increasing rapidly. According to our estimate, the old age population will rise by 70% in the coming 15 years, which obviously suggests that the health care industry is going to grow very rapidly. And health care is a major part of the service industry. And the other major structural change is energy mix, I think, is going to shift away from conventional coal and move rapidly towards cleaner energy, such as natural gas, wind, and solar. And finally, China is moving up the value chain, which is a topic for metangent through innovation. And a major driver for that move is that our labor cost is rising rapidly. And with very high labor cost, the labor-intensive manufacturing industry will decelerate and continue to migrate to other emerging markets. And therefore, sustaining our growth through innovation and productivity growth is becoming increasingly more important. And that requires our increasing efforts in promoting innovation in the country. Finally, in terms of impact on the rest of the world, I'd like to stress the three points. Of course, there are many other points to be discussed as well. Firstly, as Chinese labor costs rise further, and our labor-intensive manufacturing moving towards other emerging markets, including India, Bangladesh, and Vietnam, this is going to be very positive for these countries' economic growth, in particular for the growth of their manufacturing and transport industry. Secondly, China will also be increasingly becoming an exporter of capital to the rest of the world, including through BRICS Bank and Asia Infrastructure Bank. And finally, China will be the largest buyer of clean technology from developed countries as we're moving towards a greener economy. Just to give you one example, in 2013, China's newly installed wind and solar capacity amounted to 30% of the total installation in the world. And I think this trend is going to continue. Thank you. Thank you very much. I'm going to call on Mr. Derapaska. I have one serious question and one slightly gratuitous question, which I'm sure many people in the room will be interested to learn about. My first question is Chinese overcapacity, in particular in the global and in the aluminum sector here in China, has had a huge impact on global aluminum prices, on the global aluminum industry. Could you give us just a little bit of a reflection, reflect a little bit on how that has impacted your business in particular? And the second question I'll ask you now and you can answer however you feel appropriate. When do you think we'll see a Chinese owner of a British football club? And what advice do you have for prospective Chinese buyers of British Premier League clubs? Thank you. OK. Overcapacity, not just an aluminum industry in China, still cement, glass, and many others. And I think it's reflect, it's a quite free market economy and high regional influence in the in competing for the job creation. And regional authority were managed to influence in the local banks, not leading banks, mostly local banks, to open credit for this project. And there was not enough federal regulation on how to actually promote proper standards to make sure that inefficient technology and inefficient industrial plants shut down. But it trained a lot the rest of the industry all around the globe. China used to import a lot of aluminum and suddenly in 2007 become self-sufficient. And then the world crisis transportation sector collapsed and we end up with a huge stop all around the world, in US and in Europe. But it helped us to understand better the supply and demand balance. And outside China sector was highly consolidated. Everyone took a certain measure to optimize output. And now we have a deficit outside of China, which important to help us to make more reliable market because stocks going down and we see recover an aluminum price. Important not to learn how China will develop further. It's definitely our capacity. And China doesn't need so many small inefficient smelters. And as you mentioned, with this step to the clean energy, coal-fired based smelter should face more pressure on cost. And there is, of course, an exit in China. Industry aluminum should be more consolidated. Lead and bank already stop crediting new smelting capacity because they're not able to service it that. And I think after consolidation industry should move further down to downstream. And aluminum is a future metal for the China. It's great more efficiency in transportation. I saw recent presentation of Shenhua Coal Company, which developed new wagon, which six ton lighter and could bring actually six ton more cargo in urban and transport. We know there is a fight for high emission, no better emission standard in the car industry. And aluminum brings efficiency, especially for commercial vehicles. We know that there is no more opportunity to improve efficiency in construction. Even in this building, most of the cable is a copper. And copper was expensive metal for construction. And this cable could be done out of new alloys from aluminum. And there is more application, which actually could help in China to be more efficient. And this is the way we believe China's aluminum company will develop further. They already made substantial shift to the West. There is more opportunity to be sustainable on energy side. And China should go outside first to find resources the same as we did. We don't have resources in Russia. We invest all around the globe in Latin America, in Africa, in Australia. And there is a move for China company should do. And of course, it's important to install in a new technology because pollution is not just air pollution. We all suffer in China from air pollution. But more important is that ash, fly ash, which sits around in a coal-fired plant. It contaminates the air and water. And water contamination will bring a long-term effect on agriculture. And safety is standard. It's not just today cost. Yes, you can increase labor pay. But safety, it's long-term cost, which finally government will bear to keep health and security in line. And we believe everything could be done. What we hope, that China will not be about number volumes, but would be more efficient. And the recent Likisan presentation shows that China will follow this efficiency way and could solve this problem. As your second question, I hope never. I hope never China will buy any football cup weapon Britain. China needs so much thing to do for us here. Fair enough. We can talk later about the exact advice you might have for them. So now I'd like to call on Madam Zhang Yin, who many of you will know. She's been named several years in a row as the most influential and, in some years, richest woman in China. She is a towering force in the Chinese industrial sector, runs the largest paper recycling and paper production company in China. I would like, if Madam Zhang could, perhaps you could, tell us a bit about the process of industrial upgrading here in China and how Chinese companies like Yuan are upgrading themselves. And maybe you could touch on a little bit how this is affecting the competitiveness of Chinese companies. Is this eroding your competitiveness compared with, say, other countries in the region or low-cost production companies around the world? Thank you. I think the upgrade is a constant pursuit for the companies, as we all know clearly, in the past development. No, we are using a very cheap car manufacturing products to compete on the international arena. In this process, for a developing country to a certain extent, we do need some kind of a transformation upgrade in the process. The process itself is not a long-term pursuant. Transformation upgrade would mean our industry, our manufacturing transformation, including environmental protection, improvement, typing of the potentials and innovation to stabilize our quality of the products, how we could make sure our products can really be internationalized, can be on our part with our peer products. So this is something component of the earth we need to pursue, a very good objective. In addition to environmental protection, we also need to try to do an industry 3.0, almost 4.0, as mentioned in Germany. I think even many companies right now in China cannot reach even 3.0. In addition to environmental protection, we also need to say by what time we can reach the standard of 3.0. This is the company goal for the nine dragons. So that is our goal. Only by doing that, we can really integrate ourselves within the international community. So our products can take its dual position on the international market. So this is really very important, has profound meaning for our enterprise. Thank you very much. And to Minister Zhang. Zhang Xiaoqiang was the head of the NDRC, the National Development and Reform Commission, for many years. Those of you who live in China know this is one of the most powerful, doesn't matter what it says in the official rankings, the NDRC is one of the most powerful institutions in China. And so you should get to know this man. He's retired from that position now, but still very influential. I'd like to ask you, and I know you speak English, so I'm going to ask you in English, what is the, can you tell us a little bit about the government's vision for rebalancing the economy in the coming years? And can you maybe tell us a little bit how other countries, many people here from other parts of the world, how could other countries play a role in this rebalancing of the Chinese economy? How could investment treaties, for example, be used as a tool in this process? Similar to, we all know when China joined the WTO, World Trade Organization in 2001, it was seen in China as a tool to sort of break through vested interests. And it was an external tool being used to achieve internal goals. So maybe you could explain a little bit about that. Thank you. And I think we have a lot of the discussion about China's rebalance. I think that according to my personal understanding, let me make things relatively simplified, three points. First, the development speed will not be so high, 10% every year. In the near future, even much longer time, the development speed or growth speed will be around 7% to 7.0%. We will give the priority to the quality and efficiency of the growth instead of look only at the speed of the growth. The second, make much more effort on the challenge for the transfer of the development model and upgrading the industry. Like we already emphasized many times, previously we relied too much on the investment and export. But in the future, we will rely more on domestic demand, particularly the consumption demand. For example, previously, the China's growth mainly driven by manufacturing industry. But in the future, we will give more priority to the service industry. And also, for the traditional industry, like you mentioned earlier, the overall capacity and also the serious problems of the pollution have been a big challenge for us. So we will develop the emerging industry at the same time upgrading the technical level and the competitiveness of this traditional industry. And of course, we rely too much on consumption of the energy and natural resources, which already introduced serious problems of the pollution. Last year, China consumed 20% of the world energy, 40% of the copper and aluminum, 50% of the steel and the coal. In the future, we must rely more on innovation to accelerate the implementation of the innovation-driven strategy, relying mainly on science and technology innovation, management innovation, business model innovation, so far so well. And the third point is that how can we meet this kind of the important challenge or target? It must base on the deepening of the reform and the opening to the outside world. Like you all know, in the end of the year 2012, the third preliminary of the 18th Party Central Committee meta-strategic important decision have a very comprehensive reform package. The priority we'll be giving to the economic sectors and the key for the economic system reform makes the market force the main force for the energy or other kind of the resource allocation and also improves the government function to build up a servicing government. And of course, we should also open further more to the outside world. If we look at the practice in the last year, you can see a lot of the reform had been adopted like the administrative reforms in the government agency to abandon or liberalize the decision-making power to the enterprises. Also, the financial sector reform, the SOE reform had been pushed ahead. So I think for the rebalance of China, those are mostly important things. Like you mentioned, that everyone recognized in 2001, when China joined the WTO, its player very important role for China's very rapid development. So in the future, I think China will build up a new framework for the more open mechanism. That includes how to trade the foreign investment or the OEC investment of the Chinese enterprises. As many people know that the Chinese government has decided, even in the domestic, we will set up the next list. That means in the future, all the market participants will just only, based on the law, have the equal opportunity for their investment. For the foreign investors, we'll explore to build up the new framework. That is pre-national treatment and plus the next list. That means the foreign investors will have much more broad sector involvement in China, particularly in the service industry. In fact, in the Shanghai free trade pilot zone, they already implemented this next list. And China had the bilateral investment treatment negotiation with both the United States and the European Union. All this negotiation, both had agreed, should be a high standard based on this pre-national treatment and the next list. And in last July, China and the US government had agreed that within this year, we will finish the negotiation of the framework and of the article. And in next year, we will have the real negotiation about that. So from the market exercise, I think the foreign company will have much more opportunity. And if we look at the market itself, I imagine they have, in their hand, overcapacity for some traditional industry. But they have so many emerging industries, such like the energy saving and the environment protection, the service sectors, and the new energy, and also the high tech industries. They have a lot of the opportunity for the cooperation with the foreign companies. Thank you. Thank you very much for that. That's very helpful. Now I'd like to turn to Lord Turner to get a bit of a sense how I know you come here all the time, but I'm going to ask you as a representative from the parent company home from London. I'm not from London, but my paper is. I'm going to ask you for the view from outside of China. We, in recent years in the last decade or so, the real impact on advanced economies has particularly been from Chinese low cost production. We all know that when you pick up anything in the West and you look underneath, it says Made in China. So I wanted to ask you if you think that is how it's going to change in the coming years and how long do you think that might last? Well, thank you. I think over the last 10 to 15 years, the perception of China in economic analysis has been that it's been challenging for low cost mass manufacturer. It's been very good news for the makers of high sophisticated capital goods to the countries like Germany, Japan, Korea in terms of the exports of capital goods. And recently it's been very good for commodity producers because of the super commodity cycle. So I'd just like to think, you know, does the next 10 years just bring us more of the same? Do we talk about the same things or will we be talking about different things? And I want to talk about two things that I think we'll be talking about. One is whether China can rebalance without crisis. In 2007, China had private credit equal to 130% of GDP and it was investing 40% of its GDP. And everybody in the world was then discussing in economic circles the fact that it would have to rebalance away from 40% investment to more consumption. And for the last five years, it went the other way and the investment went up from 40% to 50%. And the credit to GDP, as Jamie already said, went up from 130% to 250%. And actually that was very good news for the rest of the world, as I think Mr. Zhang said, because it helped stimulate the rest of the world amid our financial crisis. But it creates enormous risks. It is an investment-led, infrastructure-led, property-led boom which creates the risks of overinvestment and it creates the boom that the level of debt is simply too much and is unsustainable and that the more you introduce hard-budget disciplines, you start getting defaults, you get some category of crisis. How China manages that, whether it can manage to achieve a smooth transition off that credit-intensive, investment-intensive path to another path, is going to be crucially important and the rest of the world is gonna watch this carefully. If it doesn't, the numbers are extraordinary. By 2020, China will have a GDP of maybe 20 trillion. Let us suppose that the credit growth has gone up and at that stage, Chinese credit to GDP is 300%. 300% of 20 trillion is 60 trillion of debt contracts of credit out there, right? This is four times the problems of US mortgage debt which crystallize the global financial crisis. So whether China can manage that, the interrelationship between capital account liberalization which makes this issue more important to the rest of the financial system, the issues of introducing hard-budget discipline or bailing out, they're very difficult to manage but we will watch very carefully how effectively they are managed. But there's one thing which will help China manage that which is my second factor that I'm gonna mention which is I don't think we're yet paying enough attention to the big change in demographics and workforce which is coming. From about next year, the Chinese total workforce, 18 to 64, begins to decline slightly. But what happens even more dramatically is young workers. The number of Chinese aged 15 to 30, next year is forecast to be and will be because it's a pretty good forecast one year out, 323 million and by 2025 will be 244 million. It's an 80 million reduction, a 25% reduction in the number of 15 to 30 year olds in 10 years. I'm not at all surprised that Marjoon is saying that the labor market is tightening, that unemployment is going down. I think we are emerging to the point where the leadership is gonna have to worry much less about employment creation because there is much less of a reserve army of labor left in the rural areas. That group is increasingly old. There are people who may never move at all and we are gonna have a very significant tightening of the labor market. That is good news for China. It is gonna create enormous incentives for going up the value chain for automating. What does that look like to the rest of the world? Well, I think for the big capital goods providers like Germany, Japan, Korea, in its initial stages, it's probably positive because it means more automation equipment, more robots, et cetera. But further out, it's challenging because the more that China does manage to go up the value chain, the more that it's not gonna be simply an exporter of manufactured end consumer goods and the more that it'll move into capital goods itself. So I think we could see a major change in the balance of who gains and who is threatened by China. Finally, is it highly beneficial for the emerging markets, the Bangladeshes, the Vietnam? I'm not so sure because I think what is gonna happen is that China, like the advanced economies, is increasingly gonna take manufactured jobs and robotize them and make them capital intensive. And I actually think that the idea that this is gonna be a great boom for the movement of low-cost jobs to emerging markets is probably overstated. But that's at least some of the things that I think the rest of the world has to think about as we see China making enormously important transitions over the next 10 years. Thank you very much for that very cogent analysis. Now what I'd like to do, I'm gonna take my moderators, I'm gonna assert my moderators' privilege and I'm gonna ask the first question that I want to throw open to the panel. Anyone can answer it, but if you don't, I'm gonna pick someone. And then after that, I'm gonna open the floor to questions from all of you. So the question I want to put to all of the panelists is something that's very dear to my heart, living in Beijing for the last 10 years or so, breathing the air and having my small children breathe the air. I'm really interested in whether, and I know some of you have worked on this quite extensively, whether you think China can continue to grow quickly or as quickly as it's growing now while also cleaning up the environment or fixing some of the really terrible environmental problems that we see now. And if you think that China can do that, please tell us how. Maybe I'll start with Ma Jun because I know you really have worked on this a lot, so thank you. We'll start with you. I think on the one hand, cleaning up the air pollution and other pollutions would indeed increase the cost of firm's operation. And from this perspective, it's likely to slow growth. Just imagine it happens to other major countries like indeed what happened in the 1970s, the oil shock to the U.S. It was substantially reducing the U.S. growth potential for a long time, but this is based on assumption that cleaner energy would remain much more expensive than the conventional coal. If this assumption changed, then it's possible that we can move towards a much cleaner economic structure without hurting the economy too much. And in that regard, I'm hearing lots of good news, including yesterday from a coal company that they're making progress towards lower cost technology for cleaner. Solar is a great example of that. China's reduced massively the cost of solar. Definitely. The last few years we've been seeing very sharp reduction in lots of alternative energies. So that's one point. The second point has to do with the way we manage the transition towards the clean economy. If you manage the process by administrative measures, for example, shutting down a large number of polluting factories without creating opportunities for them to move towards new industries like cleaner sectors, then it could be very destructive because you make these factories over capacity and labor will be made redundant and capital will be idle. But if you can use much more economic means, for example, tax incentive and green financing policies so that you can restrict or reduce the incentive for investing in the old dirty industries, at the same time inducing the resources including capital and labor to move more quickly towards new energy. That's going to substantially reduce the impact of the process on overall growth. Perhaps, Lord Turner, you could share with us. I know you worked on climate change, obviously, a lot. Maybe you could share with us some of the ways that global best practice, where we've seen other countries that have managed to maintain high growth rates and but reduce pollution or suggestions you might have in China's case. Well, I think your question was, can China get on to a more less carbon intensive and less local pollution based growth path? The answer is, I think both it can and it must. It must because all of us who've been in Beijing when it's polluted know that this is not a great place to be and increasingly, as Chinese people get richer, they're going to say one other thing I want to do is live in a city which looks nice. And Beijing is going to be wonderful once it's cleaned up. I was happy enough to be there on yesterday and yesterday morning, it was gorgeous. I could see the mountains, I've very rarely seen them. So it has to be cleaned up and it has to be cleaned up also for global environmental reasons. And I think it's important for us to understand that China increasingly is not just part of the story on global warming, it is increasingly going to be the story. China's total CO2 emissions at approaching 10 billion, probably over 10 billion in 2014, they were approaching it in 2013, are now significantly higher than the European Union and the US combined. And indeed, this is the year where China overtakes the European Union, not in total emissions, but in emissions per capita. It's important to realize that. It is overtaking the EU in emissions per capita. And as somebody myself who's been involved in the UK debates about climate change, I'm increasingly realized that as these trends go on, it's going to be more and more difficult to win the argument in the UK for action because the argument, nothing matters, but China is going to be even more compelling. By the UK now has about 600 million tons of emissions. I guess by mid-2020s, according to the committee that I chaired, we'll have that down at about 400. My guess at that stage is that that will be about 3% of China's emissions. It will be very difficult to persuade British people that they need to act if China isn't acting very strongly at that stage when China is literally 30 times the UK level. Can it act? Yes, I think it absolutely can act. I think it's important in this debate about action and growth to distinguish, it's impact on growth to distinguish two things. There are some things that you do to reduce your emissions and improve your local quality which have no impact on growth at all. If you can persuade somebody to drive a car which goes around the city at 100 grams per kilometer, not 200 grams per kilometer, that doesn't hurt economic growth and that's exactly the sort of reductions that we're achieving in Europe and China can do exactly the same with appropriate regulation. But Marjoon is absolutely right. The fundamental problem is the cost of the energy source. I think the great news here is the collapsing cost of solar PV. This has come down to an extraordinary extent. I think it will increasingly look competitive even with fossil fuels, or at least the margin of extra cost will be sufficiently low that with some determination to invest and some determination to add energy efficiency improvements as well, one can invest in it and other renewable technologies, including nuclear and low carbon technologies in a way which can very significantly reduce the carbon intensity of growth. The UK is now legally committed that by 2050 we will have our emissions 80% below 1990 levels. We'll have taken them from 10 tons per capita down to two tons per capita. China is now on eight tons per capita. Two tons per capita by mid-century is a completely attainable objective for all countries that are determined to get there. Thank you very much. Mr. Dierapesca has something he'd like to say, about its capacity. I think it's an important issue, and it's already said that China becomes an exporter of capital and exporting capital. China could also help itself to reduce emissions because why do you need so many steel factories in China if you bring iron ore from all around the globe? Why do you need aluminum factories if you bring in box-sized aluminum? Of course you can go and invest. The same was done by Korea and Japan in the 70s and 80s. They invest great production sharing and have a great benefit from that. But clean energy, there is always concern. Look at the Germany. Efficiency of their system fall down dramatically. There is a certain level of clean energy which can be used. And without nuclear or gas in a turbine you couldn't balance. And of course, recent development of the contract Russia and China helps. But also, there is more clean energy just outside of China on Russian territory. We have more than 80% Russian hydro resources on top here. And for that, to manage, to bring it here, especially for the peak power, it's not just base load. You need to be able to solve peak power because it's most polluted ours in general. You need to develop energy system. And for that, to reform energy market. It's still very well managed because of China state grid. China state grid still managed to allocate costs in different regions and different sectors. But it should be reformed. It should be real in the energy market. And it helps more further. And as I said, the transmission system should be adjusted to make it work. Thank you very much. Thank you very much. I'd like to add something. I'm involved in the manufacturing industry all the past many years. The efforts in the environmental protection in the country is huge. Although the atmosphere is not good, I think it's improving. First of all, the government made a lot of efforts. I see that very clearly from the perspective of a manufacturing industry in the past. GDP goes faster than environmental protection. Right now, environmental protection goes hand-in-hand with the GDP growth. For bigger companies, actually, they try to keep pace with environmental protection growth. For smaller business, the government may give them a certain period of time to upgrade. If they cannot upgrade, they will be squeezed out of the market. I'm confident in the future. Zhang Wuzhang, Wu Jiyuan. When we talk about pollution, in fact, in recent years, we all understand how serious the air pollution is. But in fact, not only the air pollution, the water pollution, the land pollution, all are serious problems. And just like previous ladies and gentlemen mentioned, very clear. In fact, both the Chinese government and the Chinese enterprises and the Chinese people had a more and more clear understanding for the sustainable and health development. We must pay great attention to protect the environment. Of course, how to protect the investments increase the quality of the life. They have different ways of the mix of the pictures. For example, for the industry manufacturing enterprises, they have much higher standard for their production procedures for environmental protection. And of course, we need to accelerate to develop the new and clean renewable energy, such like the wind power, solar power. But one of the very important things that China is one of the largest energy consumption country I mentioned earlier, 22% of the world energy consumed by China. And half of this, 70% are coal. So how to develop the clean coal technology is a very important thing for China. So for all these kind of things, we need to do not only the engineering or technical solution. We also have the sound and comprehensive mechanism of systems to push ahead, to give the incentive for the enterprises, for the local government, for the people to protect the environment, and in the meantime, to keep their sustainable development. Thank you very much. So I think we've got time for one or two questions before we have to move on to the awards ceremony. Now, I'd like to remind everyone that this is an opportunity to ask a question to some very distinguished panelists. It's not an opportunity to stand up and make a statement political otherwise, any kind of statement. I warn you right now, if you stand up and make a statement, I'm going to cut you off. And the mic will be taken away from you. So questions only, please. And I'll take one right here in the front. Thank you. Thanks, Jamil. Lutfe Siddiqui from UBS. My question is, is the growth in credit and indebtedness in China, is that, are we looking at a crisis or is it a concern, given that external debt is still only 10% of GDP and loan-to-deposit ratio is still less than 100%, including estimated shadow banking? And do you have a specific person you want to ask or? I think the credit concern was raised by Lord Turner. So perhaps I'd ask him that question. OK. Well, I think it certainly can be a concern. I mean, it's important to realize that we can have debt crisis, even if we have zero external debt. I mean, the world has no external debt. We don't owe anything to the moon or to Mars. But the world can have a global financial crisis. We can have processes where we build up a set of debt claims, which we believe are claims on wealth. And then if that wealth crumbles away because property values collapse, you have a whole load of people who are then determined to deleverage. And their attempted process of deleveraging, of cutting investment and consumption, drives economies into recession. And if it's bad enough, even when we cut interest rates to the zero bound, we don't stimulate them. So I think it is very important to realize in these debates, debates about financial crisis. There are specific features when it's external debt, but you can still have an entirely internal debt. The other thing is, we should always be wary of the thing saying, well, there's a lot of loans, but there's a lot of deposits. Again, what we know from the global financial crisis is you can't net out financial claims and say there's no problem because they net to zero. I mean, by definition, if you did that, you could never have a banking crisis at all, because the assets and liabilities of the banking system net completely to zero. There's nothing left when you net them out. Again, our problems are created by somebody owes debt and gets into a trouble and cuts consumption and tries to save money. Somebody else still has a good claim, but they have no offsetting desire to re-stimulate the economy. Now, I think the bigger question on China is, should we worry because at the moment, a lot of these claims are within a still highly managed system, right? They are from local government financing platforms or state-end enterprises to state-owned banks, and it is still possible that if there were real problems, the Chinese authorities can essentially socialize the problem. They can move the debts around, write it off here, move it into asset management companies, and simply take out more public debt, and public debt is relatively low. But the bigger the figures become, the more that that would be a big hit even to Chinese fiscal sustainability, and the more that China goes down as it should go down, the path which it says it wants to go, of hard-budget disciplines and maybe eventually capital account liberalization, the more difficult it is to get rid of the problems by simply saying, I've got a set of accounting entries all within the one system, because those links then go out into the private sector or the international sector. So those are, I think, some of the things that I don't think we should think it's all okay because deposit-to-loan ratios are still high or because external debt is still low. I know Margin would like to answer, so I'll let you have a quick answer then I want to get one more question, and then... Yeah, thank you very briefly. I'd like to add a few points, citing some results from academic research. Academically, some people have done a study using cross-country data, more than 100 country numbers and tried to assess the relationship between leverage ratio and the probability of financial crisis. And there are two conclusions which are relevant to your question. One is that there are lots of different factors, including leverage ratio, that affect the probability of a crisis, not just the leverage ratio. Some factors are positive. For example, if the country has a high savings rate, if the country has higher foreign reserves, it tends to reduce the probability of crisis. The other point is that if you control all the other variables and only change the leverage ratio, a high leverage ratio tends to increase financial risk. Great, I think we have time for just one more question, and then we will move on to the award ceremony. So there's a question right here in the front row. Sorry, I'm quite short-sighted. I can only see it about the front row. Thank you. Quite interested in some of the key measures China will take in terms of shifting to a more service industry-oriented economy, especially are there any best practice elsewhere that's looking at the growth of a service industry when the demographic structure is certainly going towards a lower supply of labor while service, no matter how you look at it, will always be labor-intensive or talent-intensive. So I just wonder, maybe Mr. Zhang could share some of the key measures the country is gonna take, and perhaps also Lord Turner, if there are any best practice that China could learn from. And I think that many of the participants in this conference may note it. In the last year, in the share of the GDP, the service sector is the first time, is larger than the manufacturing industry. If we look at a picture we have found, in certain sectors, they have very rapid development, including the financial sector, the tourists, the healthcare, the e-commerce, and those kind of the service industry had very fast development. So generally speaking, I think that the government will pay more attention to build up a favorable environment for the service sector's development. Instead, only give certain sectors some incentives. I think that is very important. Secondly, like I mentioned earlier, in the future, we should allow the market force to play a key role for the resource allocation. For example, I will understand the e-commerce developed very fast. It's not mainly for the government driven. It's because entrepreneurs see the market opportunity for the demand. For example, for the e-commerce in the retail value in 10 years ago, it's only 20 billion Army Yuan, but in the first half of this year, it's reached to 1.1 trillion Yuan. The 44% increase compared with the same period of last year. The main players, not the government, it's Aribaba, it's Ying Dong. And of course, with this development, they have relevant sectors, such like the fast delivery industry. In the recent three years, every year, the fast delivery industry's increase is over 50%. So I think that they have a lot of the opportunities existing for the market. The government is to build up the favorable environment, a lot entrepreneurs, and the market force play a role. And of course, the government should also do something to accelerate the development of certain sectors. Thank you. I'm gonna have to stop, and maybe you could speak to Lord Turner afterwards if he has a minute. I know we all want to go listen to the premiere as well, especially me. I've got to write about it later on. So what I was gonna do is I'm just gonna very briefly wrap up. I think it was very interesting. I'm sure many people, many companies, Western foreign investors here in the room will be very pleased to hear Minister Zhang say that China wants more opening, not less, especially in the current environment. I thought Mr. Deripaska had a very fascinating suggestion to China, to asking Beijing to consider maybe importing more energy from Russia. Madam Zhang, I thought it was very helpful, very interesting on talking about how companies are upgrading themselves and to meet many of the challenges facing China faces. Lord Turner, what really struck me is how you pointed out that China can and must change its growth model in order to save the environment and save the world. And I found Professor Ma, I thought your point about the changing cost of energy and how that is gonna shift the equation. I thought that was one thing that really stuck with me amongst many things. Now I'd really like to invite Olivier Schwab up to the stage. Olivier Schwab is the executive director for Greater China of the World Economic Forum and he's going to present the awards I mentioned before to China's new globalizing companies. So Olivier, thanks very much. Thank you. Ladies and gentlemen, good afternoon. As China continues to grow, this will be driven by young and innovative companies and it's likely that within 10 years from now, China will have more large multinationals than North America or Europe. And the World Economic Forum today would like to recognize some of these young and innovative corporations which have the potential of being the multinationals of tomorrow. They've been selected by committee of academics, media leaders, and business leaders. And I'd like to welcome them to the stage and congratulate them. Mr. Sui Weixin from Dipon Logistics. Mr. Yu Chuan Fun, president of Guangxi Liu Long Machinery. Executive president Liu Min of Hunter G. Holding Group. Mr. Zheng Hanyan, chairman and chief brand builder of Platino Hotels Group, who unfortunately had a flight delay. He will not be joining us. Mr. Hou Juncheng, chairman, Pro-Yakosmetics. Mr. Zhang Zhaizhong, president, Shandong High Tech Chemicals Group. Chairman of the board, Gao Zemin, Shenzhen Energy Group. Chairman Chen Chenghui, Wow Prime. And president Xiang Fang, Yuantong Express. Maybe I'll invite the panelists for a group picture together with the award winners. Just gathering. How you?