 It's my great pleasure to introduce Professor Kiryu Jin, Professor of Economics from the London School of Economics as well as Professor Xiaolong Fu, Professor of Technology and International Development from the University of Oxford. Now they will both present their horizon scan which they focused very much on the future trends for China and we'll hear from both of them as we start the session and then we'll get into a bit of a discussion so do feel free to start thinking about your questions and come in to the discussion as we move into the second part of the discussion. So with that without further ado over to you Professor Kiryu Jin. Thank you so much Stefan, good morning everybody so nice to be with everyone. So as we look into the future in China it's probably safe to say that China has entered a new paradigm, a new model of growth, saying goodbye to smokestack industries, over-reliance on investment and exports and welcoming a new era based on sustainable growth, technology and innovation. And in this new era GDP growth is no longer the sole developmental goal but there will be more demands for a softer metric of development such as raising standards of living, better environment, food security and safety and stability etc. So the shift from just growth to something that has a broader spectrum represents a broader spectrum I believe is a goal very important near-term goal for China especially in a world where inequality is rising, there's disenchantment of the new generation, there's new complaints about free-willing capitalism, each nation is debating these key issues. And how does, how would China get there? In the meantime China has fostered a very unique model. We usually think about China as having a pretty centralized approach, a very dominant role of the state. But in fact that is also under, kind of under emphasizing the huge amount of autonomy that's passed down to the local officials. China actually has a very decentralized economic model, not a political centralization but economic decentralization, and there's a huge amount of vivacity and creativity on the ground aided by local officials. If you look at the unicorn second to the number in the United States in China it's distributed geographically all over China in places where many of you have not visited or even heard of, second-tier cities such as Hefei, Shuchou, Wuhan and all these amazing cities and how did they create kind of this kind of level of innovation. It's that very unique model of local entrepreneurship married to local officials enabling them to create supply chains, coordinate the finance, helping business to overcome key barriers. Just think about the EV sector, this renewable, the renewable sector where China is now leading in a matter of 10 years. How did that happen? Well part of it is the government installed four million EV charger stations around the country as opposed to 140,000 in the US. So that role of the government in a very nuanced different way and all these mechanisms is very much what defines China's unique capitalist model which is what we call the state and the mayor economy. A third trend is of course the rising let's let's say competition and technology that has got to be a key theme. In the past we talked a lot about trade and investment but in the new era the race to dominate key technological sectors is very much a very important trend that will spill over to all over the economy but I like to think about it as competitive collaboration. This is especially true in the in the greenfield sectors where you know Chinese battery makers are really world-leading and they're building factories in Germany and American and Japanese companies are investing in Chinese companies so that they can learn and bring the technologies to a bigger market and that is that kind of competitiveness competition is actually what spurs technology forward. We often forget that we think about rivalry as something that's potentially has negative implications but in fact that's what keeps technology frontier being pushed further and beyond. If you think about the US versus Japan in the 1980s the semiconductors race as a result we all have cheaper and better chips products consumer products so that will be a defining moment but just to just to say that the technology race and how China will endeavor to achieve that innovative goals will also be very much revolved around the growth model the decentralized economic model and now the very interesting part of the Chinese economy I believe will be the new generation a radically different generation that has grown up relatively privileged and prosperous and especially confident very different from the past generations that I've seen so much vicissitudes in China through this turbulent era. The new generation has a knack for lifestyle consumption likes to borrow even beyond their means they like to consume they like to spend they have busy lifestyles their cosmopolitan many of them have traveled abroad many of them have studied abroad they also represent a very positive force connecting China and the rest of the world in the new era as many many international surveys show they're very open-minded they care about social values ranging from environment to equity to you know far-flung animal rights in Africa many many surveys show that they care about diversity and that kind of values converge with the new generation of the rest of the world. The new generation of course like the new generation every part of the world also has their own challenges in an era where the opportunities are not as plentiful as the previous generations and they're facing their own challenges of diminished expectations so how to harness that new generation that positive force is a very important goal that I think will have a very positive influence on the world thank you let me stop there thank you good morning everyone thanks Stephen and also thanks the forum for giving me the opportunity to share my horizon sky scan for the China's future scan in the next few years I'm a professor of technology and the international development at the University of Oxford and I'm also now a new social entrepreneur as the founder of ox value dot AI I think China's future economic growth at the current stage is at a critical transformational is at a critical future kind of transformational stage of its development and despite there are a lot of significant challenges for China's economic growth innovation and modernization is likely to be the major driver for China's next wave of economic growth and so the next few years we are going to see a transitional period changing gears transition period firstly let's look at China's innovation and we will see a evolution of China's innovation model and a new model is on the horizon China's innovation has benefited greatly from an open national innovation system however following the tensions in your political tension and also all the painful sanctions China's innovation model will evolve evolve to a model that the state and the domestic players will play a larger role the speed and the quality of innovation may be affected in this new model however innovation and the diffusion of innovations will be deeper and the wider you know for the country as a whole and also this geopolitical tension and the other multiple global crisis is likely to persist in the next few years and as a result very costly regionalization and the diversification of the global value chain will continue although at a slow pace at a slower pace in addition to these external challenges China also face faces domestic challenges especially significant use unemployment economic slowdown and also rattled business confidence so all these will be challenges for the Chinese government and the China's modernization need a more effective policy and the and the strategies to make it you know more effective it is the best of times and it is also it is the worst of times and it is also the best of times despite of the challenges there are also many opportunities in particular a GPT led technological revolution and also the green transformation in China which will open new green windows of opportunity so in China the green transformation underlined by a government kind of long-term goal to reach carbon neutrality by 2060 it's likely to be the one of the most important long-term trend for China although sometimes you know it may be obscured by some short-term distractions this will be one of the most important long-term trend for China secondly we know nowadays in the world and in China there is a GPT generative pre-trend trend transformer this new technology led digital or technological revolution and this technology revolution will provide huge potentials China has world-class digital infrastructure infrastructure but and also very strong digital skills among the labor force therefore China is likely to benefit from this digital revolution not only because there are kind of new jobs created and the new industries are provided and also there are huge efficiency gains and of course a company to this digital revolution there will be you know other social important social implications including employment opportunities in the traditional sector increased income inequality and also multiple ethical challenges in addition to these opportunities and and the challenges the next a few years we're going to see a reconnect revitalization and also confidence building period so we will see a reconnection and the revitalization of the Chinese economy and also a confidence building you know among the companies investors and consumers we know after the pendant COVID-19 pandemic people's working behavior people's consume consuming behavior also changed not only you know among the young generation as Kerry has explained but also in the wide society in the wide society so this will be a very important transition period therefore looking China's future growth paths we're going to see a double kind of ace-shaped curve instead of a single ace-shaped curve to create this second curve second growth curve innovation and modernization are likely to play a major role and so the years ahead in the next few years we're going to see a transition changing gear in changing gears a transition period and how long does it take will depend on to what extent and the how quickly China can be transformed into an innovation economy so there will be this transition period precede a faster economic growth and this period may be important gradual buying kind of a time for long-term investment that's all from me thank you well thank you very much for these two overviews and and before opening up to bring all of you into this I just would like to tie together a couple of the points that you both made I mean you both touched upon the importance of course of innovation you talked about the technology race and how China may position itself as a innovation leader in that in that space and of course you you brought up importantly that perspective of innovation now where do you see maybe both of you could could comment on that where you see the biggest momentum the biggest opportunities for that innovation ecosystem to to evolve in the coming years I don't know career do you want to do you want to start with that well there's a difference between technological mastery of technological applications high-tech and breakthrough groundbreaking technologies and I think China's money talent and market positions of very self-to-do very well in the first two but the real challenge is groundbreaking technologies and that requires a lot from the civil society a patient nation patient people with patient capital basic research an intrinsic motivation of curiosity rather than extrinsically driven by profits and returns that's a transition that China will have to slowly embark on before it can make groundbreaking technologies but I'm more confident on mastery of high-tech and of course the many applications I think China's innovation ecosystem and the national innovation system is evolving and also building up its capability according to the world's intellectual property organization China's innovation index kind of ranking raised from number 32 in 10 years ago to number 11 last year and also in China I think the next few years we will see on the one hand diffusionary innovation will you know a greatly spread into in the country following this transition and also following the development of indigenous independent innovation capacity and at the same time groundbreaking innovation is one of the bottleneck has been for China for many years and I think China is building up this capacity looking at China's publication in science engineering and medical science is building up and the contribute to the world kind of knowledge base and that's a very important contribution China is making and is in the kind of fostering stage and we will see after this gradual change of breakthrough in breakthrough fundamental innovation from China fascinating yeah and then both of you also in that context touched upon the importance of the young generation right in terms of the consumers and the new generation that you touched upon but also then their role in the challenges of transformation and building this new innovation model when we survey and you touched upon this when we survey young people globally we have a community of global shapers some of you may be here in the room we also see that that conversions around some key themes and concerns in that in that generation particularly around sustainability but how do you see that reflected in in that role of the new generation in China and facilitating that transition do you want to start with that I think that the young people they are the future of the world and also in China and they you know elsewhere like in the United Nations I also see earlier in the science technology innovation forum of the United Nations I see how young people are proposing new agenda and the pushing for challenge changes and they in the in China and in Oxford the students my own students they are the major force you know pushing forward changes in curriculums and also in our research bring a lot of attention to sustainable development to biodiversity to labor standards etc so they are really raising the awareness and also driving the change in the world so I am very confident like in China with this new generation they are they are very different from my generation they have global vision they are very well educated no matter whether they have educated abroad or there's the ground up educated educated in China internet and the open country the open economy has given them that exposure about how world is rapid changing and they are now bring up their voices you know pushing changes especially societal changes environmental sustainable development and could you that's really a central theme also in your new book right the new China playbook that you just released of the the role of that that new generation can you just maybe elaborate and comment on what what Shaolan just they represent a radical break from the past no generational gap as deep as the one we are seeing today in China so anybody who wants to understand China work with China work in China connect with China has to understand the met mindset and the psyche of the new generation radically different just look at the the the kind of experience they have gone through compared to their parents so in the heavily very confident and their sense of pride pride of China the nation what it's accomplished innovation and a sense of you know sense of wanting to be part of the community so also part of identity seeking individualism they are the one generation again a radical break from the past so I think all that these social issues their vitality are really important they're also more relaxed you know some people would call that lying flat somebody will call it you know just chill but you know but they they they I think it's not it's not a bad thing necessarily there are no longer the Foxconn workers that would opt for three shifts a night that define China as it joined the WTO this is a new generation unwilling sometimes to take up the manual labor more confident of their education and their abilities and innovativeness and so striving for more and that's just a cycle of renewal that these kind of jobs that kind of opportunities get passed down to other countries and you know even despite the rise of AI it's it's that cycle and they will represent a new future for China so have to understand what they stand for but also have to harness their their their positivity but they're currently challenged by the economic conditions excellent so we can maybe afterwards talk about how we best understand that generation if that's what we need to to understand China's future trends but I want to open it to to all of you come in with your comments questions yes I'll collect a couple of questions but let me start here and in the first row and please quickly introduce yourself and I'm from Jinxolo we are a renewable energy company so my question is to a professor food and the future you describe it is so promising and optimistic but why more and more Chinese entrepreneur owners particularly small and the media entrepreneurs they are getting more anxious and worried about the future they what they see is the less opportunity and the slow pace of growth and the increasing pressure from carbon emission net zero growth etc so you know I'm are I'm from the renewable and I'm from solar so I think we are we are the big winner of this sustainable era but how the how about the majority of business what's the future for a means for them and if look that this fix this future is fix the trend and how they adapt themselves to this trend this is a question to that to miss to professor fool and then my question to professor Jin and they're regarding to the innovation so you know what you mean the innovation is referred to their AI or the sustainable EV or storage of this kind of new business but you know that the 90% is the traditional industries like the steel or paper blah blah blah and manufacturing others so what the innovation for them we to focus the innovation refer to their like their new technology AI or internet or kind of things but what for the majority of business what an innovation for them what they can do you mean they ship the their business to AI oh great thank you thank you very much for those two questions let me collect maybe one one more yes gentlemen in the back in the very back row yes and then I'll let you answer but first judgment in the back I think thank you very much my name is Bharat I represent Indian technology company great session thank you very much building on the lady I just mentioned the declining birth rate seriously making an impact on the real estate you know in terms of new housing sales impact the new work culture impacting the commercial real estate the declining commercial and residential real estate impacting steel industry and cement huge capacities not being able to fulfill and the divide between tier one and tier two within the China city ecosystem could you just talk a little bit about that and see how that shipping out in the coming five ten years thank you all right great I think we have a theme here about how this transition plays out across the economy and tier one tier two two minutes each who wants to start okay you know small and medium companies very very very challenging and very challenging in China and adding to your list is the cost of capital and this has to do with the Chinese financial system layers and layers of cost of capital added down when it trickles to the real economy the burden for the companies are very large I have to say that we have to believe in some forces of the market playing a very important role I talked about the role of the state very critical but in China's stage today it should be efficiently allocated by the market so when there there's an influx of too much capital into one sector and oversupply that the market should be self-correct and that I think was one of the painful lessons of this industrialization period and going forward more markets less state but the state is being still still very critical on the fertility very very important question you got to ask why are people having so few children right why are they not even getting married is it be maybe it's because of the housing prices and so the causation of correlation is you know is going in both directions and I think this is one of the focus of the new paradigm the kind of focusing on people's well-being and feeling less angst and social anxiety in the age of AI but in China in the you know reduced opportunities so this is something that the government is trying to solve over time I think very difficult but they're putting maximal efforts I think you pointed out a very important continued developmental kind of force in China which is urbanization this is not so much between first and second tier cities I think the biggest gap is second and third and fourth fifth tier cities so urbanization is only about halfway done so that's one pent up demand for housing prices still you everybody wants an apartment in the urban areas and that geographical inequality is actually the biggest source of inequality in a place like China rather than compared to the US and Europe and other countries so again the right kind of policies will be to allow for better migration across sectors across countries are across regions and better flow of goods there's still a lot of distortions and again that is also focal point of the government but that's going to take ten years to play out great thank you shout out I think two three very good questions I start from innovation innovation actually there are groundbreaking innovation and they are also diffusionary imitative innovation so this type of innovation not on maybe not new to the world but new to the country new to your firm new to your region so this also innovation so in terms of when we talk about innovation in the traditional industry that could be in you know enhance your efficiency enhance your productivity and reduce the cost but also there could be new industries like the AI world that's one but in traditional industry there could be you know better quality new products in your in your traditional industry and better quality great efficiency and also there are two major trend digital transformation and the green transformation all this will require innovation to achieve so these are all the opportunities for the traditional industries to innovate not necessarily everybody have to go to the all the AI industries but in your own industry and the do this become the number one or the top ten in the world in your own industry is also innovation that need a lot of innovation and now comes to you know what's the current situation in China China come to the you know the kind of top of the first growth curve and it's preparing the second growth curve this is a very important transition period and this was added by the post pandemic recovery short shock of the pandemic COVID-19 pandemic so all these together make the current time is very difficult however as for me I was born in the 1960s I worked until my 32 years old I went abroad so in my life in China in the past 40 years I have seen economic crisis or some political difficult times I've seen inflation rates higher than two digits and this the country went through went through all these difficulties and the currently is the two cycles come together the long economic cycle transition and the pandemic shock recovery add up together however the hope is the future is one China build up the innovation capacity and the go through the digital transformation and the green transformation and other innovations the country will pick up its capacity so look at the world in comparison it's a difficult time for every country difficult time for every country but I think we will all go through now look at China's kind of the young generation in and also the societal challenges I think for the young generation you know why they don't want to have more children even the government changed their policy it's a comprehensive social problem come together it's not that only a one child policy issue it's also about the privatization of education privatization of health care and the incoming equality in the society the majority you know the wealth the economic growth and the gains goes to a small proportion of very rich all these all come together led to the majority of the people they feel much more burdened and the young generation don't want to have a children because of the burden and the people save a lot to prepare for health care and education so it's a comprehensive social change needed so that's why the Chinese modernization five characteristics bring up all together to change the society and the economy I think that's the right direction although it takes time takes time for the whole system change right well thank you very much in many ways that was meant as a kickoff of many discussions to be had over this annual meeting of the new champions thank you very much to the speakers thank you very productive and impactful meeting thank you very much