 We are ready to begin. Chinese companies are on a spending spree. More than 36 years ago, China opened its economy to the world. And now, for the first time in its history, China's overseas investments are on the brink of surpassing foreign direct investment. A role reversal on a global scale. Overseas Chinese investment is on track to exceed 120 billion US dollars. Beijing's support with its decreased regulations and a slowing domestic economy are helping to fuel investments from Africa to the United States. The tradition of Chinese state-owned companies investing in energy is shifting as more private players are putting their money into the likes of real estate and technology. China's investments are bringing new opportunities but are also delivering challenges, political risks, legal barriers and cultural misunderstandings. So as Chinese companies continue to pursue acquisitions overseas, what is China's impact as a global investor? Welcome to the Sai Xin debate from Davos. Ladies and gentlemen, it's great to see all of you here sharing our interest in such a fascinating question. China's impact as a global investor. I'm Houshul Li, editor of Sai Xin Media. Sai Xin is a powerful financial news organization in China offering content across a range of platforms. Video, digital and print. We are well-known for being passionate champions of journalism and we want to be a bridge between China and the world. We will be using today's debate on all of our platforms. Our primary language is Mandarin. So please take out your headsets as I will switch to Chinese. We know internationalization of Chinese companies is secular-rating at the APEC meeting last year. The leaders of China said that in the next ten years we would invest 1.5 trillion US dollars. We know this is not a new topic but it's heating up. So what are the challenges? At the end, what will be the impact of that investment on the rest of the world? Those are the subjects for today. In other words, we are looking forward towards a new situation. I would like to do in three parts. The first part is where are we now? What are the priorities and trends? The second part is challenges we are facing but of course opportunities as well. The third part is the impact on industrial structures of destination countries. Let me introduce my panelists today. Perhaps I can start from the left. Mr. Cai Jingyong, he is CEO of International Finance Corporation, an expert. Three years ago he was CEO of IFC and has been since then. He travels between US and many developing countries. He has his fingers on the pulse of our Chinese overseas investment. Let me start with then Chinese panelists. Mr. Lin Yi-Fu, he is a leading economist. He used to be chief economist of the World Bank. Now he is a professor at Beijing University. Dong Mingzhu, she is chairman of GERLIT. GERLIT is one of the leading white appliances manufacturers in China. It is biggest also in the world of white appliances manufacturing. She is a representative of Chinese companies here. Next is Minister of Trade and Industry of South Africa, Rob Davies. 2014 was the South Africa year in China. And they did the year of China. South Africa welcomes Chinese investment to help their economy succeed in its transition. So we look forward to hearing his views. The next speaker is Bob Diamond, ex-CEO of the Barclays Bank. He is now working at a merchant capital. He founded the company and is the CEO. He will be talking about Chinese investment overseas from a practitioner's point of view. We know they have very large investment in Africa. The last, but not the least, perhaps the many Chinese audience know about him. He is a Francisco consulate. He is CEO of Mexican Trade and Investment Promotion Association. This is a trade promotion organization he works for. He is a professor of finance. He used to be commercial councillor in China. And I'm battered off Mexico to Germany. Clearly he's an expert in international economics. Now let's start. The first round of questions will be focused around the fact that the Chinese companies are accelerating in their investment. So where are they now? We know this is not a new subject. But it is at a new stage because earlier China focused on developing countries to develop these markets. Now the focus is shifting towards the developed countries. Is this a new trend? I would like also to know what is special about this new trend. Perhaps we could start from Mr Tsai Jin Yong. Then we will speak in touch. Indeed this is a new trend in China that is known as going out of China, going global. At an early stage it was focusing on oil and minerals. The change is that investment is now going into developed countries, even in developing countries. There are different models of investment. This is a reflection of the gradually more mature economy in China. And Chinese brands are becoming more attractive. Given that there are many opportunities for Chinese companies as well as challenges. I'm sure we'll talk about those. But what I'm focusing on is the developing countries, particularly in Africa. There has been Chinese investment playing a major role. Causing controversies too. Our friend from Mexico, perhaps you could tell us what you think. Thank you very much. I can tell you that we see in Mexico really a very fast change in the way China is investing. At the very beginning there was the raw material, as you said, and it was mostly in South America. After that China moved to the infrastructure and also to the manufacturing, buying existing companies abroad. And what we see now in Mexico are Chinese companies with Chinese trademarks investing in Mexico so they can expand the market in the NAFTA area and in Latin America. Then we have seen these four stages of the Chinese investment. Also very much with what said the global and corporate governance. And this is a really nice way of dealing in this new way that China invests. Okay, thank you. Mingzhu, can you tell me about the earliest investment in Brazil? You are the earliest investing in Brazil, starting at the beginning of the century and perhaps the year before you set up manufacturing facilities in the U.S. and also you're going to Vietnam. I'm just wondering why you have moved around like this. What is your particular experience? Well, in Brazil we had a market there. There was demand. Our positioning was to sell our own brands. So we sell domestic appliances. For 10 years running we are number one in sales around the world. But it's still domestic appliances. But through our own research we have new products. Our range of products has been broadened not just domestic but also commercial appliances now. These are proprietary development. Therefore our technology is already showing better properties. So we want to serve the rest of the world with technology. So our plant was shut down after three years. Because of the investment environment to us we do need to consider risk. The reason we withdrew was because the risk was beyond our control. In Europe we are considering setting up manufacturing facilities. It's not simply to put on our label there what is more important is to grow with the local economy. We have the capacity and capability now because what we bring to other countries now is technology for example central refrigeration system or air conditioning system. We do not use electricity but we use photovoltaic power, heat, wind. We use new energy to power central air conditioning system now. And therefore with new advanced technology we are already a step ahead of our competitors. It's no longer like in the past when we were just investing to produce but we are now servicing now. In other words you feel that there are opportunities even in developed markets. Yes indeed in the US we sell gris as a brand. It's well recognised. Lin Yi Fu, I'm keen to hear your views. Chinese investment overseas traditionally has been of three types. One is for resources because China is a fast developing country and does not have enough resources itself. Secondly infrastructure because China has competitive advantage developing countries or need infrastructure. The third is to enter the local markets. Investing locally you'll be able to overcome tariff barriers. But these three types are all mutually beneficial. Looking ahead I think there are two new increasingly more important types of overseas investment. One is to go into developed countries to acquire technology. China needs to continue to develop it needs technology innovation and upgrading. In many industries we are still behind compared with developed countries. Overseas acquisition or acquisition of patents will help us to accelerate our own technology. We know developed countries will welcome that too since the crisis of 2008 economy has been struggling therefore developed countries welcome foreign direct investment including from China including investment acquiring technology. Apart from that I would like to highlight one more thing. The labour intensive industries in China are now under pressure from increased cost of labour rather like the 60s in Japan when it moved its manufacturing to Asian countries creating the four tigers. Great. In the 80s the four tigers moved their manufacturing to China that's helped China to become the manufacturing plant of the world in the last 30 years. Now China is reaching the stage Japan did in the 60s and the four tigers in the 80s because the cost of labour is increasing very fast in China. Labour intensive industries in China are now real under real pressure to move out of China. I would like to say that this is a very good thing for other developing countries. This will increase their employment, export and income. It's a great opportunity. On that if you look at the trend Japan in the 60s Asian tigers in the 80s have all gone through this period but there's a difference in quantity. In the 60s the manufacturing sector in Japan employed 9.7 million people. In the 1980s the careers the total employment is 2.3 million and now the Chinese total employment according to the third issue of the economy is 12 billion. So I think this is 12 times than those countries seen before. So very possibly in the labour intensive industries when it's shifted to developing countries it will have a new wave of the industrialization and this will be a win-win situation and that is very encouraging. So what's the opinion of the Minister Davis? Thank you very much. Thanks for the opportunity. I think I should say that from a South African point of view since 2008 China has been our largest trading partner both for exports and imports but the investment relationship is still one where China is behind OECD countries and even countries like India have a larger quantum of foreign direct investment and even actually at this moment in time the value of South African investment in China is larger than the value of Chinese investment in South Africa although there are more Chinese companies involved in South Africa than there are South African companies involved in China but we are seeing a very important structural change and I think that is a change that we've been working energetically with the Chinese government with the Chinese private sector to bring about and it is the one that I think has been described here a lot of the investment in the earlier period was around extractive industries, mining projects and things of that sort there was one significant exception one of the largest foreign investments by China at the time was a joint venture with the South African Bank also to finance Chinese projects on the African continent but now we see a number of Chinese companies actually investing in manufacturing foreign direct investment bringing in their own brands I think one of the high water marks was the opening last year of the first auto works plant automotive products there's another Beijing auto works plant as well we see in the Chinese television manufacturing there's quite a significant presence in manufacturing of products for the green economy particularly energy generation and energy saving projects and I think that all of this does indicate that there is a change in the pattern and I think this qualitative change is what we want to see because as China itself is making structural changes in the economy and I think Justin Lim was alluding to that just now as China is focusing on the quality of growth is moving towards inclusive growth so is the African continent and a critical element of that is that we need to occupy a much more space of value addition and industrialization so I think that's something which we see and something which we're welcoming and something which we are working energetically with our partners in China to promote okay Bob your turn can I tell some so we're a New York based investor we're focused on financial services and what I've seen in the last year in China has been remarkable to me prior to the financial crisis and in my time at Barclays we would see small investments small shareholding in western banks from many of the sovereign wealth funds and others in China now it's very very direct it's very targeted there's a new confidence I've been in Beijing and Shanghai four times this year in the entrepreneurial spirit to develop a capital market of private equities hedge funds venture capital so one of our businesses that we've invested in is a financial technology company in an asset management platform and one of the large financial institutions instead of just investing in our building it invested but also has done a memorandum of understanding with us where we're doing a joint venture to develop the asset management local business in China that's amazing for us to have that access to the domestic market and it means that the Chinese financial institution is bringing in technology and expertise to build their domestic business one of the largest banks in China also was our one of our key strategic investors in Atlas Mara which is our integrated bank in Africa what was interesting about this is it wasn't really an investment in Africa we raised equity and it's on the LSE so it's on the big board in London so it was actually an investment through the London Stock Exchange but giving them access to banking in Africa and finally we're beginning to see an interest from a variety of investors in China to work with us to invest directly in Europe where so many of the financial institutions in Europe are spinning off non-core businesses and non-core assets so it's a very very different environment than it was five or six years ago so thank you very much for it and we have heard the the hopes and visions on China's investment abroad so the next question will be what are the challenges there is especially for Minister Davis and the Africa will be the peak of the next growth but there are diversities in African countries and be it a Chinese company or any company from anywhere in the world what do they need to meet the challenges and what do they pay attention to well thank you very much I really started to mention what I think is the common challenge of the African continent I think the recent oil price shift is simply meaning that oil producing countries are following what many of the rest of us who are involved in the export of other primary mineral products faced a few years ago and that is that the super prices are no longer with us if I move up the value chain what we've got I think compared to China is that China had the great advantage of colonialism not dividing it into 54 different countries which was the fate of the African continent and so our domestic markets are all too small to support on their own or even to contribute significantly to the size of the domestic market that can support and sustain industrial diversification and industrialization so we're embarked on some very ambitious regional integration programs essentially seeking to broaden integration across our existing regional communities create large markets across the African continent but also to address a very very significant infrastructure deficit the infrastructure deficit exists in particular in infrastructure that links up our economies one to another in fact Donald Kabaruka of the African Development Bank he said that infrastructure deficit is costing our continent equivalent of 2% growth and so one of the areas where we've been working very strongly through the BRICS framework is the BRICS New Development Bank which will now be launched with its headquarters in Shanghai but the first regional branch office will be located in Johannesburg to serve the African continent and we think that there is a way in which the contributions coming from the BRICS countries and I think this is very much part of the trend as China being one of the most important BRICS countries where capital can now find an outlet in productive investments in infrastructure development and so on now I think you're asking another question we have different legal regimes in place we have different ways in which we work with foreign investors and so on and so forth but I think what you will see is increasingly that the environment is being made more attractive to foreign investors across the board and what I think investors across the board including investors from China need to realise is that many investors are finding that the rewards way out outrun the risks it's very well worth while looking at the African continent and many I think strategic investors have found that the African continent is indeed the next growth frontier so I think that all of those are things that we are doing to enhance the significance of the African continent and I think we do see Chinese investors among those who are responding I think one of the things that we have said and what I was coming in earlier is we do see a greater resonance perhaps in our engagements with China in understanding our ambitions and our development trajectories and I think that's what we really need to build on and I think that could give China a very significant role in the future of the development and industrialisation of the African continent It's very encouraging and exciting and I think that you mentioned about BRICS Development Bank while we see the complexity of the African continent and the political eco is also very complicated and if we play the card of government and there will be risks and so you mentioned the international cooperation in terms of BRICS and apart from that what will be our guarantee to guarantee the success and I think that this is a very good subject to discuss and when China goes out to invest it's all mostly is led by the technology companies and together with the government and one of the Chinese companies characteristics is that they bring about the way they work the method from China and they think that it will work in Africa but this is a good thing but we should find out that the project the completion of the project is important but what's more important is that we need to get the value that we invested in that project and this should pay attention to this and it's not the end of the job after you've completed the project but also you need to make profit and to get back what you invested you have invested and also in addition you need to minimize the political risks by making the benefits going to the local people so the common interests should be established with the local people and in this area there are lots of opportunities so we should establish partnership and it's not that you'll reap all the benefits on your own so any any project there will be risks so the investment means you'll carry out the project and also you should make this project a good project and the Chinese government is a strong government so they could the government can help to resolve many of the problems in the process of carrying out projects in other foreign countries that might not be the case and secondly when you make an investment for Chinese for abroad and it's now termed the end of the job after you've completed the project and the cost of the Chinese project is rather low but one should think of the whole lifetime of your products and you should think of the the benefit that you would give to the local community so in this way you can become popular among the local population and the vast there will be minimized the political risk so when you talk about the partnership you think of the relationship between the Chinese enterprises with the local people but what are the Chinese government relationship between the Chinese enterprises and other companies so I would like to know that the outbound the Chinese investment how do we establish this partnership with the local countries and what are your experiences in this field so I think we've talked a little bit about Africa talking a little bit more about Africa and if you think about financial services and the opportunity for the Chinese banks to expand into Africa one way would be to just become more global to build bricks and mortar in branches institutions in China they are very cautious about that so they followed a pattern primarily which is following their customers so the Chinese banks are doing a lot of business in Africa with Chinese companies but they haven't expanded beyond that so the first case was one of the big banks now owns 20% of standard bank so they have a big stake in one of the banks there more about banking in Africa before they expand too far away from the Chinese companies that's very similar to what one of the big banks our strategic investor is doing with us by being a strategic investor in us through London they're learning more about how to run banks on the ground rather than jumping too quickly from a Beijing based or Chinese based bank into Africa to Robert's point they're 46 different countries 46 different currencies now it's changing there's really four key trading blocks so these are the things that they need to learn and I think what's smart about the investment that the Chinese banks are making in Africa is they're beginning by following their customers customers they know customers they're comfortable lending to and doing business with and they're just beginning that next stage which is investing in domestic banks thank you China is the third largest FDI sources in the future it will be even bigger for Chinese companies the biggest challenge is psychological preparation and talent preparation are far from sufficient 5 to 10 years ago China was talking about how to attract investment suddenly China has become a net investor overseas now companies now can't survive now unless the investor overseas to give you a specific example I visited a labor intensive base Guangdong province Fujian province Jiangsu and Shandong you'll be able to see labor intensive manufacturers started in the 80s with investment from Taiwan and Hong Kong and most of that has already gone but indigenous companies find that the profit margin is coming down it's difficult to employ people they want to go out of China but they're scared because the change of environment is happening too fast ministers have said this already there are 54 countries in Africa they are all slightly different and we as labor intensive manufacturers we used to receive orders we don't really know what's going on outside China now you are telling them to move out to China completely that's a big challenge I think Chinese companies well the governments said already leverage resources domestically and internationally and markets domestically and internationally but we haven't got people to do it this is a major barrier can I just ask you about this then Chinese companies are still thinking about how to invest overseas foreign countries probably think about investment so is it the multinational companies should Chinese companies restructure themselves to become a multinational company it's not just a Chinese company it's a transnational company is that a stage of process well I think it's a question of mentality how do you define multinational company you are a labor intensive company even if they are Chinese-owned if they go to India or Africa or Latin America it's not going to be a multinational company we are talking about big group of companies they have a whole value chain both in their own countries and globally in technology in finance it's essentially managed so this is a different kind of multinational looking ahead it's not going to be the model for Chinese companies just yet but irrespective of that if you want to invest overseas you have to understand the local culture political context legal context and the risks and there is an issue of language too we are doing it in a hurry perhaps not like Greece you have prepared well I think you have prepared well I just like to share my view with you I think being global how can you become an international company one thing is talent the second thing is I think the mindset needs to be different we need to think about mutual benefit you shouldn't just think about how to make money by setting up a factory you need to bring with you technology indeed cost control quality about many other things made in China often gives people the impression it's a low quality product it's not a high quality product that is perhaps the perception we need to change I'm from manufacturing we are in the US in Europe we are thinking very hard how do we set up a factory what factory to set up if it's just processing plant it's no good it's got to be something that can work locally with local economies and therefore you need to bring technology quality, management so for me it's much more important to bring your culture a mutually beneficial culture so that people will accept you there are big risks in Brazil we've been there for 15 years for the first 10 years we almost gave up plus we talk about corruption in China China is not alone and pretty bad elsewhere too we can't control finance whatever company you set you do with a company if a company is not profitable then your company has no value so it's not just price competition there are other things to do well so first thing is we need to know it's got to be mutually beneficial for this many years China is perhaps the best FDI destination but when we go to other countries we feel quite strongly perhaps it's because of our culture clashes with theirs but very often if you really want to have a very transparent operation that's a hard we have a challenge there I can understand that excellent I think the impact cannot be ignored so perhaps we can ask Mr. Gonzalez to talk about the most Mexican situation sure thank you very much I want to bring again Latin America to the discussion I will start with common understanding with global value chain you said that the minister said common understanding is important of course this is the first step in this sense you should start with the political assessment and this happened between Mexico and China two years ago President Xi Jinping and President Peña Nieto met and started a roadmap to review all the things needed to have a really strong relationship two weeks ago many presidents of Latin America met just President Xi Jinping at the Celac China meeting and also to set the whole roadway to review what's needed to have a very strong relation after that starting of common understanding I have to say language is of course a barrier but common understanding goes far beyond the language laws are different of course but rules of business are the same rules of business are stable between Latin America and China and in this sense what is needed to do real business between both areas you said of course we need the financials currency Latin American currency China currency that's needed that banks in our area and Mexican banks or Latin American banks also in China we just announced that ICBC started operations in Mexico a few months ago this is very important also that you can handle all the money that flows from one country to the other also very important to this part of engagement is to have solid funds China and Mexico are managing a fund managed by IFC thank you very much and precisely the idea is to enhance the way small and medium-sized businesses can come to Mexico and also go to China to have business professor you said that it was very hard to change the mind to change the way you started being one of the FDI incoming and now you have to go and invest the same happens to Mexico and this is part of the understanding we were also very interested in investing in Mexico of course we're interested in China investing in Mexico still but the idea is that we have also this change of mindset we are also investing in China and this part of the common understanding is very interesting so you can have the idea in which areas we are in in Latin America and in Mexico and what how we can enhance business of both areas and in this part is the enhancement is the most important one and it's the personal one and you can help me with one she and Mian's thank you relationship and networking is very important and that's what we're doing in this moment I traveled eight times past year to China I had also my counterparts coming to Mexico but also with about 500 entrepreneurs going to China, coming to Mexico and also to all the region to know each other and how they can work and really the mindset is very similar I said language is different but not only the part of the Mian's you can have a face-to-face meeting that you can know the people that you can eat their food this is something that's very important to go through and in this direction Latin America and China are working very good together not stopping that it's the last the global value chain at the moment the imports of Mexico of Chinese goods is mainly materials we use to build home appliances and cars and the new Chinese investment coming to Mexico is precisely not importing that part but manufacturing those parts in Mexico and integrating a real value chain between China, Mexico and rest of the world thank you let's turn to the impact of a Chinese investment on the world Mr. Yi Fu in the 80s American companies were shocked by Chinese investment coming over now you are talking about the scale of Chinese overseas investment it's quite strategic that will have a big impact on the world, won't it could you elaborate on that so with a view to considering what happened in Japan what will be the major impact next I think I said Chinese investment overseas is an economic activity based on the law of economics and therefore Chinese investment will be beneficial also to destination countries that's a very important principle whether it's Africa or Latin America a lot of that at the moment is into resources basis of economics and the market principles the countries with resources receiving Chinese investment benefits from such investment for example in the last 10 years of the fastest developing countries 7 are in Africa if you look at those 7 many of them are resource intensive of their development is linked to investment from China that investment brings finance and GDP growth the second thing is investment into infrastructure developing countries have a big issue in their development and that is the bottleneck of infrastructure without it trading cost will be high some industries are very good in industry trading cost is very important whether it's China or South East Asia or Africa investment into infrastructure is China's strength but it brings benefits to Africa this also brings local employment providing better products with technology content this is good for the value chain of local economy too so the two trends one is going to developed countries in order to acquire technology we know in 2008 developed countries suffered recession many countries with technology face bankruptcy because of the overall economic environment that's a great opportunity for Chinese companies to go and acquire these companies turning companies about to be out of the game into a good company so China also benefits it acquires technology speeds up its own technology upgrading and also investment into labor intensive industries I'd just like to highlight that since the industrial revolution we've seen 250 years and barring a few oil and resource big countries any country that's gone into middle income and into high income any of these countries have gone through the process of going from labor intensive into high employment industries and to change the large number of peasants working manufacturing populations so they could gradually upgrading the industry and these are the common points from all successful countries on the other hand China has such a huge manufacturing and this can be used and we can shift part of those manufacturing capability to outside China so we could we could seize the opportunity that's offered by this golden age and for instance we Chinese company as a result can be developed as fast as South Asian countries so the I think that one of the big contribution that China will make that in the end it will be a joint rapid development in the world so what do you think of China's impact and in comparison to what happened to Japan a few decades ago I think that if we take into consideration of what's happening in history and we should also take into consideration that China's investment is rather big it's of a big scale and that's different from many decades ago and I think that the good green company has already mentioned this in China among all the opportunities China will have more opportunities whether it is a developed country or the developing country facing challenges for instance developed countries are facing challenges of deflation China's investment will lay foundation for some countries economic growth so I think there are really a lot of opportunities and China has started to make investment abroad and the Chairman of the Board of Green has mentioned about a common mutual beneficial and so Minister Davis please go ahead China emerging as a major investor it needs to be understood if we're talking about emerging economies in the African continent that you're not the only ones that there are many other investors that are beginning to see that they need to move an increasing proportion of their investments into these areas including investors coming from the developed world including investors coming from elsewhere in Southeast Asia other BRICS countries I've mentioned as well and so I think that the environment is becoming much more competitive and the interview of the recipients that's no bad thing and it enables us to well, you know, pick the best and I think that some of the things that have been said about way of advice about understanding the local environment relationships and things like that I think those are where the competition will be it's not going to be just about financials it's going to be about who is going to be relating to the developmental projects of the country and region concern who is going to be creating employment who is going to be raising skills and all of those kinds of things so I think that it's very important to partner with the objectives I mean just an outline no one has actually gone from being a underdeveloped or a poor country to being a rich country without diversifying and adding more value there are global value chains are we going to continue to be the recipients of Finnish goods are we going to be involved in value chains and producing some part of the Finnish goods that we consume I think those are the critical questions and if Chinese companies position themselves appropriately in that competition then they've got a very, very good opportunity one of the things that Chinese companies have is they carry no historical baggage which is a very, very great advantage in the developing world the post-colonial work so I think that all of that does create some opportunities but it also does mean that things have to happen something that we've learnt as South African companies in the rest of Africa that our companies may carry their own brands but whether they like it or not they also carry another brand and that is of the country concern so if we have people that sully the national brand name that's also a problem as well so I think that there is a need to watch the quality, the way in which these investments relate to national and even regional or continental developmental aspirations okay, thank you so do you want to add anything from the other three impacts do you want to add anything yes, thank you very much I think that in the case with China for example there are also the area of services in this case the approach of both presidents two years ago brought many ideas to the table and one of those was communications in fact we are the only Spanish speaking country with a direct flag to China and this brings also more Chinese people to work in the area of services and the service related companies and in this sense we are very interested in opening sectors like infrastructure like communications like energy these three new areas in which Chinese companies can work together with Mexican companies it's also very interesting they can come alone they can find a partner and we think that this is a challenge you will see many many good news in the papers in the next weeks, months, years because it's working Huawei just announced 1.5 billion investment there was also one in the railroad the high speed railroad that will be moving from Mexico City to Quereta or the tender was opened four days ago then we will be really looking forward for the next generation of Chinese investments in Mexico we are already working with manufacturing we are already working with parts for consumer parts and this is very interesting very interesting thank you because of the time I would like to allow some questions from the audience so I will give you two questions and please introduce yourself when you raise hands who has the question I would pose this question to Professor Lin you emphasize that it's important to have an infrastructure but there is another saying that in the developing countries to invest on infrastructure this is a less disadvantage point and it's not that you can be successful when you have the will to do it and even countries like Germany they haven't had the supporting system for building the infrastructure this is a crucial question and I wanted to say any investment has risks it's not only investment on infrastructure and the green group had risks in Brazil but firstly you should have a rationalization of the economy and from the economics you don't have logic then you cannot make money and also when I was working in World Bank there is a multi-investment insurance mechanism and you need to buy it and so some of the risks you can sell out and some of the risks the investment that without risk you can buy so this is one way to diversify the risks and I think in this way you could guarantee the investments return and the political risk can be reduced yes we have another question from here China one often hears that outbound investment will have a boomerang effect in China and so my question to you as China is trying to become more of a service sector economy and more knowledge intensive economy how will outbound investment contribute to those kinds of transformations in China you should answer this question so how can we shift this out but in the reprocessing and those among this the high value ones for instance the brand the management and the R&D and this can be kept in China so in all the practices of the history for instance the 1960s Japan and 1980s four dragons in Asia they all did this so from the manufacturing point of view we should have more service oriented part that means so we need to making the existing manufacturing production lines into more oriented service oriented if you raise the living standards of the people and then you will have the opportunities on the other hand with the development of the production there will be more complexity in terms of R&D so I think the outbound investment is beneficial for China to have more more necessary I think the investment that the Chinese bank did with our asset management and financial technology platform was only done in conjunction with a memorandum of understanding where we are doing a joint venture in the domestic market so by investing in a firm that's incorporated in New York they're bringing some of the skills and some of the technology back to their home market as well so I think a investment into a financial services organization in New York is benefiting the domestic economy thank you I have about 30 seconds I want everybody to make a conclusion I want you to make a conclusion I think that we have already the integration of the economies in the world and some more advanced countries maybe they are different from ours so we we should firstly have the mutual beneficial concept and secondly you need to improve the living standards of the local people thirdly you should make a contribution to the local environment the local economy so China is a big investor and I think this will be the new beginning for the world thank you and that's it for today we would like to thank you for your time