 Good morning, ladies and gentlemen. Welcome to the very early morning session for the first day of the World Economic Forum here in Tianjin. My name is Tianwei, the moderator for this specific session. The session is going to be about the global economic update for the year 2015. I remember there was an American politician who used to say about government and its policies toward the economy. He said, if the economy moves, just tax it. If it keeps moving, just regulate. And if it stops moving, just subsidize it. Of course, that's a very easy way of describing what the economy is and how the government should do about the economy is to simplify the version. In fact, economy in the world, including many of the regions and countries, these gentlemen and cover in the world, are much more complicated than just these three steps. That's why we're having a panel of wise men sitting with me here, a very strong panel, six of them, early in the morning, to talk about the realities of today's economy and what it is likely to be for the year 2015. My great honor to introduce one by one, not necessarily in this order, I will go with the order provided by the organizer, Mr. Akira Amari, who is the minister for economic revitalization and minister for economic and fiscal policy from Japan. So welcome to the event. Professor Victor Haberstadt, professor of economics with the leading university in the Netherlands, and he is also with the Global Agenda Council on Geo-economics. Professor Wave to the audience. Professor Li Daokui, dean from the Tsinghua University. He is with the Schrodsman Scholars Program. Welcome Professor. Meanwhile, we have Mr. Luis Alberto Moreno, president of the Inter-American Development Bank. Welcome. Professor Kenneth Rogoff. He is from the public policy and economics with Haber University. Professor, welcome. Last but certainly not least, great friend of the World Economic Forum and many of ours, Mr. Drew Main, who is the deputy managing director of the International Monetary Fund, the IMF. Welcome, sir. Six of you. All right, we're going to have fun because we have such a strong panel and time is only one hour. How is that possible? So let me just begin by asking one brief question. Reality check. Let's just do it a little bit. Mr. Drew, in your mind, economy 2015, biggest concern, where are likely to be the trouble spots? Well, the first thing is, I'm not sure I'm the wise man. I'm getting old, but many times I'm very stubborn. So I guess the others are, but not me. I mean, looking for 2015, I would say if you're looking for this year, the global economy continues recovery, but in a very moderate path. Three downsides are just our forecast for this year, roughly 3.7 to 3.4, but I can tell you the first half, the global economic growth was surprisingly weak, which really will say something about the futures. I mean, the whole thing is because the different economy in the different business cycles, advanced economies try to get out of recessions, but now, for example, the U.S. in the top, but many others, for example, Europe and the Japanese not out yet, and emerging markets over the cycle now. So we experienced, see the 90% of emerging markets had a slow economic growth in the past 18 months as well. So this is two very different cycles, I think, were dominant for the growth for the next year, and plus, if you think about access for the non-conventional monetary policy, which obviously will bring the uncertainty to the market as well, I think people have to take that into the consideration, and geopolitical risk, another big concern, I think, at the month of forever old days. So bring them together. I will say the key issue for next year, the challenge is still with the job and the growth. All right. Well, the message is clear. Let's go to some of the regions, since you talked about the general challenges. Professor, how about that? Let's go to Europe. So what is European Central Bank likely to do about deflation? Well, let me first say Europe is struggling. It's struggling more at this time than we had foreseen earlier in the year. And if we look at the outlook for the remainder of the year and for 2015, as for the global outlook, I fully subscribe to what my friend, Jules Min, just said. But for Europe, I believe that perhaps a more sluggish than expected development is on the cards. And more sluggish really implies that Germany will continue to do better than the periphery, but that the rest of Europe will largely be considerably below trend in its economic activity. And thus, the outlook calls, and we may speak about this later, the outlook calls for action of the authorities of the ECB and of governance. For action, well, it means political commitment, isn't it? But it also means there's a lack of specific setup that is suitable or catering to the political commitment. Yes, surely. Europe is a European Union, and the Eurozone are processes. They have only been constituted in the past few decades. And it's obvious to everyone, as been obviously for many years in world economic forum meetings, that constructing the European economy, European Union economy, and constructing the monetary union is an enormous challenge. And creating the political institutions, which really means creating institutions which allow for transfer of sovereignty from sovereign nations to the Brussels level is a big, big problem, which is not facilitated by low economic performance, neither is it by political unrest in various countries. Professor Rogoff, sure, please. I mean, on Europe, I think a victim is very clear. I think the good news is European economy move around the corner now. So its outer recession is as good. But really the bad news is the recovery is very weak. It's very fragile, as you mentioned. So in Europe, they both need the demand policy and the supply policy. In the sense, they continuously need the quantitative easy monetary policy to support aggregate demand. I think this is all they should because demand is so weak. But meanwhile, I would say in Europe, the structure reform and the supply side of the policy reform become ever more important now. I think these two things, not only one thing, not only the demand policy, two things will define the growth in 2015. So I fully subscribe to that. And actually, it has been the IMF view and the view of many economists around the world, not only Europe, that a multi-pronged approach is required. And it's only last week, actually, that the central bank has indicated, though not unanimously, has indicated that it will start on a policy which is not yet QE, something like QE, and which also will require the structure reforms in the largest weak economies. Just recap for everyone in this room, France and Italy together are one third of the European economy. And they are struggling and have been struggling for a fair number of years. And we will need to see them improve their economic performance before there will be a more general improved performance in Europe. They are just so reluctant to use the word QE, don't they? Professor Rogoff, the US was not very shy about that to begin with. But right now, we see the economy seems to be apparently getting better. But how much better? And what would that mean for the Federal Reserve when it comes to the bond buying programs? Well, certainly, the way it looks is that the United States is in a fairly solid recovery. I'd say there are a couple other countries that are doing well. The UK, at least I would have said that till a week ago when Scotland threw a monkey wrench in the works. And then Canada, there are other countries, I think, doing OK. The United States really is in a different place, having emerged more solidly. That said, I think we have to have a lot of humility about saying that. Because as we look at this recovery, for example, look at Federal Reserve forecasts, they publish individual forecasts. And they're always coming down each time, each time. They have never guessed too low yet. And so there's this optimism. It's the same for private forecasters, more or less the same for the IMF for everyone. It is very typical after a financial crisis that you have years and years of slow growth, as my work from seven or eight years ago showed. On the other hand, if the US continues to recover, then there will be a moment when the Federal Reserve has to raise interest rates. And markets are not prepared for that. They read about it. They say it's possible. But again, looking at the forecasts of the governors of the Federal Reserve, they're up here and the markets are here. They just don't believe it. They don't believe they do it. And I think not only they don't believe they do it, they can't imagine how they would react. It's very hard to have a tightening cycle. It's not an easy thing. You do it to stop inflation. But there are very few examples where it's really smooth and just flipping over to, I'm here in China with one final remark, many of the countries of the world are trying to speed up. I think in China, you know, we're in a place where everything's trying to stabilize, stabilize growth, stabilize pollution, stabilize power usage. And that is not easy to slow things down. The US is facing it, maybe China too. Well, there's a debate about the so-called normalization because that is so important in being used as a standard when the government or Federal Reserve should act. What to you is the word normalization? I mean, what does that mean to you? Well, I think we're still coming out of the financial crisis and you can't even begin to talk about normal yet. And the rest of the world is certainly not there. I think the questions, how much risk to take that you wait too long and inflation gets out of control? That's really the debate. My personal view is that this is so catastrophic what the world's been through. You want to err on the side of letting inflation drift upwards for too long. But if they do that, they'll get a lot of criticism. But if they tighten and the economy flattens, they're going to get a lot of criticism. Well, all right. Sure, please. I think this is such an important issue. You mentioned normalization. I would call it access to the non-commissioned monetary policy. This is such a big issue and fair access to non-commissioned monetary policy, not only a big issue for US but for entire the whole world. We have very interesting studies. The study says if the fair access to the non-commissioned monetary policy weighs in line with the growth, with the proper good financial foundations, so that with the good communication, that means it's a positive shock, which will be good for US growth. And it probably will have a positive impact for the global growth as well. But if the exit process weighs in line with something else, for example, more on the financial instability in the financial market, not completely in line with the growth and with a few other issues and not well communicated, it could have a quite a big negative impact, not only for US and also for the whole world. I think this is a very big issue. We need a global attention, a global cooperation on these key issues. On the exit side, there's a fair policy operation on the side, but there's a market response issues exactly you mentioned. The market and the fair have a big gap now. I'll just give you a few things. The price to access today, repressing relocation is a big deal, right? For example, in today, in the bonds market, the part of the bonds need to be clear. And the dealer's infantry, it's a huge gap. We had the lowest dealer infantry in the bonds market ever in history in the US. That's a structure in the market. So whole market response also big issues. And the third issue is how countries prepare themselves to respond to the US Fed access to non-convention of the market policy as well. So this is a big issue, obviously, for next year, 2015. And Professor Rogoff, you've got a chance to respond. This is not a rare thing that you're debating with the IMF representatives. My good friend, Chairman, I think it's not just unconventional monetary policy in the QE. That's over. That's ending, unless things go much worse. The questions when they actually start raising interest rates. And that moment is coming, at least on current policy. So markets were having a hard enough time wrapping their head around just having QE, which is not nearly as powerful as raising interest rates coming. And so that concern eventually I think is going to weigh in. And again, I agree completely, this is a huge thing in global markets. Almost exaggerated the importance of it. Well, I mean, you hear there's instability, geopolitical instability in Europe. Don't worry, the ECB will do QE, and it will be OK. The tool is only so powerful. But assets are priced, and a lot of debt is taken on with the idea that the interest hikes, if they're coming, are long delayed and very slow. But the Federal Reserve governors, when they're giving their forecasters saying, no, that's not what we're intending. It's going to be faster than that. So that could be quite a shock to the system. All right. Can I add one more? Briefly. I think this is a very important issue, but I really think I talked too much. Oh, well, complete the shut up after that. Care is absolutely, absolutely important issue. There's people usually forgotten. The rising in interest rates is not a surcopter liquidity. The interest rates have a few implications. Number one, when the interest increase, the assets have to be reprised, which will cause a global capital flows relocation, repossessing, reprising. I think that's the big issue. That's what we observed in May 23rd last year in January, February, this year as well. The second thing is more important. The interest rates will not go, we observed in the last May 23rd. The interest rate will be very volatiles. A volatile interest rate is a killer for the market because for the short-term assets holders, you don't know how to price your assets. So Mr. Drew, what would you propose? Now, I think another point is also important. The interest rates will have a fundamental impact on the government debts. Can I see your book? I just won't give you an example. In 2007, the old advanced countries has roughly 72% of GDP of government debts. You know, how much they paid the interest rates at that time? 2.9% of GDP. So what would you propose, Mr. Drew? No, the point is today, how much debts they have? 107. So debts increase 50% in the advanced economy. How much interest rates they pay for the debts? 2.9% of GDP. So debts increase 50%. But the interest payments is the same. So if interest increase will have a profound impact on the government fiscal policy, we should not ignore that. Now I'm going to shut up. No, you will have many other opportunities to talk as well. So are the other panelists. And now let's go to Japan. The majors, other than the dividend, the strength and the basis, and that will lead to greater consumption power and investment, and that will strengthen the productive activities. So what we are aiming at is to achieve the virtuous growth of the economic cycle. And with the better cycle, the wages improves and the consumption improves and the corporate performance would improve. And then that will lead investment in research and development and capital investment and will lead to a greater profitability of the corporate side. And we are seeing the success and I believe it will succeed. A lot of theory studies, wonderful theories. But how is the reality, for example, is the tax increase correct? For example, what about the other policies, foreign policies, nuclear policies? How will that influence the popularity of the prime minister? And as a result, has it impact on his economic proposals and is possible for success. Tax increase, consumption tax hike. We are in the phase of increasing consumption tax rate. We've done this once and according to the process, we will have the second round of consumption tax hike in October next year. This will be a source of social security, the medical care and the nursing care and the childcare, such as social security. Half of that is supported by debt. In other words, the deficit bond. But it will not be sustainable. If so, then not trustworthy. And it will undermine the credibility of national bond. Therefore, sustainability of social security and to heighten the credibility of fiscal consolidation, we are trying to increase the consumption tax rate. But at the same time, we have to ensure the viability of the economy. And to that end, in a couple of years, we will reduce the corporate tax rate down to the German level reduction by 6%. And you talk about the nuclear policy and it may be considered one of the concerns of foreign investors that increasing of the energy price. Biggest reason behind is that other nuclear power plant, other than that was hit by the accident, all stopped. And because of that, it causes the additional energy cost of 3.6 trillion yen. Of course, nuclear power plant safety comes first. And we will not give in there. Our safety standards are the severest in the world. And when that safety standard is cleared, the nuclear power plant should resume operation. That will reduce the energy price. And this is the resolute stance of the Bay Cabinet to achieve that. And about the foreign policies, you might be talking about some frayed relationship between China and Japan. And in order to improve that. Are your shoes all related, not necessarily related to only Japan and China? So, Japan, China, Japan, South Korea, improvement of the relationship will for each country. If there is some political concern, political instability or economic relationship, we try to separate the relationship economy and politics. But there are some subtle issues. We cannot move to other places. In other words, every country should be very serious and earnest about the relationship of the each other. And that would give good impact on the economic relationship for sure. It's not necessarily addressing whether the geopolitics might mean for the Japanese economy. Probably he will need some time. Later, we'll let him explain further. Let me go to, first of all, Mr. Zhu, you want to comment about that? Or should I go to, oh, okay. Let's go to Professor Lee. Please, Professor Ruckoff. I just have one quick question for the minister, which is, I mean, when I look at Japan, the fundamental shock is demographics. They are ahead of, Japan is ahead of everyone else as an aging society shrinking labor force. It's really hard to see how Japan can recover in the long run without permitting much more immigration than it does. It started, I think, with construction workers but also healthcare workers. This seems like the number one structural problem in Japan. Even though, Mr. Minister, you have not studied in the United States, there is a U.S. professor propose a question to you. Thank you. Thank you. About the immigration, it is a delicate issue. And the declining of the population over long run is the biggest challenge for Japan and for future. This will be a biggest challenge for other countries as well. And in 2050, the current population of 127 million will stabilize around 100 million people. That is the long-term policy and plan. What we'll be doing over the short run is to heighten the efficiency of the economy and to entice those who outside the labor market to come into the labor market and also to improve this skill level of the existing workers and the worker productivity would increase and also to ensure the woman's potential will be realized to the fullest extent. This is the biggest thing for the Abe cabinet. And this time, the largest number of the woman ministers coming to the cabinet and the young woman is one of the leaders of the party in power on the three-time election. Any of them in the near future. Let's go to Professor Lee, Lee Daquai from China. You want to, first of all, respond to what the minister just said, particularly regarding Japan's relations with the neighboring countries and whether that is at all going to have an impact on the neighborhood economies, including that of China? Well, before answering your question, let me follow the example of my good friend, Zhu Ming, by stepping out of my border and by setting by your question, talking about the U.S. economy. Now seems to me that we have been focusing too much on the aggregate picture of the U.S. economy. To me, the U.S. economy judging from the GDP growth and the financial market performance is recovering beautifully. The numbers are very good, right? GDP growth around 3%, maybe 2.8, you can debate 2.7, but around 3%, financial markets are doing very well in terms of asset price. Housing market is recovering and unemployment by your whatever standard you use is declining. However, the issue in the U.S. is structural, social issues. The labor participation rate is very, very low. I think one of the lowest in history. So I think talking about the U.S. economy, we have to analyze the midterm election to come in about less than two months, right? So I guess, well, it's also a question for Professor Rudolph. If in the midterm election, the Democrats are doing not too bad. So maybe the fiscal policy will be relatively turned into expansionary because right now your fiscal deficit is coming down drastically for various reasons, right? So I think that is a big, big variable in the equation in addition to talking about the monetary policy. So this is my true sense view. So it's possible for the U.S. economy to focus more on the fiscal policy and expand a little bit down the road next year. Now coming back to the U.S., China, Japan. Middle of the year or end of the year, of course, that's another debate. Go ahead, China now. China, okay. China or Japan, I think for sure, the political relationship between the two countries is hurting, is hurting both economies. And more so on the Japanese side than the Chinese side because after all, the Chinese economy is growing. The Chinese economy is reducing its reliance on the foreign markets. But for Japan, the same thing cannot be said. So very, very unfortunate. The diplomatic relationship is not doing very well. And well, depending on which side you are on, you can blame each side. But to me, I think the Japanese side is on the aggressive side. It's now making a lot of moves, not willing to recognize the reality. The reality is that there are disputes on islands. Just recognize the reality itself is already a big progress. So not, I think, something to be done on the Japanese side. All right, we don't want to turn this into a geopolitical debate. I understand. But I still need to be fair so that Mr. Minister could just briefly respond to what you said, and then we go to first questions about China with you. Mr. Minister. About the islands, territorial disputes, oh, there are no disputes as such in our view, in the past, now, and in the future. That's the Japanese position. And you said that the Chinese economy, not much worry, but a greater impact on the Japanese economy. We are dependent on the overseas market. Thanks for your concern and worries. On our side, we are trying to strengthen Japanese competitiveness and the prescription to that end. We should get out of deflation. Otherwise, we cannot really feel the impact of the growth policy under the deflation unless you spend the value or the increase of the money because the value of the goose will decline in deflation. And under that, if we try to stimulate investment or industry strengthening policy, it would not be effective. That's why we are trying to get out of deflation. In case you go into deflation, it may be a reference to you. And your worry, we can understand. And about the Chinese statistics, there might be some questions and skepticism by the expert, such as a power consumption or cargo transportation and the capital supply over long to medium term. Maybe the Premier Li Kou-Cheng's indicators are trustworthy. And based on that, there may be some question about the growth path you are talking about. And what you would have to think would be a middle income trap for China, the wage increases, and competitiveness might decline. What's needed would be structural reform and structural reform of the national economy, national companies or the public owned companies. Can you do that? That's the question. Form and structural reform. That's the challenge we all face in the world, don't we? Have we done anything? What about China? Professor Li, obviously, Mr. Minister is now shying off from pointing out many challenges China is facing. So you want to respond to his question particularly when you have some of the issues going on right now, the anti-corruption campaign. And also, earlier, we also had some people ask the Chinese Prime Minister already about the anti-monopoly campaign, whether foreign-owned companies are being targeted. All of these were mixed up. How is it likely to impact on the Chinese economy, which at this moment, even though doing quite well, but still not keeping a high growth rate as it used to be? Professor Li. Well, it's very interesting to be in a panel with the minister from Japan who seems to be very familiar with the Chinese economic issues, and perhaps more so than the Japanese economic issues. That's fine. I think in China, at least as an economist, I think I welcome people from outside to be interested in Chinese economy and the Chinese economic issues. To me, the Chinese economy is in the middle of very difficult and challenging transition. The transition is too forward. On the one hand, there's a need to shift the engine of growth. The new engines of growth have to take over the old engines of growth. Meanwhile, on the other hand, the structure of the institutions, the institutions themselves have to be fundamentally reformed. On the first issue, we are talking about the old two engines, which are export and the property market development, being facing away, leaving room for new engines of growth. And the new engines of growth are gradually coming in, therefore explaining the current slowing down of the economy. And by implication, I do believe that the current slowing down is temporary. In other words, Chinese economy, in my view, is going through a U-shaped adjustment right now, coming down from over 10% of growth to something between 7.5% and if possible, if the reforms are successful, the GDP growth rate should be able to recover a little bit. Because, after all, the per capita GDP of China is only 19% of the US having tremendous potential for further growth. So what are the new engines of growth? They are fundamental consumption-based infrastructure investments, which are gradually coming in. However, financing for the infrastructure investment requires fundamental reforms, switching from short-term bank-based financing to long-term bound, long-term bound, low-interest rate bound. That is reformed to be done in order to spur the new engine of growth. The second new engine of growth is private consumption, which is gradually recovering. As a share of GDP, private consumption is increasing by 0.7% a year. So in the coming three, four, five years, it's possible for the share of consumption to be as high as 50% of GDP. Currently, it's about 43%, 45%. That's the second engine of growth. Third new engine of growth is, I call, the greening up, the greening up of the production capacity, running from steel to petrochemical to power generation, where tremendous investments are needed in order to upgrade the production capacity. Now, on the reform side, in my view, there are two steps of doing reforms. The China is now doing the first step of reform, that is top-down reforms, to clean up government behavior, to clean up corruption, to greatly reduce government intervention in economic affairs, especially exciting interference, meaning approval. And perhaps beefing up exposed regulation, exposed monitoring of business behavior. And also, that top-down reform is also now focusing on the legal system. In the coming one-half month, I think we will see a big document lining out the upcoming reforms of the nationwide legal system, which will have tremendous implication for doing business in China. The second step of reform, which I believe will be coming in a few years, would be bottom-up reforms, including experiments with the reform of state-owned enterprises, as minister just mentioned. So reforms in China usually take faces. And in this round of reform, there are no exceptions. Currently, the focus is on top-down reforms. And the bottom-up reform is gradually coming because many officials, frankly speaking, are confused. They are facing a transition from the old business model of dealing with business to the new model, which should be more regulated and based on rules. So that's going on in China. Of course, we're all looking forward for the fourth session of the 18th Central Party Committee, which is going to be, as you said, start in a few months. Mr. Zhu, even though you are coming from the IMF, you were and still are very familiar with the Chinese situation. What do you think about all of these political campaigns, anti-corruption and also economic and rule of law campaigns, for example, anti-monopoly campaign going on in China? What does that mean for the general ambience for the economy to grow? I think it's become ever-clear in today in the world. If you want to run a healthy economy, you need a transparency. You need good governance structures. You need a good institutional capacities, which are all against corruption, this type of things. So I think this is the general thing for the whole world for all the countries. I think China is taking its very serious anti-corruption assistance movements to ensure the governance structures, ensure the transparencies. I think there will pave the road for the future healthy and good economic growth. Is there a timetable, as Mr. Li just indicated? Oh, then you have to ask Mr. Li. You say the article about International Monetary Fund. Mr. Li, is that the timetable confirmed by you, or is the general consensus there? I think there is a timetable for individual items of reform. For example, in the area of financial sector reform, there is a timetable of three years for the interest rates on the borrowing side to be fully liberalized. On the lending side, it's already market-based. And again, for example, in the area of financial reform, for the capital account, the convertibility, I think three years is often mentioned as the duration for the account to be basically opened up. So, however, for the overall reform program, I'm not aware of any very well-articulated timetable. Because overall, I think implementing reforms are very difficult. You have to do it step by step. Filling the stones while crossing the river, as Mr. Deng Xiaoping indicated decades ago. So it's hard to have an exact time. But now, what about Latin America? Do we have a timetable? They used to say when the US sneezes, Latin America catches a cold, and now they switch to some, switch to when China sneezes, Latin America catches a cold. Is that really the reality or there's too much exaggeration in it, Mr. Romero? Well, I think that's probably a picture of the Latin America of 20 years ago. I think there's been plenty of immunization along the way. Professor Rogov did a fantastic book in which he described the many financial crises that existed over the centuries. And if you just look at a period of 25 years, Latin America had over 30 financial crises. So I guess we learned the hard way. And as a result, you have macroeconomic stability today. So what happened in Latin America over the past 10 years was really a period in which our economy is almost tripled in size. We had a lot of tailwinds. Certainly, for instance, South America especially, you can basically track South America's business cycle increasingly with out of Asia and specifically on China, largely because of the demand of commodities. Whereas the Caribbean and Central America and Mexico are largely much more impacted by what happens in the US economy. So it's no surprise that today you see better growth happening in Central America, Mexico, and the Caribbean than you see in South America with some exceptions. Now, the big difference today, of course, is we have no aging problems. We have a demographic bonus. Latin America average age is 27. We have no geopolitical problems. We have plenty of energy. We have plenty of natural resources. We have a growing consumer market. Certainly this change in tailwinds, what in essence is implying, the need for structural reforms, many of which have been spoken about here. Now, structural reforms certainly take time before the effects of those reforms have a repercussion on growth. And in a large extent, the need for Latin America is going to be largely to focus on increases in productivity. If you look back over the last 20 years, the cycle of productivity has almost been flat by comparison, say, to Asia, which has been growing consistently over time. So if you were to simply introduce the growth of productivity of the United States to be equal to that of Latin America, we'd be probably growing double the rate. This means that we would need to do far more in human capital investment in the quality of education that we have throughout our system. We are very low in all of the international scores that are done, especially those of the OECD. We have to do far more in innovation. This is increasingly a global economy where innovation matters significantly with a lot of destruction in the process. These countries need to adapt to that reality the way our labor markets and how efficient they are. And more importantly, the huge lag that we have in investment in infrastructure, which by comparison, say, to China, we probably have been investing not even a third of what China has been doing for the last decades. So in sum, this means, on the one hand, huge opportunities for investment. And in this regard, we need a strong Chinese economy. We need a strong US economy, strong Japanese economy, a world economy that can help us. But it is very different today than before because I think a lot of the growth can also come from our own domestic markets. And if we continue to have some macroeconomic stability, it's going to be critical. I'd like to close by picking on something that both Shumina and Ken mentioned, which is the issue of when the Federal Reserve begins to consolidate its balance sheet, the impact on interest rates. When you look back at the big crises that took place in Latin America, all of them happened largely because there was this kind of dry up of liquidity as a result of the increase in interest rates when you have these locations that Ken was mentioning. This is a very serious issue. And certainly, we have reconverted a lot of our debt into local currency in many of our countries. But still, what happens to interest rates and the speed with which they go up will certainly have a huge impact on growth as we look forward to 2015 and beyond. What do you have in mind then? No, look, I mean, hearing Professor Rogoff, I know what the Fed has in mind. I mean, there's little that we can do to affect that. I think the contrary point to that is how countries prepare themselves to basically signal the markets to begin to do their own with their own central banks to anticipate the shocks that could happen. Is Latin America prepared, ready for that? I think all in all, yes. I mean, there's certainly exceptions, but the larger countries, some are a little bit behind the curve, others are ahead. And the reality today, when you see countries like Mexico doing the kinds of structural reforms that it has done recently, it will benefit from growth that you will see largely because of the US, but a lot from the reforms that they have been doing. And the other countries that are growing faster is because they have stayed at a pace where they have been doing some of these structural reforms. Mr. Drew, I want to say a few words. I know you travel to Latin America pretty frequently. I very much agree with my friends that Luis said. I think the Fed policy will have quite a big impact on the region as well, as Luis mentioned. I think that's very important. And the key issue is for not only for Latin America, but for all the emerging markets, prepare themselves for the coming policy change. That means make sure your current account balance is okay, make sure inflation rate is okay, make sure your exchange rate is proper in line with the market rate, and make sure your fiscal deficits is not overblown. So there's a few things you have to do that. And in the region, we observe in the past 18 months, working very hard on the structural reform issues on the macro-adjustments issues. The process is not even, that's for sure. Some are moving fast, some are not moving fast, but regions are well-working on those issues, particularly after May 23rd, loss is shock here. I think that's our assessment. We are really running out of time. And we are all years actually, we really want to learn more from you guys on the stage, but let me just put out some very general questions and then invite some questions from our audience, then we can interact with all of you. We covered a lot of regions and countries by our panelists, their analysis, but there are many other questions really needs to be asked. For example, whether the QE policy is really going to help us to save the world, or rather it is only a postpone of the real issues that we should handle with our own economies. That's one thing, for example, whether geopolitics is likely to have a deep impact, given it's China, Japan, South Korea, or Russia, the West, whether these will have an impact on our economies in the near future. Meanwhile, what about some of domestic politics going on in different countries and regions? How is that? And meanwhile, the question of innovation, is it really going to bring a lot of new momentum to the real economies? These are all questions needs to be asked, we do not have the time for me to ask, but I'm sure our audience have a better way of asking these questions. So with a sign over there, we only have five minutes to go. Let me quickly go to the questions from the audience. Raise up your hands, say where you're from, and just ask a question, don't make a five minute statement. Thank you very much. This gentleman over here, I'll try to address different areas. If you can, very briefly, sir, thank you. Robert Milliner, B20 Sherpa from Australia. Number of the panelists have commented on structural reform and on Mexico, which is probably the widest structural reform going on in the world at the moment. Could you give us some comments about how we can work with governments to encourage greater structural reform? Many governments are actually backing off structural reform and being more protectionist. Thank you. Thank you. Which one you want to address, too, or shall I just ask generally? Okay, this is the matter. Well, look, it's easier to talk about structural reform than to do it because it requires building political consensus. The way Mexico did it, and President Peña Nieto was by creating a multi-party agreement that they called the pact for Mexico. And they basically set a set of reforms that needed to take place, and they were able very efficiently to pass many of these reforms. And I think at the end, it requires a lot of hard work, a lot of good political work, and a lot of leadership. And there is no solution different than strong leadership for getting structural reforms through. Anyone else? I would just say if I had to point to something that's disappointed me the most in the period since the financial crisis, it is the lack of structural reforms in the advanced countries. In the United States, nothing, basically. You could talk about the financial regulation. Europe, Spain, Ireland, but there are many countries that have France and Italy, basically nothing. And it's very hard to come out of these things quickly. Everyone said, it's okay, we're gonna be like Sweden. That's what everyone pointed out, because they come back really fast. But they shrunk their government, they did a lot of structural reform, and we're many years past the Swedish experience now. Structural reform? The key question I think for the policy makers is to ask what structure to reform? I think people talk in a so general sense. The labor market reform is one thing, infrastructure investments is one thing, pension reforms is one thing, it's all different, you need a different skin, you need a different political base. But the key issue, you have to understand what is the structure has been shifted. Can China be versatile in figuring out all the structural reforms? Yeah, very quickly. How to encourage reforms? I think nowadays a big, big factor affecting reform is the media and public opinion amplified by the media. So I would think a balanced, patient, a long-term view would be very supportive of reform. On the other hand, a short-termist and very negative, and focusing on the short-term unintended negative consequences of any reform in the media would disincourage reform. All right, I am having the sign from the organizer. We only have one question left. Is that what you're saying? One question. So let me just be gender-balanced. We got a gentleman earlier asking from outside China asking a question. Let's have maybe a lady from inside China also coming from the media. I think this lady over here. One sentence if you can. Go ahead. I'm so sorry for the others. Several sentences for Minister Amral. I have a question on the price level in Japan. As brief as possible, please. Yeah, I try to do that because the question will be complicated. After 18 years of the abinomics, the wage level in Japan finally started to rise is good news. But the bad news is that because the whole level of the prices started to rise at the same time because of the depreciation of the yen, which pushes the real wage level actually down to the negative level. In July, it became to be the negative 1.4%, which is very bad news. So the question is? The question is, according to the Goldman Sachs, it means the failure of the one core target of the abinomics. Do you agree with that? And how would you comment on that? Thank you. Mr. Minister, you probably only got 30 seconds. I'm so sorry about this. So my conclusion, I do not agree with what you said about wages and the most immediate monthly wage increase by 2.6%. It is after 17.5 years. Well, the prices naturally would rise. We are trying to do it. And the price is kept on dropping and we try to have it increase and then consumption tax increase. So to that extent, prices would increase. What we are trying to do is achieve the wages would go over the prices through multiple years. So the virtuous cycle, the enterprise productivity would increase and start the virtuous cycle. That's what we are doing. Mr. Minister, you did it beautifully. 30 seconds. Thank you. And ladies and gentlemen, we are running out of time for this very wonderful session about the global economic prospect for the year 2015. I guess many of you have provided your knowledge, expertise, and your advice. And I guess one of the things we really should do is to act responsibly. So thank you very much, gentlemen, for being with us. Thank you very much. One more round of applause for all of you. Thank you, also, our audience.