 Welcome to this session on competitiveness. My name is David Schlesinger. I run a China in media consultancy. I'm the former editor and chief of Reuters News globally and the former chairman of Thomson Reuters China. Before we begin this afternoon's discussion, the forum has prepared a short video to introduce the subject. So let's run the video now. Uncertainty has eclipsed the world economy for a long time. The overshadowing sovereign debt crisis in Europe, the risk of a weak recovery in the United States, combined with the slowdown of economic growth in China and other emerging economies, has cast a cloud of doubt over the global economy. Within such uncertain times, a high level of competitiveness is the best strategy to ensure resilience and sustained prosperity. The Global Competitiveness Report seeks to explore and define the common factors and policies that create sustainable prosperity for economies. In other words, we're looking at their productive potential. The considered factors range from the basic to the more complex, political institutions and governance, infrastructure, macroeconomic stability, as well as the quality of human resources are all taken into account. The country's labor market efficiency is examined, as well as financial and goods markets, and how well these factors are allocated within the economy. Innovation and the development of new technologies are also critical for more advanced economies, looking at the capacity to develop new products, improve business models, and enhance productivity. Switzerland remains highly competitive, topping the rankings for the fourth year running, with the Nordic and the Asian Tigers also performing strongly. Some Western European countries, like the Netherlands and Germany, also feature in the top 10. But Southern European countries such as Spain, Portugal, Italy, and particularly Greece continue to struggle. The United States continues to lead the way in innovation. However, a number of weaknesses are chipping away at its competitiveness. The U.S. fiscal imbalances and continuing political deadlock over resolving these challenges means that the country falls two more places to seven. Its fourth year in decline. Russia and India have also weakened in recent years, while China and Brazil have emerged the stronger leaders among the BRICS, fortifying their rising importance in the global economy. For more than three decades, the Forum has identified competitiveness as a key issue and indicator for future prosperity. And we've stayed in tune with the latest developments in thinking. In order to ensure rising prosperity in an uncertain future, we aim to integrate the concept of sustainability more comprehensively into our broader competitiveness research, capturing the extent to which countries are addressing social and environmental concerns. Sustainable competitiveness is a new concept and a potential solution to the ongoing global economic challenges we face. And that innovative thinking is detailed in this year's report. The Global Competitiveness Report is one of the leading tools for benchmarking competitiveness, both now and for the future. So what that video shows is a very balanced scorecard approach for looking at competitiveness and a very sophisticated approach, but one that in the end still leaves developed economies very much dominating the top and the ranking of the top ten. I think its Switzerland, Singapore, Finland, Sweden, Netherlands, Germany, United States, United Kingdom, Hong Kong and Japan. So what we want to talk about this afternoon is what countries and companies can do to become more competitive, what makes a winner, what you can train for, what you can develop, how you can develop your people and your institutions to actually have much more long lasting, sustainable competitive advantage. Joining me on the stage, Huang Mengfu, the chairman of the All China Federation of Industry and Commerce from China. Prime Minister Helle Thorne-Schmidt and Prime Minister Helle Ramey of Rwanda. Marie Gabrielle Inaykin, State Secretary of Economic Affairs of Switzerland, Mustafa Muhammad of Malaysia and Gordon Orr of McKinsey, who studies companies and helps companies become more competitive for a living. Welcome all. Huang Mengfu, let me start with you please as the host nation and one that is rising up the rankings of competitiveness, in the top ten. What is your vision of what Chinese companies can do and must do as part of the national development to become more competitive? Although Chinese overall speaking generally speaking Chinese companies are not the best of most competitive but some of the Chinese companies I think they are improving their competitiveness. They already have this kind of global influence and I think this kind of for example the number of patents they registered and they owned and the total number of the patents created by Chinese company ranked third globally. So I think if we look at corporate competitiveness the innovation capacity is the key. It is very innovative and they can always adapt themselves to grasp to see opportunities in the market and then they will be very successful. So I think the Chinese companies are now very much paying a lot of attention to investing in science and technologies especially innovation. This is a very important foundation for future innovation. Secondly is investing in human capital. Human capital is the very key for innovation so to attract most of the best talents into companies and corporations will be another successful factor for behind competitiveness and thirdly in order to be more competitive you need to be global. So you need to be globalized and you need to compete in the global market so in order to be competitive you need to be very competitive in the global market that means you can have the access to the global capital market you can have access to the global human capital market and also you can better tap on the global resources to develop your own companies I think such kind of globalized strategy will help you out. Prime Minister Krebs, you could talk about some of the developed economies of the West, Nord economies in particular do you think there are particular lessons that can be brought from their competitiveness in the future? Yes I do because I think what this video is showing as well and what the World Economic Forum assessments of competitors have generally shown is that competitiveness is a very complex issue that might have been a time where we thought that low taxes, low regulation was the best path to become highly competitive but I think what we are understanding more and more is that that is perhaps not as simple as that and that being competitive is about people, institutions equal opportunities not wasting talent in your society women of course as well which is a waste of talent in many countries because you don't have equal opportunities so that is what competitiveness is about and an example I think is interesting Denmark is not on the top 10 this year we are number 12, we will improve that for next year but what I do think is interesting is that you still see the Nordic countries as some of the most competitive in the world and the Nordic countries are of course different countries but we still have a common denominator which is that we are countries with fairly high taxation a lot of regulation in terms of environment and health and safety in the workplace but also a fairly large state and from a traditional point of view you would perhaps say how can that be competitive the fact is as you have shown yourself during the years that the forum has shown itself that it is actually competitive and I would actually argue that the countries that have had a strong state high regulation and of course good economies are the countries that have come through the crisis in a better way than so many other countries and when I say that we need a strong state and a strong welfare state of course I mean in a healthy way in a way that is sustainable from year to year a system that can be paid for year to year and I think there is a very strong point particularly after the crisis or at the when we are on the edge of exiting the crisis to argue that some of the countries that have had regulation in terms of environment in terms of strong state that can provide for equal opportunities investment in education and investment in infrastructure those are the countries that have come that are exiting the crisis best and those are the countries that have the future in them in terms of competitiveness Interesting thank you President Kagame from a position of a country that is trying to rise up the competitive league table still in the 60s how do you view the role of the state and what can you do to actually help Rwanda and what can similar countries do to become more competitive Thank you competitiveness first of all builds on a number of things builds on activities on conditions on efficiencies thereof but it also builds for a purpose it's competitiveness for the purpose of growth where it is or farms it's about growth how do they grow with the nation it is how that growth trickles down and impacts on people's lives does it make the difference and that's why I agree with the point that has just been made competitiveness builds also on the compact between the top and the broad bottom meaning the people what is the how do the two interact to make sure that there is overall growth and therefore that growth also leads to the difference for each individual in that government has the role to make sure that it acts in a partnership with the private sector to make sure that the vision that has been articulated within which they work serves both and both serve the vision so there has to be a clear connection and responsibilities where the government should be investing in creating conditions where the private sector operates and thrives in which case therefore it comes back to the same point made again by others earlier it's about building institutions it's about infrastructure it's also about playing by the rules which is regulation how is therefore you have to look at appropriate ways of regulating these activities to make sure that there is always and on which innovation and entrepreneurship will thrive and affect and touch every life of the nation so government has responsibility to play its part in that in playing its responsibility with the people and not doing things for people but rather making sure that they allow people and there is always the potential any people wherever you go thank you when you look at Switzerland and Switzerland's long standing position at the top of the league tables what is it that is particular about Switzerland and what is it that can be put into a playbook that could be distributed more widely that others could copy well I think probably the most important thing is the general framework conditions that we have and have had for many years many things have been already mentioned rule of law, institutions that work I think that has been the main issue not deviating from those and strengthening those if possible the second very important issue is the issue of human capital and education we have a dual system of vocational training and academic and I think we have been very well served although even the forum says there is more enrollment in academia we think it's not what we need what we need is more enrollment in technical like engineers and mathematicians and people like that but you can study this in Switzerland without going to university and the third thing is of course innovation and when I look back to the 90's even beginning of year 2000 we were not so good at innovation we became better also with the help of many good people the skills we needed and we didn't have in Switzerland and which helped also during the last years to make a very robust economy so I think innovation and the unique cooperation between industry and academia the government remains a little bit in the back we have some we can give some help but business has always to participate so it's never for free it's never subsidization and it is our firm believe that industrial policy is not what we should do last year when it was very difficult with a very strong Swiss franc and suddenly people came and said we can't cope anymore because even very competitive export industries were feeling that they were losing margins and losing out markets even then we said it's not the right thing to do so then the national bank did the right thing and we continued just to ensure that the general framework conditions were good and that's how I think we could keep the good position we had I hope it continues it's difficult in difficult times and with a world demand going still growing but growing less fast it's difficult for a country so heavily dependent on foreign trade that's why another important thing is open markets and open trade I think that leads me to my question for the emerging Asian economies have certainly had a roller coaster ride over over the last several decades what are the specific lessons about what you must do during the bad times to prepare to keep the country's competitive 97, 98 of course those are very difficult years and some of the East Asian economies have been able to reform and transform and in general those countries which have been able to enhance the role of institutions macroeconomic stability implement measures which improve talent for example these countries have done well I'm talking about my own country Malaysia for example we learnt lots of lessons during the 97, 98 crisis governance was improved the banking system was strengthened and this has enabled us to do rather well in the rankings and some lessons we learnt and of course we had a recent European-American crisis American subprime crisis and that is still well behind us but now we are settled with another set of challenges so if you are competitive we will be in a better position to overcome these challenges having said that I just want to relate the correlation between countries and the level of competitiveness there is not a direct relationship but there is a very strong relationship between the level of incomes with level of competitiveness you look at the top five countries Switzerland, Singapore Sweden, Denmark and Norway and all these countries and at the bottom you have Burundi, Sierra Leone and there is to me there is a big difference between how competitive you are and the level incomes and that has got to do with other panellists have said in the last few moments when you have high incomes you can have good social protection you can have good institutions you have education science and technology innovation so in our own situation talking about where I come from in Asia and Malaysia this is a challenge for us having lots of resources to move up the ladder is so important to improve the quality of human talent education innovation S&T for as long as we do not improve on those funds it is going to be very difficult for us to move up the chain the index finally a few words on the role of government we believe governments play a very important role not only in terms of setting rules and regulations following the rules and regulations but also in terms of taking the lead and in our case as far as East Asia is concerned and ASEAN is concerned we believe government which is pro-business governments which understand the challenges being faced by business this is key to ensuring that companies in our part of the world are competitive so those are some thoughts I would like to share with you at this point in time thank you Gordon or you spend your life looking at companies and trying to help them become more competitive are there things that you see in common companies that they do wrong and things that they in common that they really should do better first thing I'd observe from spending 20 years in North Asia is just how quickly the competitiveness of a country can change and how effective governance really within a decade can transform the business environment and its attractiveness I think you we looked at a couple of things from a business point of view key enablers where we see broadly defined public-private partnership let me talk about talent development first and then maybe harnessing innovation to go with that so I think in enabling the right talent development and mobility to become more competitive highlight four things first just to echo what you said ensuring you're maximizing gender diversity in the workplace just to take a couple of comparisons entry-level white collar in China is 55% women in India is 29% at mid-level executives in China is 21% which isn't great but it's an awful lot better than the 9% in India making sure we have the policies and to capitalize on the talent pool the second is to capitalize on international talent to fill the gaps making sure we have policies that make it easy for companies to bring the required skills whether it's on a temporary or permanent basis as individuals and also for their families creating the right ecosystem of allowing international schools the contrast between say a Shanghai where there's a multiplicity of international schools and a Seoul where there's very few makes people's choice very easy in many instances when they're deciding where to live the third point that I would pick up on is support in the education system for developing an innovation mindset and critical thinking particularly when we're emerging from an education system that emphasizes a lot of rote learning creating not a complete institution but perhaps something in parallel that allows and the experiment in Shenzhen of launching one of the first Chinese private universities outside of the national is an example of that right now and then finally, I think it's important not to forget when we talk about talent development and mobility looking after second and third tier cities it's very easy for policies to end up sucking all of the talents into the Beijing's and Shanghai's to take a particular challenge that China has today yes, you can put incentives out there to help encourage multinationals to invest in the second and third tier cities but in some ways the big challenge today is keeping the private Chinese companies. I spent time this weekend with the leadership of a multi-billion dollar private Chinese company that's headquartered in a top five city and the subject of conversation is do we have to move our headquarters to Shanghai to keep the talent and that's bad for China, it's bad for the city and I'm not sure it's actually great for Shanghai if everyone gets sucked in there as well so maybe I'll just stop there at this point, thank you. What I'd like to ask the group is whether it actually continues to make sense when we think about competitiveness in terms of individual countries or are we moving to a time when we have to think much more about competitive regions and much more cooperation between neighboring countries to create an environment that is more conducive to business. Any thoughts on that? Where I come from again, ASEAN we are 600 million people GDP of one trillion growing middle class and every income every GDP growth of five, six, seven percent we have been talking more and more in terms of a group and I think this is a very important point although it takes a while for us to graduate because we have to promote our own countries which is very important we all come from different countries and the number one priority will be our own country but where we come from we're beginning to think in ASEAN terms if ASEAN is becoming a more competitive region and by the year 2015 when we achieve what we call the ASEAN economic community we're going to be even more competitive and what's interesting is that we're beginning to attract attention of two sets of countries and also companies on one hand countries like China and America and Russia and those powers and world they're dealing with us because they're dealing with us because they're dealing with us because they're dealing with us because they're dealing with us because this is a force to be reckoned with so countries so to speak knocking in our doors to engage with ASEAN so this is a manifestation of how relevant regional groupings has become in the last few years secondly of course companies in the country but now they are looking more and more in terms of 600 million people growing middle class and also bigger GDP so it is certainly relevant where in our part of the world regional groupings we're beginning to think more and more in terms of regional groupings the challenge of course is to make sure that we get there in 2015 we are going to create this ASEAN economic community but we are all committed all of us in ASEAN I am trade Minister Malaysia for example we meet on a very regular basis and we do monitor progress in terms of achieving the goal of creating an ASEAN economic community therefore I would agree with you that in the part of the world I come from this is becoming more and more important and more relevant we've been recognised by countries and also by companies how much you can benefit from your region also being competitive and there's absolutely no doubt that if you're part of a competitive region like Denmark is part of the EU you can become more competitive and I think there's a number of reasons for that but one interesting reason is of course that there's also a peer pressure to be amongst the most competitive in the world I mean I shouldn't bore you with a relationship between Denmark and Sweden for example but one always want to be better than our neighbour so it's a very high pressure and a good pressure as well to have that competition within countries we measure ourselves in terms of the competitiveness in Germany, in Sweden in the UK and this is important to us but one thing I'd like to say because it's so fashionable in Europe right now to blame everything on the euro as such and I think one lesson that we have learned from this euro crisis and the European crisis is that countries matter and what you do in a country in terms of structural reforms tightening your budgets becoming more competitive it does matter so one thing we have learned is that we can't blame the crisis on anyone else we have to take responsibility responsibility ourselves so by saying that I'm also saying that even in a region like the EU you see vast differences in our competitiveness because we have realised that what you do within each country actually matters I think it makes a lot of sense in many ways for integration to take place in the part of the world I come from in East Africa the African community comprising of five countries coming together with a corporation of 140 million people we have found that this is a very interesting relationship however complex it is more beneficial in terms of real economies of scale where there is even depending on the level we have started from each individual country within that region together we can overcome certain challenges by being together rather than by each handling our challenges individually or separately and this does not take away responsibility for each country to work on its competitiveness but it's also the aggregate of that that makes the region competitive we have found that coming together, working together makes it easier for example to build infrastructure that serves the whole region we resolve many of these challenges together as we maintain and keep building the competitiveness for the region we also work on the competitiveness of each nation as a constituent part of this larger area so we have found I think this is the best way to go and also that's how companies work across this region and beyond even in terms of trade and other activities we found having made it easy for people to operate within this integrated space it makes it easy for everyone and very beneficial several of you mentioned creativity is being important in the competitiveness challenge but how do you actually stimulate that or does it just have to happen spontaneously are there specific measures you can take to make a place a region, a country more innovative and creative maybe you could start by giving one example from this part of the world that I think a lot of people look to if we go to Taiwan and we talk about this we have a new science park which is now home not just to two of the world's greatest semiconductor companies but 400 or 500 additional companies that cluster around it this came out of a public-private partnership to create an innovation hub in Taiwan in technology where the government set up ITRI and ITRI went out and imported not just engineers and talents it went out and bought intellectual property and brought it into the country and made it available to those startups and then yes it provided some incentives but I think most importantly it provides a completely transparent and efficient business operating environment one stop government access with it within the park quality location and facilities close to the airport and then it just created this domino effect of clustering over time wrapped around it clearly a respect for intellectual property as a prerequisite for encouraging people to shift from being dependent on the government providing the intellectual property to companies and individuals creating their own just one example but clearly I think there are multiple in the region that have worked one challenge we have in developing countries is to improve collaboration between universities and industry and this is where the Swiss and some European models have been very useful and as a matter of fact we're using that as a benchmark this is something that we've not done too well and we believe by improving this collaboration between universities and industry and in the process also encouraging entrepreneurship this will be very important to encourage innovation innovation we believe is central to this whole issue of competitiveness in fact it is probably the most critical element and it's got to do with the mindsets it's got to be culture of learning in schools and it's got to start from young from preschool and schools and universities so that that's a challenge for all of us and in our view rankings have been very useful we follow these rankings very closely it affects the debate in my country as to what needs to be done what further reforms will be done but I just want to share with the panel that in our view this is critical innovation is critical and the need to improve collaboration between universities and research institutes and also companies that's something that we can emulate from some of the countries in Europe maybe as I was as Switzerland specifically mentioned I think probably the most important thing is actually the whole schooling system and the good university and then specialized school system as we have for technological issues this has been attracted a lot of foreign years coming the best actually coming to Switzerland and then staying there also for a few years and continuing to work in the country the second is of course the good cooperation between academia and industry and this has been working very well it is also a little bit supported by the government because we support projects we have a commission supporting projects done by both and the business which is the cooperating part just pays part of the contributes to the cost of the project but it works very well and last year we had a lot of new projects in the middle of the crisis people said we have to do something otherwise and it was very the objective was very strong to be strong in that the other one is also that we tend to see government as doing basic research but applied research is done by the company so we have a clear cut there and finally big firms and SMEs cooperating together big firms usually have the money but small or very small firms usually and this is you know 98% of companies in Switzerland are working with big firms and they have a lot of big companies and they have a lot of big enterprises there usually a lot of creativity is in these companies and so the cooperation of both works very well and is also what we think one of the strengths of the Swiss innovation I would like to go to the audience now to see what questions you have there are mics please wait for the mic and keep your questions two questions one first of all admiration for Switzerland and Denmark in spite of high taxation they have proved to be so competitive and both the ladies gave very valid reasons if you keep the question short question is you said that in Denmark you are targeting to take it from well to top 10 so what are the one or two things you will do so that other countries the question is for president Kaga a very simple question a landlocked country may have challenges in manufacturing will the right competitive strategy be to focus on services like IT just a thought I will have your view thanks very much that's an excellent question I think we are moving from 12 to 10 I became the leader of my government a year ago I think one of the things that you get measured on in Europe these days is your capacity to take decisions and in terms of structural reforms of your economy and what we have spent the last year doing is taking decisions on structural reforms we have made a tax reform we have made an early retirement reform we have adopted many reforms that will change the economy one of the things that will put some Europeans countries apart is their capacity to take decisions and then they will move into a different league and I think with some of the decisions that we have taken this year we are moving up there for next year landlocked countries and IT yes it's true our country is landlocked so we have had to make certain choices in terms of developing in investing in high value products but also focused on IT and services thereof in fact that's what explains the area point that was being discussed of the value of bringing together academia private sector companies and government we have around this for example established special zones where to give you a feel of that we have a partnership between one of the outstanding universities in the United States coming to Rwanda operating in that zone developing our people to have certain capacities and along that we have been able to attract certain companies to come and work around that high institution it is with Rwanda specifically targeting IT and other areas of technology and we found companies are coming in to invest with that and the government has had its role in facilitating that to happen so that is all to meet the challenges of landlockedness thank you it's still in the back thank you Mr. Chair my question is for Mr. Huang last year if we look at top 100 the profit margin is slowed down so we would like to get your opinions on some development trends Mr. Huang I think I think private companies in China they are suffering from a smaller and smaller profit margin this is a general trend all companies in China if we compare Chinese companies with other similar companies their profit margin is actually the jobs in the profit margin is actually not that big and last year we have experienced we were experiencing some problems some financial institutions they have a super high profit margin some financial institutions on the balance sheet 50% of the profit margin of private companies are actually earned by financial companies so and also some monopolized sector they also enjoy a very high profit margin but other private companies had really difficult time last year so I think in the future we are going to see a few couple of changes so things will be different perhaps abnormally high levels of profitability for many Chinese institutions in the last few years and the financial speculation that many private companies have undertaken boosted their profits but underneath the surface their profits were lower and they were benefiting from a super normal period of growth when capacity in many industries was lagging behind demand and now it's getting into reverse it's payback time I want to ask my question is for Mr. Huang two questions first one now we have more and more multinationals to relocate their manufacturing center to other countries in East Asia they believe that Chinese is China is now losing its manufacturing center and some of our scholars believe that this is a necessary process for economic transformation what would be your view on this second the policy paper used by Central Government to encourage investment in SMEs or private companies by Central Government why this policy paper is not that effective first thing first question I think if we look at national competitiveness in the globalized world each country needs to locate precisely its unique strength to improve its competitiveness if you fail to identify your own unique strength and that you probably will not will fail in the global market so over the past 20 years China made a China identify its unique strength and now China is becoming a manufacturing center for the whole world so for those low profit market manufacturing sectors they are going to shift their centers to other countries this is a very normal phenomenal process but I believe China is a big manufacturing center we still maintain its unique strength in the long run although we have a certain working labor cost but over the years China managed to accumulate a very comprehensive sophisticated manufacturing system and supportive environment so China still has its unique strength maybe in Vietnam you have a cheaper labor cost but maybe in developing in Vietnam they don't have our supportive systems for manufacturing activities of course in the future China is transforming its economy focus on labor intensive and labor intensive to shift on to other sectors so I think in the next 10 to 20 years China is going to build more pillar industries in Chinese economy because every year we have 6 to 7 million college graduates and we have more than 50 million researchers and scholars so I think with this kind of help we are going to successfully transform our economy Thank you, I'm David Cameron Member of European Parliament East of England including Cambridge I wanted to ask the panel about the impact over regulation I'm a great respecter of Denmark and it's good to see the Prime Minister here but the EU as a whole I believe is wholly over regulated the commissioner responsible So let's go to the question about the importance of government can there be too much government So we start with Denmark I think it's hard to argue that you have too much I mean of course there can be too much regulation but if you look at my own country you have a tremendous amount of regulation in terms of health and safety in terms of environmental standards and other legal framework and I would actually argue that during the times where we have had high regulations in terms of environment what the Danish companies have done and I see some of them present here today what the Danish companies have done is to invest in research and development so that they can live up to those high standards in terms of environment and energy efficiency and the situation today is because they had to live up to high standards they are highly competitive at the global market today and I think this is a very interesting story where you regulate and actually push the companies in a positive way so they become more competitive at the global market you could say the same for food safety we have a very high regulation in terms of food safety and there's no chance that now we have agricultural producers and agricultural experts in food safety operating here in China because this is exactly the type of product and the type of knowledge that they're interested in now so I think you shouldn't be too scared of regulation I think some good things can come of it because you can create you can be cutting edge in your business and use that as a business opportunity Yes, really what some of us meant by regulation was nothing to hinder good progress in terms of innovation or entrepreneurship or doing business it's a regulation in terms of enhancing high standard and quality and also setting the ground to the point that when people come to do business in a place where they don't know what to expect and what one expects is what the other expects but in terms of doing business they are as free to do that and definitely they will benefit more from how they have done where in terms of what they needed to do but regulation did not mean in any way hindrance or an obstacle to freedom to operate but it's just simply to enhance quality and standards and create predictability in the area you are operating in Thank you I'm Annette Nays from the China-European Business School, CIBS I have a question on the change in the competitive rules of the game because the economies are transforming and the new economies who are fast growing have a different balance between the state and the market so there might be a different business environment in a decade from now how do you see that and who are better placed, are at the western or the new champions in this new business environment with a different state and market balance That was going to be my final question for the panel but thank you for asking it now looking at the crystal ball how has the landscape put a change in 10 years? It is a very dynamic process the balance between state and regulation and deregulation but moving forward we have to move on this journey of less regulation of course as mentioned earlier there is this regulation which has a positive impact but having said that I think let me comment on the regulation which results in imposition of non-tariff barriers and which will be protectionist in nature that will hinder trade those are not the kind of regulation we are talking about back to this balance between state and the market in our view this journey towards deregulation and more freedom of the market is something which is unstoppable therefore although there will be ups and downs role to stay rebalancing all this trying to do some physical repair here and there but in longer term in our view it is almost inevitable that to be comparative we got to allow market forces to dominate the scene and the governments get out of business and be less and less involved in business activities that's the way forward this what we see now in other words is a temporary aberration is a dynamic is a result of some political and other factors but in longer term we have to move firmly in the direction of less state intervention other views into the crystal ball how will the competitive landscape look 10 years from now I would like to say a few words I think market and regulation should be different in different countries for China for example we're having this market economy but we didn't have too much experience on that so now our major task is to fully use the market for also the government's interference to be gradually faded away and market economy has already been existing for many years the government is going to interfere the economy so you can see these are two different trends so we cannot just generalize that whether the government interferes or not it depends on the real situation of a certain country and the level of interference would be very different in different countries but anyway general speaking market should play a very important role dominant role one thing is for sure you can't take the state up with the equation to talk about competitivity one of some of the things we've discussed here today is that competitiveness is created by investing in people it is having an efficient society with a legal framework that works by investing in infrastructure by investing in equal opportunity and having investing in innovation which is based on what you do at home but also a global outlook and listing all these things I think it is clear that you cannot achieve all these things if you have a completely passive state you need a good combination I think the market should work as it does best but you have to have an active state that invest in all these things because these are the things that we have to compete on in the years to come well I would absolutely agree but I think the of course the path is towards more and more market economies everywhere in the world we need a state which gives the rules of the game because even a market economy can go out of hand so I think this is what actually the role of the state is is to do enough regulation not too much but the right one and what for instance we do is when we have a new regulation we look at the cost for SMEs and in every proposal to the parliament we have to explain why the cost is what it is and why it is necessary and why it is more cost then they become less competitive which makes the whole country less competitive so it is always a little bit a balance but in the end I'm sure that every country has to find its own balance between both I'm from China's economic weekly I would like to ask Mr. Hong what they are not do you think because they own economies reform will be good for the market economy and will become a major critical factor for the economic recovery of the world state owned companies reform is the major reform and China's economy can develop to today because we have done a lot of work for the state-owned economy and non-state-owned economy in the same process but now the SOEs are faced with some new challenges because we are transitioning or transitioning our economy not only for the non-SOEs but also for the state-owned economy to a large degree the SOEs should utilize its competitive advantages in order to better transform so I think there should be a certain potential for state-owned businesses on the business in China but in some of the areas China's state-owned economies should be privatized so my thinking is the state-owned companies should be capitalized and the government should control the capital we only have a couple of minutes left so I'd like to end by asking everyone on the panel to really think about the future and how long will it take for those 10 years 15 years for some of the developing Asian and African nations to break into the top 10 or top 15 ranking of competitiveness how long will it take before China or some of the other Asian neighbors really moves up the ranking or some of the African nations how long will it take your view it's hard to say I cannot China by 2020 China will become a later country as an innovative country it has to be at least approaching top 10 in terms of the ranking if not to top 10 already it's all decided by the transformation of China if in the future 10 years we can successfully transform our development pattern our economic and our economy I think we can achieve that but for a lot of other developing countries I think it's very difficult for us to catch up with the western developed countries especially for the large economies well I don't need a crystal ball because if the Chinese are saying that China will be in top 10 in 10 years I'm sure that this is true and I'm sure that will happen because this is how things happen the Chinese get to where they want that's how I see it but I do think a lot of things will change one of the most interesting moments in this debate was when someone asked from the floor is it not horrendous that manufacturing jobs are leaving China where they have lower salaries and lower regulation and the reason why I think that is interesting is that exactly the same discussion that we have at home where one is saying isn't it terrible that jobs are going to China and we are losing the manufacturing jobs I think that is something in this for all of us and I think the globalised economy if we manage to reform ourselves and be at the edge of where we should be we could all strive in the new competition also some of the countries that have a longer way to go thank you and your view about Africa Africa has a chance but we need to work very hard towards that there is no doubt about it because if you look at even the recently put made report by World Economic Forum the case of Rwanda I am sure many countries can do it even better Rwanda which was at 70 in terms of positions moving forward 7 places to 63 now out of the 140 countries that were surveyed now if we we work harder we can keep moving closer to that point but I imagine and in Africa for example this year as you know three top countries one was South Africa evidently the other was Mauritius the third was Rwanda so the other countries are working on competitiveness as well and it's a question of focusing and working hard to achieve that so I think in 10 years it's not exaggeration that some of the countries will reach in the next 10 years very high levels the question is who they put them back again if everybody becomes more competitive it might not be so terrible to be only number 15 but of course this will depend on that the race to be at the top of the table is going to be more and more intense I think it's good for the world countries are going to be more efficient more productive they're going to be more innovative they're going to be more prosperous so it's good for the world and as far as ASEAN and Malaysia is concerned we have a goal to be top 10 and to do that we have to reform our education we've got to be innovative we've got to engage in entrepreneurship and we've got to create all working hard in the next 70 years to be there we talked about talent being the key enabler on the piece of rankings of how countries do an education China in bracket Shanghai came out number one last year and I suspect perhaps if you did China bracket Shanghai on competitiveness as we've been talking about today it might be in the top 10 today but with that emphasis on talent I'm pretty confident that in the next 10 years yet China and maybe some other Asian countries will reach the top 10 fantastic thank you all very much thank you for a great audience