Keynote Dialogue: How can China and the United States rebuild mutual trust to address global economi

May6day,The Tsinghua PBC School of Finance Chief Economist Forum is themed "2023Global Financial Turmoil and Economic OutlookThe forum, themed "Finance and Economics Research at Tsinghua University's PBC School of Finance," was held at the Tsinghua University PBC School of Finance. This forum was hosted by the Tsinghua University PBC School of Finance and co-organized by the Tsinghua University PBC School of Finance International Finance and Economics Research Center.CIFEROrganized by [organizer name], combining online and offline methods, with live streaming in both Chinese and English, and shared globally across the entire network.

Keynote dialogue sessionProfessor of Tsinghua University PBC School of Finance and Director of the Center for International Finance and Economics(CIFER)directorJu JiandongHost, andMorgan Stanley's Chief Economist and former Chairman of Asia, Senior Fellow at Yale UniversityStephen RoachDean of the Institute for Chinese Economic Thought and Practice, Tsinghua UniversityLi Daokui,At once“Lessons from the Japanese Crisis for China's Economic Growth”The issues were discussed in depth.

During the discussion,Stephen Roach proposedA secretariat should be established between China and the United States to coordinate communication and mutual trust between the two countries. Experts from both countries in the fields of economy, trade, innovation and policy should be selected to cooperate, exchange views frankly, jointly formulate major agreements in relevant fields, and maintain regular communication.Li Daokui believesArtificial intelligence regulation presents significant opportunities for cooperation between China and the US, a challenge shared by both sides. Regarding how China could initiate the formation of an "Asian Community,"Ju Jiandong said,The key to the "Asian Community" lies in the WTO's non-discrimination principle: zero tariffs should be available as long as there is no discrimination in the technology market, and the dynamic changes of member states must be guaranteed. Regarding how to stimulate local governments to develop the private sector,Li DaokuiIt seems that the government should reduce the differential treatment between state-owned enterprises and private enterprises, which is key to protecting the private economy.

Keynote speech notes:

Global financial turmoil and changes in the world order

Stephen·RoachLi DaokuiJu Jiandong

Next10For about 10 minutes, we and Stephen·Mr. Roach will conduct the dialogue session.

Ju Jiandong:Stephen·Roach, please give your feedback on the keynote speech that just took place.

Stephen·Roach:All the previous speeches raised very important issues. Zhu Min raised volatility, which is closely related to my views, namely the policy decisions of the Federal Reserve and other central banks. Although our wording differs, I feel this volatility is somewhat unexpected. Li Daokui may be more optimistic about the Chinese economy. You also raised a very important point: although the labor force in China is declining, the improvement in the quality of the labor force can compensate for this. Undoubtedly, China's massive investment in human capital, especially in education, could be a very important compensatory factor. But I think it's difficult...onlyRelying on improvements in the quality of the workforce to offset quantitative declines, especially if government policies continue to support inefficient state-owned enterprises and the regulatory environment is fraught with uncertainty, will reduce support for the private sector. Therefore, you have indeed raised a very important point, particularly regarding measuring growth from a quality perspective.

Finally, and this is a point raised by our host, the conflict between China and the US and great power competition have indeed brought enormous challenges and affected world stability and peace. My personal feeling is that we need to pay more attention to the ways in which the two countries engage and rebuild mutual trust, which is currently lacking. Moreover, I believe this is also a necessary condition for coexistence, as you emphasized. All these remarks have been very insightful, and I am very grateful for everyone's views. Thank you.

Ju Jiandong:Thank you, Stephen.·Luo Qi, Li Daokui.

Li Daokui:The two things Ju Jiandong mentioned are very important. One is the Asian Community, in fact...RCEPIt's already out. Asia is divided into three parts: the first part is China, the second part is Southeast Asia and ASEAN.6A unified market has already been formed with hundreds of millions of people, and we have already done it with them.RCEPNo major problem. Third, Japan and South Korea, as you said, are very important. We must make things clear to them regarding the chip issue. I completely agree with that.

My second response concerns artificial intelligence. The severity of artificial intelligence is even more serious than you described. It's not just about technological elites ruling the world; eventually, machines will rule the world, and even the technological elites won't be able to rule anymore. This issue needs to be clarified. Many technological elites thought they could create a machine and rule humanity through it, but they ended up being ruled themselves. This is equivalent to nuclear weapons. This is the common enemy facing China and the United States. As long as China and the United States have a common enemy, many things will be easier to handle. We shouldn't be enemies. I believe that the situation you described is more serious, and the possibility of cooperation is higher. These are my two comments.

Ju Jiandong:Thank you, Li Daokui. As Mr. Roach just mentioned, the first thing China and the US need to do is restore trust. Restoring trust involves addressing common challenges we face, which both Mr. Li Daokui and Mr. Roach have mentioned, as everyone knows.climate changeClimate change is a challenge, nuclear proliferation is a challenge, controlling viruses is a challenge, and now there are new challenges, such as preventing global financial turmoil, which is a very, very important challenge, as Li Daokui just mentioned. Furthermore, Li Daokui repeatedly emphasized the challenges facing humanity...AIThe question of where technology is headed can enable both China and the United States to set aside their geopolitical conflicts and confront the common challenges facing humanity, thus propelling human society towards a healthy stage of development.

Due to time constraints, our first dialogue session ends here. We will now open...On-site issues。

Question 1:Thank you to the mentors and guests for their insightful presentations. My question is for Mr. Roach: Could the US-China Secretariat tell us who he hopes will participate, whether this mechanism will be effective in the future, and about various aspects such as the loss of trust and rebuilding trust? Thank you.

Question 2:I would like to ask Professor Ju Jiandong: The scope of the Asian Community certainly includes a large area from Southeast Asia to Russia to the Middle East and Central Asia. My question is, if we were to include Southeast Asia in this scope, which means that China is establishing a certain economic community concept with Southeast Asia, would this bring about a significant backlash from the United States in terms of international politics or geopolitics? This may be related to some issues in our southeastern region.

Question 3:I have a question for Professor Li Daokui. I agree with the US-China secretariat, the Asian Community, and artificial intelligence. My biggest concern right now is how China can stabilize economic growth, because that's a current issue, while that's a tomorrow issue. We're facing today's problems. In this setting, I'd like to hear Professor Li Daokui's thoughts on how to unleash market potential and stimulate the momentum of private enterprises under the current circumstances, and how the government should cooperate or what it should do. I've seen recent central government meetings discussing boosting the confidence of private enterprises, how to solve employment, financing issues, market fairness, and so on. However, many central policies often deviate from their intended implementation at the local level. Professor Li Daokui, you must have done a lot of research in this area. I hope you can give us some suggestions and ideas.

Stephen·Roach:about“US-China Secretariat”In my new book, I have introduced the functions and governance structure, but to briefly respond, I would like to say that in my view, the members of this secretariat should largely be invited to participate as professionals and experts from a very wide range of different professional fields, especially experts in areas such as China-US relations, economics, trade, innovation, technology, and policy.

Today we've actually discussed many of these areas, including global health, climate, and cyberspace. We can invite experts in these fields—of course, they must be professionals with excellent education. Additionally, we can invite practitioners in areas like diplomacy. The membership should be balanced in terms of professionals from both the US and China. This is just a concept, presented for your consideration. I would describe it as a relational think tank, empowered to evaluate existing and new agreements and resolve disputes arising during their implementation. But I want to emphasize that, most importantly, this is a collaborative institution. I don't think the Chinese team should work alone, and I can't imagine the US team doing only their own thing in such a secretariat. In my view, such a secretariat must be a collaborative platform, dedicated to solving problems. For example, it could write policies and white papers, with both sides working together, not just one side writing alone or the other only writing.

Both the Chinese and American teams are composed of professionals who can work in a neutral environment. They work together in the same building, coming to work in the same building every day, and becoming increasingly familiar with each other. This working model can rebuild the collaborative relationship between these professionals, and such a relationship can be based on trust.

So, there are actually many details regarding my suggestion; what I just said was merely a supplement. Thank you.

Ju Jiandong:The second question was directed to me, and I'd like to raise a few points. First,WTOThe rules are considered by all countries to be the most successful and helpful to world trade rules since World War II: non-discrimination, free trade, transparency, and fairness. All China is asking for is...WTORules and non-discrimination—you shouldn't discriminate against me or try to contain me—should be supported by all countries in the long run. Of course, some countries, like South Korea mentioned earlier, want to contain China's technology, but there must be a cost to doing so, and they must abide by the rules.WTOYou can enter the Chinese market if you follow the rules, but you can't if you don't.WTOIf the rules are violated, the Chinese market may be lost. For example, you may not be able to enjoy zero tariffs, and you may have to enjoy relatively high tariffs. Under such a system design, I think these countries and economies can make choices according to their own rationality and their own national interests, and it is dynamic. This is the first point I want to make, to make such an explanation.

Another example I'd like to mention is the Asian Infrastructure Investment Bank (AIIB). When we joined the AIIB, we thought that not many economies would join, but who was the first to join outside of Asia? The UK. The UK was the first to join.

Li Daokui:Very quickly. You asked an excellent question: how to stabilize growth and how to encourage local governments to protect and support the private sector. I'll discuss a theoretical issue and offer some practical suggestions. The theoretical issue is that we need to thoroughly clarify a misconception: the private sector, unlike the state-owned sector, is not the foundation of the ruling party's rule. Everyone keeps saying that the foundation of the ruling party's rule is the state-owned economy—we've heard this a lot, this understanding has been around for a very long time, but I think it's problematic. All legally operating economic entities, by abiding by the law, are fundamental to the ruling party's rule. Look at any enterprise, whether private or state-owned, as long as it makes money…25%It belongs to the government, the government25%Automatic shareholders, even if you don't make money, will still be charged turnover tax. The government is the legal super shareholder of all legally operating enterprises, and of course, it is the basis of governance. This is a theoretical issue that needs to be resolved.

Once this problem is solved, many things will be much easier for us.

As for how to solve this problem in practice, it might be necessary to go to extremes. We already have the State-owned Assets Supervision and Administration Commission (SASAC) for the state-owned economy. Someone suggested this, though it wasn't me, but I agree: why can't we establish a Private Assets Supervision and Administration Commission (SAIC)? If the SASAC and the Private Assets Supervision and Administration Commission are equal, many things will be easier to handle. The issue you raised is very important and should be addressed both theoretically and practically. It shouldn't just remain a matter of addressing the issue in rhetoric. Thank you.

Ju Jiandong:Thank you, Professor Li Daokui. Due to time constraints and the fact that this has been a very insightful discussion, we will conclude our session here. Let's give a warm round of applause once again to thank Mr. Luo Qi and Professor Li Daokui.