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Www Subprimemortgagemorgage Tag Education Family Subprime Mortgage Mortgage 主旨演讲：金立群（Keynote Speech：Jin Liqun）

Www Subprimemortgagemorgage Tag Education Family Subprime Mortgage Mortgage

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　　 The financial tsunami has not only sunk some of the time-honored and prestigious Wall Street firms or forced some others to take cover under the umbrella of government rescue programs but has also dealt a heavy blow to the financial sector as a whole. For all the aggressive measures taken by the U.S. government to bail out Wall Street and Main Street, the devastation in the short term is inevitable with millions of jobs lost and consumer confidence smashed. Consequently, the United States, Europe, and Japan have slipped into recession. (Inaudible) only effect on emerging markets in developing countries, including some impoverished nations, is most palpable and painful.

　　 In a globalized economic eco system, all the species are vulnerable to some sort of virus. This makes it all the more important for all the members of the international community to make concerted efforts to improve the sustained immunity and work in close collaboration to tackle the contaging effect in case of an epidemic.

　　 Over the last three decades there have been major crises with a frequency of about every 10 years with minor ones occurring every three or five years in between. Strange enough, the world has consistently been caught napping. There are usually signs of trouble, but they are not perceived to warrant any government intervention in a free market economy. Not until the crisis erupted did the decision makers rush to conference rooms and put together rescue packages. It's certainly tough to decide on rightful timing -- on the right timing for any intervention. Perhaps vigilance on the part of the (inaudible) watches, the economists, and the decision makers should be sharpened. This is lesson one.

　　 Now, this reminds me of the debate on the issue of decoupling or uncoupling of the Asian economies from G-3 about one or two years ago, and I was still with Asian Development Bank. It is generally believed at the time though Asian economies will not be immune to global slowdown, neither will it be hostage to it. The judgment is based on increased integration of Asian economies, particular East-Asian economies, and the continued deepening of the Chinese market. Nobody would deny that China and other developing countries could be less dependent on the growth of G-3 if they get further integrated among themselves. But still the Asian economies are just a part of the global economy, and their integration, whether in goods market or assets market, has to be inclusive, not exclusive of the rest of the world economy. Furthermore, the Asian economies will need to restructure the economies and develop the demand in the domestic market. That takes time.

　 In good times, there's little incentive or urgency to do that in most cases. The restructuring has remained at best a blueprint on the drawing board of many governments. This crisis is expected to promote economic rebalancing in a number of Asian countries. With hindsight, when the sub-prime mortgage meltdown started to take its toll of the U.S. economy, the rest of the developed world and emerging market economies in other developing countries, Asia should have been prepared for something big in (inaudible), and they would have found themselves in a much better, comfortable position if they had had Plan B or even Plan C when the market was turning quickly downward earlier on in 2008. Instead, very little was done in time to deal with the potential downturn of the economy.

　　 Let me tell you the debate on the board of the World Bank. The Chinese executive director said she did not believe in uncoupling or decoupling. Her view was echoed could only by the next Mexican chair. The rest of the world top-notch economists all said decoupling or uncoupling is the trend. I'm the third-class economist, and fortunately I was right this time.

　　 Now, the euphoria that Asian economies would continue to do fine was a theme song which we heard about one or two years ago. Some multinational, multi-development institutions have revised downward Asia's growth three times last year, and that says a lot. This certainly illustrates the inherent difficulty of economic forecast in a volatile period. This also dictates the prompt actions required to address the challenges of the roller coaster nature.

　　 China's calendar of 2008 recorded dramatic shift in focus of the macroeconomic policies in 2008. The January of 2008 ushered in the policy of controlling inflation and overheating, which gave way to the policy of maintaining growth and containing inflation by June, which in turn was overwritten by the new initiative of proactive fiscal policy in a properly expansionally monetary policy in November.

　　 And finally we have the stimulus package was four trillion Chinese yuan. Nevertheless, the stimulus package is timely and is being implemented with close attention to the quality of investment. The social programs, environmental protection, the reform efforts feature prominently in the stimulus package. I personally believe that an 80 percent or even higher growth rate is achievable.

　　 Properly fast economic fast economic growth in China is not just good for China itself but also important for the rest of the world. At this moment, China is faced with challenges, perhaps of a different kind. It is always much less of a problem to spend more of your own money than to borrow more when you're already deeply indebted, but for China the crucial matter is to improve the purchasing power of the rural people -- 750 million strong and with 200 million migrant workers. That is probably the key.

　　 I have followed very closely the economic stabilization program of the U.S. administration. The extraordinary measures taken by the U.S. government are entirely necessary. I think that the general public in this country is appreciative of the need for government intervention. It is expected that some people will criticize the specifics of the rescue program or the sequence of actions taken to contain the crisis. The fact is -- I'm not defending the U.S. government -- the fact is that the sheer force and the contagious nature of a major crisis will not give any decision makers the luxury of a well-thought-out master plan detailing each and every step of the rescue efforts that could respond to the multifaceted dimensions of the crisis efficiently and effectively. Under tough times, the role played actively by the U.S. government is crucial in restoring market confidence. And the Chinese premier put it, I think in New York, "Confidence is more valuable than gold," g-o-l-d.

　　 There shouldn't be any doubt about the resilience of the U.S. economy. It's broadly believed that transfer of power will be smooth. The American people will work together under the Obama administration to tackle this issue, this crisis. Although U.S. is faced with daunting challenges on many dimensions, its economy remains the largest with ample wiggle room for maneuver. With effective implementation of economic stabilization program, the U.S. economy will recover and be on the right track again once again. Good luck to you.

　　 This crisis should (inaudible) argument for a laissez-affaire capitalism. But it doesn't mean the demise of market economy. Market economy is most efficient in resources allocation. Market economy has fundamental principles which are sound. What is important is improvement in a regulatory system. The crisis speaks volumes for the horrendous costs of a market failure. It is now all the more convincing that the market is not perfect and that allowing the market to go free-wheeling is a recipe for disaster. The government must see to it that market failures are identified as soon as they occur and be addressed without delay. No regress, monitoring, and regulatory system can substitute for good governance at the corporate level. As Chairman of the Supervisory Board, I'm working towards further improving the governance framework and the risk management structure in China investment cooperation.

　　 The current crisis offers us most valuable lessons, both positive and negative, about management of a company. Behind the debris of collapse deference, I could see the destructive factors that work in most competitive companies to ruins. Too often we see a talented and experienced manager build up a company all the way to celestial status and then become so cocksure that he will follow nobody's advice but his own basic instinct only to see his empire unravel in his own hands. The destructive force is a letasemoir mentality. The failure is due to absence of sound governance, corporate governance. As I see it, it behooves the supervisor board of CIC to up the ante in enforcing sound governance in our company.

　　 The government of China and the United States have stayed in close touch during the current crisis. The leaders talk frequently on the phone. At the invitation of President Bush, President Hu Jintao attended the G 20 summit in Washington, D.C., at the end of last year. In December, the 5th and 6th U.S. China Strategic Economic Dialogs -- SED -- were held in Beijing and Washington, D.C., respectively. The Chinese government has reiterated its willingness to cooperate with the United States on many occasions.

　　 Finally, a couple words about CIC. We are open, and we take the United States as one of the best partners. Thank you very much.

　　 MR. SHEN: Thanks for your excellent speech. I think from your speech I can have a few messages from that. One is that Mr. Jin is confident about the Chinese government to manage the macro economy while it stays open, so China will continue to reform in order to deal with the challenges due to global slowdown.

　　 And, secondly, Mr. Jin also emphasized that decoupling is yet to come. If emerging markets are having Plan B or Plan C, then they may be able to deal with prices better, but not yet. I mean, we are still waiting for more thoughtful plans to really deal with the crisis at the moment.

　　 Lastly, Mr. Jin is also confident about the Chinese economy. The Chinese economy can grow above 8 percent probably this year. The number we just had from last year was around 6.5 percent -- almost is the lowest in the past two decades -- but probably the economy could recover second half of this year partly because of the government rescue plan.

　　 Mr. Jin, I will ask the first question, then I'll open the floor to the audience. I think you mentioned that, you know, as the Premier Wen Jiabao said, the confidence is more valuable than gold. But I also believe that confidence comes from some structure, the policies, right. We needed to see physical directions of policies that can lead us to more a more confident world. But, you know, from the policies that we have received from the United States or from China's side, most of the current policies are addressed and they're needed to (inaudible) to anti-cyclical movement, but I think many of them failed to address the needed -- for structure changes. Or some people may criticize that. The governments is stabilizing the economy at the cost of future large adjustment, right, so how can we reconcile just two different aspects and -- so that we can gain more confidence about government policies?

　　 MR. JIN: You know, my name in Chinese means gold, g-o-l-d. I'm very happy to see prices going up all these years, and I was very much depressed when the gold prices went down.

　　 Confidence means you are -- you can do something which would be good for yourself, for the community, and for the economy as a whole, but most important I think confidence can help you to do something countercyclical rather than procyclical. But your question is whether any government can put in place a policy which can solve all of the problems -- current problems, future problems -- at one go. The answer is no.

　　 For instance, at this moment I think the Obama administration is faced with a tough issue of dealing with the excessive consumption, okay, serial saving or (inaudible) saving on the one hand, which I think is a big problem; and on the other hand Americans will have to save now to save your economy. Are you going to solve the problem now or the problems which will be five or six years later? I don't think it's possible. For Americans to shift to a different kind of life it takes time. Just like a doctor when you have a patient. You want to cure the patient with kind of a strong dosage which would kill the patient right away. So, don't do that. Don't do this kind of thing which is procyclical.