Transcript: CCG VIP luncheon on global development cooperation & China's role in it

Scholars from Tsinghua, Peking University, and children's right NGO leader shared insights on capacity building, development finance, and legal reforms.

On September 15, the Centre for China and Globalisation (CCG) hosted its latest CCG VIP Luncheon themed “Global Development Cooperation and the Role of China.”

The featured speakers were

• David Qingzhong Pan, Executive Dean and Professor of Schwarzman College, Tsinghua University

• Xu Jiajun, Tenured Associate Professor and Executive Deputy Dean of the Institute of New Structural Economics, Peking University

• Tong Lihua, Director of Beijing Zhicheng Law Firm, Director of Beijing Children’s Legal Aid and Research Centre, Director of Beijing Zhicheng Migrant Workers’ Legal Aid and Research Centre

Nine ambassadors—from Barbados, Japan, Kenya, Latvia, Luxembourg, the Netherlands, Switzerland, Turkey, and the United Arab Emirates—were in attendance, alongside diplomats from Croatia, Egypt, Estonia, the European Union, Germany, India, Indonesia, Kazakhstan, Namibia, and Switzerland. Representatives from international organisations, chambers of commerce, multinational corporations, and both Chinese and international media also took part.

CCG will later upload the video recording of the luncheon to its official YouTube channel and WeChat blog. The following transcript is based on the video and has not been reviewed by any of the speakers.

Henry Huiyao Wang, Founder and President, Centre for China and Globalisation (CCG)

It’s really a great honour to welcome all of you again to the 17th CCG VIP luncheon that CCG has been conducting since last year. Again, this has really become a well-established platform. We have so many friends, ambassadors, and I also have the Deputy Head of the Indonesian Embassy here. We have all the good friends, and also quite a few of my former MOFCOM colleagues joined us in this room. There are many companies and media friends, and so many international organisations. You have the IMF, ADB, and all those great economists here as well.

What I actually want to share a bit about this subject today is that we’re going to talk about global development cooperation and the role of China. Recently, of course, China has had quite a few summits, like the SCO and the BRICS summit with Brazil. And, of course, now we are getting into the full season of autumn, it gets very busy, and we have to find out how the economy is going, how development is going. More importantly, the 15th Five-Year Plan is coming. And we are also having in October the coming Fourth Plenum of the 20th Party Congress, which is going to set the tone for the 15th Five-Year Plan. So we’re at this juncture. That’s why I would like to talk about the economy, talk about development, and we have really invited three very distinguished guests to talk about this.

But to start, maybe I can warm up, because we have heard a lot of people say the Chinese economy is flat, and the real estate bubble has burst. So how is China doing? Here, we hope to give some different perspectives.

Basically, in recent years, we have seen that the world has entered a period of tremendous changes and transformation. The global economy has slowed down, while protectionism is on the rise. Global value chains and industrial structures are being reshaped, and digital technology and AI are advancing at an unprecedented pace.

We at CCG also just concluded a very big conference at CIFTIS on Friday, and we have uploaded the video as well. We also uploaded the video recordings of the luncheons as well. We can see the challenges, and at the same time, the wealth gap between nations is widening. Global fragmentation is also deepening, and populist sentiments have surged. We see unrest in many countries happening now. Trust deficits have grown as well, and international power dynamics are undergoing profound restructuring, as we can see. Global challenges from climate change to public health crises intensify, yet global governance lags behind global practice. The international economy and how that relates to the Chinese economy are also the issues today.

So I’d like to briefly say, China’s development, I think, rises through transformation, still developing over the past decade. In just the last 10 years, China has undergone an extraordinary transformation. For example, it has lifted 100 million people out of extreme poverty. And, of course, we have now built the foundation for sustainable, innovation-driven growth, the so-called new productive forces. That really shows how China has shifted from being the manufacturing factory of the world to a more innovative centre.

Actually, I identified three areas where a really strong China can collaborate closely with the world.

The first one is that China has built a world-class infrastructure backbone to support not just China, but also Asia and the world at large. For example, China’s development rests on a vast integrated physical and digital infrastructure network, thanks to globalisation. On transportation, China has 45,000 kilometres of high-speed rail, more than the rest of the world combined. That’s really very impressive. They have 177,000 kilometres of expressways, ranking first globally. China probably has the largest civil aviation network, with Guangzhou Baiyun and Shanghai Pudong among the busiest airports in China and globally. Seven of the top 10 container ports are in China, with Shanghai being the largest one in the world, probably. On digital infrastructure, China has over 4.5 million 5G base stations, about 60% of the global total, and over 1 billion 5G users. That means if they’re going to do automation, AI and computing, the speed for transformation and connecting is quite good. Also, the “Eastern Data Western Computing” project has eight national computing hubs and 10 major data centre clusters. Of course, China is going to do all those transportation and communication very strongly. On energy infrastructure, the world’s largest ultra-high voltage power grid is in China, enabling long-distance clean energy transmission. By 2024, China has the world’s largest renewable energy capacity: 436 gigawatts of hydropower, 521 gigawatts of wind power, and 887 gigawatts of solar power. So, adding all those renewables, 50 to 60 per cent of China’s energy is renewable, with over 16 million electric-car charging stations or posts, becoming the largest EV charging network in the world. China is also going to build another five Three Gorges Dams. So you can see that the energy transformation is enormous.

The second part is an innovation and talent powerhouse that China is going to push up. China is no longer just the world factory, but has also become a global innovation engine. China produced 73% of the world’s high-level scientific papers, ranking first globally in publication and citations. China has over 7 million full-time R&D personnel, the most in the world, and over 30 million university graduates every year. Since reform and opening up, more than 10 million Chinese, including those from Hong Kong and Macau, have studied overseas, and over 80% returned. That drives up China’s brain gain and also brings circulation with the world. China also ranks first globally in patent applications. Many new patents now come out of China. For example, in EVs, China has the majority of the latest advanced patents. China is also advancing AI, quantum information, clean energy, and biomedicine.

And finally, we can see the world is transforming from traditional power to green energy. A new industrial era is emerging. History shows how technological revolutions reshaped global power. In the 19th century, Britain rose through the steam engine, textiles, and railways. In the 20th century, the United States led through electrification, semiconductors, the internet, and digital technology. Now, in the 21st century, the world has entered a new era defined by the green transition. So I would say green globalisation is really happening now. In this new industrial revolution, China is emerging as one of the leading forces in the global green transition.

China’s green rise shows this clearly. China possesses the most complete industrial chain and the largest market scale in the world, already leading globally in solar panels, wind power, electric vehicles, energy storage, and green transformation technology. In 2024, China’s power generation exceeded 10 trillion kilowatt hours, about one-third of the global total. China’s consumption of power is 2.5 times that of the U.S. and three times that of Europe. The world’s top four wind turbine manufacturers are now in China. During the 14th Five-Year Plan, the share of renewable power capacity in China rose from 40% to nearly 60% in five years, with annual additions of wind and solar capacity soaring past 100, 200, and even 300 gigawatts. You can see this fast pace.

So basically, what I’m saying is that we are still quite cautiously optimistic about the Chinese economy. Something I would like to propose is the “China synergy”. You know, we see in the New York Times that there’s a “China shock”, but there’s also this “China synergy”. When you combine all those infrastructure, digital, and green transformations, that really makes up for losses on the real estate side. Real estate may slow down, but in the last two or three years, the new economy, new technology, and new transformation have been going on.

That’s the topic we would like to talk about today, and China would serve as a global value chain and global supply chain with strong infrastructure backing. Multinationals will find that if they put production in China or work with Chinese companies, they will really benefit, and also, Chinese companies going global will benefit. I think the next wave will be Chinese companies investing overseas, so they can create jobs locally, generate taxes, and really serve local communities. I just saw that in the State Council meeting chaired by Premier Li Qiang two days ago, China is setting up a Going Global Service Centre to facilitate more Chinese investment overseas. This green power will really become a major destination and project for future investment. Like in the past, you have to invest more in different countries, particularly the Global South, to make China’s development and the world’s benefit come together.

So I think I’ll stop here for the brief introduction, but I’d really like to invite our three top experts to join us. We have Pan Qingzhong, the Executive Dean of Schwarzman College, Xu Jiajun, Tenured Associate Professor at Peking University, and Mr Tong Lihua, Director of Beijing Children’s Legal Aid and Research Centre.

Okay, good. So while you’re having your lunch, we can start our great experts’ discussion here. Our panel is going to focus on development, global development, and the role of China. We’d like to hear from experts from different fields. Dean Pan is the Executive Dean of Schwarzman College. He’s a top expert on Chinese education and economy, particularly international education, and he was also a professor at the Tsinghua School of Economics and Management. You were the Founding Executive Dean for Schwarzman for 12 years, right? That’s right. Very knowledgeable. Dr Pan just held the Schwarzman opening two days ago with 150 new, fresh graduates. Next, you’re going to celebrate 10 years of alumni. Okay, good. So we will hear from you.

David Qingzhong Pan, Executive Dean, Schwarzman College, Tsinghua University

Thank you so much, Professor Dr Wang, and your opening remarks are not only opening remarks; that is like a lecture, as it gives us a lot of perspectives. So that’s why you’re the professor; Dr Wang is also our professor, and every year he teaches our students, international students and domestic students. And so that’s a great one. Also, he organised a lot of high-end VIP forums and dialogues. I don’t know if he sleeps or not. He’s a sleepless gentleman. So he has made a lot of other contributions. Thank you so much for inviting me to be here. Thank you, Dr Wang.

So, a few words about Schwarzman College. Schwarzman College is actually like a platform. It was founded in 2013 by President Xi Jinping. And also at that time, President Obama sent the greeting letters. In 2016, on September 10—that is, China National Teachers’ Day—President Xi Jinping and also President Obama sent another greeting letter to one school. Know why? Because global development and cooperation are so important, and important not only today but also in the future. So that’s why we want to work on our future leaders—so that’s our program. Well, this year, as Dr Wang mentioned, we have 150 students. They’re coming from 45 countries. And in total, we have students from 126 countries already, and we have 80% students from overseas and 20% from China. So, that is our mission: for future collaboration, cooperation, and development globally. That’s our school. So that is the education part. In Tsinghua, this year, we have over 3,500 international students. Last year, we had 3,462 students. That’s a little bit below before COVID, but still over 3,500 international students. All of this, we strive for global development for the future. So, that’s the education part.

Another one I want to talk about, as Dr Wang mentioned, is the economic perspective. This morning at 8 o’clock, we started this semester’s first class. My class started at eight o’clock, and I have students from different countries, from Switzerland, Germany, Holland, South America, and also Argentina, so there are a lot of students in my classroom, and the course is titled “Leading Issues in Global Economy.” The things I taught in that course 10 years ago—more issues are coming. So I should quit that class to have fewer issues. As Dr Wang mentioned, we are facing a lot of challenges. Every time I ask the students, they raise their hands and say what are the leading issues in the global economy, and year after year it’s common there: like climate change, trade issues, the labour issue, inflation and unemployment, inequality—a lot. But how to fix them? China is trying its best to solve some problems. It’s not a model, but we try hard. And in the last 40 years, 45 years, different stages have fixed different issues. But today, as Dr Wang mentioned, we have other issues, transition and reform, a lot of things. But how to fix them? That’s very testing for our wisdom, for our policy implementation, everything. So I’ll stop here. I’ll try to save time, and then we can talk about that later. Thank you. Thank you.

Henry Huiyao Wang

Thank you. Dean Pan, excellent. Let’s give you a round of applause. You had a very good start. And you talked about the education development. It’s also amazing. As we said, China has 30 million college graduates each year. But also, Schwarzman already offers international education programmes and is planning to expand them. As far as I understand now, there will be more international schooling and development in China, so we can talk more. And I hope we’ll leave more time for our internal, on-the-side discussions. So, we’ll have Professor Xu talk about your discussion and ideas on your expertise.

Xu Jiajun, Tenured Associate Professor and Executive Deputy Dean of the Institute of New Structural Economics, Peking University

Well, thank you so much, Professor Wang, for the very kind introduction, and I may give a brief introduction to the research program at Peking University that I’ve been leading for the past eight years.

So, what I’ve been doing with my team is building the first global database on public development banks worldwide. When I started this project, my colleagues from the World Bank—I used to work at the World Bank—said this might be a non-starter. I asked, Why? Because they said public development banks are initiated by the government to proactively pursue public policy objectives. But in these countries—you know, the poorer countries—they often suffer from poor governance nationwide. And therefore, it’s very challenging, if not impossible, for these countries to establish well-governed national banks. So, history has shown that these banks have failed miserably in the past. Therefore, these banks may be dying out or have been commercialised during the structural adjustment programmes in the 1980s and 1990s.

But I’m from China. I’m a Chinese scholar. So, when I started, China and other emerging economies, including Europe and the U.S., Japan, and the East Asian tigers, when they industrialised in the past, they established well-functioning national banks to provide large-scale and long-term finance. So, history has given me some hints: maybe this institution matters.

So, I started this project to build the first global database on public development banks, and the first result was launched at PKU in 2019 at an internal conference. My team had successfully discovered more than 530 public development banks from over 150 economies, and, more importantly, their total assets have been up to 23 trillion USD. We estimate they account for 10% of global investment.

So, public development banks are very potent instruments for transforming state capacity for structural transformation. If we want a closer look at China’s own experience of development, we’ll find a key lesson, that is achieving economic transformation in a sustainable and equitable manner is a key engine for large-scale poverty reduction in a sustainable manner.

Over the past four decades, China has lifted 800 million people out of extreme poverty. The scale is unprecedented. It accounted for 75% of the poverty reduction during the same period. By contrast, if we look at African countries, they have the same aspiration of economic prosperity and poverty alleviation, but when they implemented privatisation, liberalisation, and deregulation reforms in the 1980s, this led to economic recession, which even brought setbacks in health, education, and even child nutrition. So, we find that economic transformation really matters.

But if we want to achieve this, we encounter a lot of challenges. One big challenge is the lack of long-term finance provision. Private commercial banks tend to provide short-term loans. They even engage in maturity rhetoric: they want to shorten the maturity in order to be first in line to get repaid. And if we look at the private capital market, it also suffers from short-termism. Managers in the fund are evaluated on a quarterly basis. They are not there to provide patient capital to foster innovation and long-term finance. Therefore, against this background, to address these market failures, public development banks have a key role to play.

And if you look at the current international financing system, we’ll find that it already suffers from some key challenges, because just recently, this July in Seville, Spain, the UN convened a very important once-in-a-10-year conference, the Fourth International Conference on Financing for Development (FFD4). I was invited to join the International Commission on Financing for Development for the conference and to take stock of what has been wrong in the past four decades when we were trying to mobilise money to finance SDGs. And based on my study, together with commission members, we found three key challenges. We think they need to be overcome in order to achieve the SDGs.

The first key challenge is that we find many international development agencies tend to seek ready-made solutions to complex challenges, which fail to foster the mandate and mindset to build systemic capacity and to achieve structural transformation, which may take at least a generation to achieve. So, this is the first challenge.

The second one is that these finance providers are incentivised to achieve short-term goals that are measurable and countable in a short-term period, and they lack a long-term and comprehensive vision that we need to achieve this kind of green economic transformation in the long run.

And last but not least, even after this pandemic, we find that the international community tends to set up parallel and often fragmented funds to tackle global challenges, which often work in a siloed manner, lacking synergy.

So, in order to overcome these challenges, my strong recommendation is that public development banks have a key role to play, I think, at least at three levels. First, at the strategy level, public development banks should place structural transformation at the heart of their mandate; they should take a pilot role in piloting an integrated, holistic, and transformative approach to finance SDGs. We cannot simply talk about climate change, poverty reduction, or agricultural productivity. All these are interconnected. We have to take an integrated approach and also try to put it in a larger framework of structural transformation.

Secondly, it’s also important to go beyond the current billions-to-trillions agenda, which often focuses on the project level and making individual projects bankable. They have to foster transformational scaling. Very importantly, they have to recognise the size of the problem, the long-term goals, and also have the pathways and roadmaps to achieve this. In China, we have the five-year planning; we also have the 2030 agenda. This kind of vision is very important, instead of simply mobilising more money relative to the baseline.

And secondly, it’s also very important to go beyond the project-level approach to identify the systemic barriers. Professor Wang mentioned renewable energies in his opening remarks. In China, when we talk about renewable energy transformation, it is not simply to build some solar panels and wind projects. It is also important to provide transmission lines and distribution lines; it is also important to reduce fossil-fuel subsidies. These are systemic barriers. We have to have interventions that can align these interventions with enabling conditions to achieve sustainable impact at scale.

Last but not least, it is also very important for them to have a planning framework engaging with all stakeholders—public, private and even civil society—in order to achieve this kind of transformational agenda in a more sustainable and self-sustaining manner.

Finally, I think also at the ecosystem level, PDBs, the public development banks, also need to work together with philanthropy and the private sector, and try to create this kind of transformational scale that we already need today. Because today, developing countries are really facing much more challenging tasks, because they have to achieve economic transformation within the planetary boundaries. And therefore, they also need more technological innovation in order to make this green structural transformation feasible in the long run.

So, just to sum up, I do hope that, moving forward, PDBs can play a greater role: to act as an agent of transformative state capacity, to work with developing countries that aspire to achieve economic transformation, to achieve the goal, as China has done in the past four decades.

Henry Huiyao Wang

Thank you, Professor Xu. You were very comprehensive, and you also gave a lot of recommendations and solutions for development financing and for how we can achieve a balance in sustainable development. That was a good summary.

Now, I’d like to invite Professor Tong. You are an expert in legal affairs, so what are the legal developments in China in terms of development? We’d like to hear from you. Please, Professor Tong, thank you.

Tong Lihua, Director of Beijing Zhicheng Law Firm, Director of Beijing Children’s Legal Aid and Research Centre, Director of Beijing Zhicheng Migrant Workers’ Legal Aid and Research Centre

Thanks, Dr Wang and CCG, for inviting me to come here to communicate with you. In the last decades, China’s child protection legal system has made significant progress. I would like to introduce some basic information. So first, I would like to introduce myself and my organisation.

I was born in a very poor village. When I was very young, I experienced a lot of difficulties, so I understand how important justice is for children. Fortunately, 34 years ago, I came to Beijing to study as the first student from my county to attend the China University of Political Science and Law. And 27 years ago, I became the youngest director of a law firm in Beijing. At that time, I was very young, but I became the director of that law firm. I also wanted to promote public interest work, especially for children.

So in 1999, I set up the Beijing Children’s Legal Aid and Research Centre, which is China’s first NGO with a legal background for children. And in 2005, I set up the Beijing Zhicheng Migrant Workers’ Legal Aid and Research Centre, which is also the first migrant-workers’ legal-aid NGO in China. I have always wanted to promote public interest law, and the Beijing Children’s Legal Aid and Research Centre has become the most influential child protection NGO in China. We provide legal services to children directly. We advocate for child rights. We conduct empirical research. We promote legal and policy reform.

In China, we have a special law—we call it the “Law on the Protection of Minors.” During two major amendments, the National People’s Congress invited me to draft provisions at workshops for them. We participated deeply in that process, and many of our suggestions have become laws and policies. I am lucky to witness this process for China’s child protection legal system.

Second, I want to introduce this law. The UN Convention on the Rights of the Child came into effect in 1990. That convention stipulated many child rights. How can children attain these rights? In 1991, the National People’s Congress enacted a special law. This law’s core idea is to transform children’s rights into obligations for adult society. At first, this law had four main chapters: family protection, school protection, social protection, and judicial protection. In 2006, when the National People’s Congress amended the law, in my expert version, I wrote another new chapter: government protection. I believed it was important for the government to take more responsibilities, but it was not accepted at that time.

In 2020, the National People’s Congress amended the law again. This was a big change. In my expert version, I wrote two more chapters—government protection and online protection—and the law finally accepted this suggestion. So now, in China, when we talk about the child protection legal system, it includes six important parts: family, school, social, judicial, government, and online. This is the basic foundation of China’s child protection legal system.

Third, I would like to briefly introduce online protection. Human society is rapidly entering a special era—we call it the digital and AI era. I have to say we face a lot of unprecedented challenges. How to deal with these issues is a common challenge in the world. In China, we have a special chapter in the law, as I just mentioned, and the State Council also enacted a special regulation on child online protection. This is very important and comprehensive. Some central government agencies also published special policies to deal with these matters.

How to set up a new legal system to deal with this unprecedented challenge is something we are still exploring, I have to say. First, I want to say it is difficult to have good laws and policies, but it is even more important to implement them. How to implement those laws and policies is a similar challenge worldwide. In China, we are promoting a special judicial child protection system. The Supreme People’s Procuratorate and the Supreme People’s Court set up special departments to deal with child rights issues. They have cultivated many very professional child protection judges and prosecutors.

In 2003, I promoted the All-China Lawyers Association to set up a special committee—the Child Protection Committee. I served as that committee’s director for 16 years. We promoted the establishment of a large volunteer-lawyer network around China, and many lawyers are very active in this field. Some of them are very influential at the national and local levels. We hope to cultivate more professional child-protection judges, lawyers, and prosecutors to implement those laws and policies in the future.

Finally, I want to say we want to promote international cooperation. The Beijing Children’s Legal Aid and Research Centre was also raised to UN special consultative status, and we joined a lot of international activities. We also hope to promote international cooperation to cultivate legal professionals in other countries. For example, we helped train a very good child protection lawyer in Kenya, and we will continue to promote this work. Now I am the vice president of the Beijing Bar Association as well, and I hope we can have more opportunities to cooperate with other countries’ bar associations and other legal professionals to promote this process.

All countries and families care about child rights, but it is very difficult for children to achieve those rights by themselves. It is difficult. Only when we take more concrete actions can we bring hope and strength to children and build a community with a shared future for mankind. Thank you very much.

Henry Huiyao Wang

Thank you, Professor Tong. Basically, we have heard from a few experts. We talked about education, we talked about the economy, we talked about society—we have so many migrant workers for development. We have children, education, and also rising protection and legal aid. So we had a good sample of all the issues related to China’s development, how it has been improving, and also what it may look like in the future.

So, before I open up for comments and questions, I would also like to invite Professor Pan to briefly add something, because you spoke very briefly at the beginning. You mentioned that you have been giving a course on international issues and the economy. So what are those issues that you think China, and the international community as well, need to watch out for or be careful about? Maybe just briefly share what you told the Schwarzman students this morning.

David Qingzhong Pan

I want to save time because I want interactive dialogues. This morning was very brief, and there were a lot of issues—students listed over 30 issues and how to fix them. We talked one by one. There are 16 lectures for global perspectives. We need collaboration, and we need governance—the right governance. China and the world have changed in past years, and a new order of governance should be set up, whether dynamic governance or a dynamic order. We need that. If we rank priorities globally, that is No. 1. So I’ll just answer briefly: we have a lot of issues, and we’ll fix them one by one. Thank you.

Henry Huiyao Wang

Great. Now we will open our comments and discussion. Ambassador from Luxembourg, please go first, and then I will invite Marshall to share a comment later.

Rol Reiland, Ambassador of Luxembourg to China

Thank you very much, Henry and CCG team, for organising this very relevant luncheon. I asked for the floor first because I spent quite a lot of time in development cooperation at the beginning of my career many years ago, but also because Luxembourg is one of the, unfortunately, very few countries left which spend about 1% or even a little bit more of its gross national revenue on development coorperation and which despite any budgetary pressures, continue and have committed to do so.

Another area—and I would like to commend all of the speakers, but in particular Professor Xu, for her very valid and relevant statements. I think I couldn’t agree more with you—what you said in particular, when it comes to long-term finance. The need of long-term finance is extremely important, even more so in this very short-sighted or short-term world that we’re living in. And which was, by the way, one of the reasons that convinced Luxembourg to become the first non-Asian founding member of the Asia Infrastructure Investment Bank back over 10 years ago.

So I would like to ask you, Dr Xu, if you allow two questions. I said I could not agree more with most of what you said, but for all the different elements that you mentioned, I missed one. You spoke a lot about ownership. You spoke about the need for stakeholder participation, but I missed a little bit of capacity building. So what could you tell us about capacity building in that, because it’s good to have infrastructure, and we have seen it in China, but you also need talents in all those developing countries to be able to manage public finance, to maintain infrastructure, and to plan it and to manage it very well. That’s one.

And the other one would be, how do you see in the future the role of private finance coming in, given that, particularly for us Europeans, and I see many around the table, the constraints on public finance are getting bigger? So how do you see the need to create incentives for private finance, because without incentives, they won’t come to join increasingly in the game in providing additional financing for development? Thank you very much.

Marshall Mills, Senior Resident Representative in China, International Monetary Fund (IMF)

Thank you for the opportunity to hear these fascinating remarks. I wanted to follow up with a question. I think it builds on what the ambassador said. China has a wealth of experience and development now, and a number of successes. I was wondering how knowledge sharing could be nurtured. So not just building capacity, but sharing the knowledge that China has accumulated and exchanging it with other developing countries. So if the panellists could address that. Thank you.

Jürg Burri, Ambassador, Embassy of Switzerland

Thank you very much. Thank you for inviting us to this panel with a very interesting topic. And I heard many interesting elements. I agree with almost everything. I have heard, as Switzerland is engaged in many of these fields, for example, when it comes to environmentally sound technologies. We have programmes with China. We try to have a dialogue with the China International Development Cooperation Agency (CIDCA) on how we can bring core knowledge in our countries into international development cooperation. We try triangular projects with China.

But one element I would also like to add, and I would like to hear your comments on it, is actually global development cooperation through the UN system. China is the second biggest donor in the UN system, and we all appreciate that. However, when it comes to program funding—and given the current pressure the UN system is under, with most funds and programs heavily reliant on targeted financing from donors—we have not yet seen a strategy for how China will step up to help these funds and programs in this difficult situation. Other than its core funding, also its program.

Also, it’s very interesting, of course, when you do funding through programmes, one very important element is that you can then also integrate your ideas in these funds and programmes. And there, I would also like to know from you whether there are, let’s say, China is growing advisors and people that can work in the UN system that are compatible with the UN system. So, how do you see China’s future approach in strengthening the UN system on the level of voluntary funding, voluntary contribution to UN funds and programmes? Thank you.

Han Bing, Former Deputy Director-General of the Department of European Affairs, Ministry of Commerce; Former Minister-Counsellor at the Chinese Embassies in Egypt and Zimbabwe

It’s very interesting to hear these ideas and the sharing. I would like to put just two questions. One focuses mainly on public banks. It’s very interesting now to raise the issue of public banks and their role in a country’s development. When we talk about development cooperation, we usually think about donations to developing countries to help them build economic strength.

But public banks in China are a very important issue for China’s development. We have the China Development Bank. We see that as a policy bank, the China Development Bank and the China Exim Bank. The China Development Bank is a public bank that has huge investments in infrastructure, matching the country’s long-term strategic goals. I think this experience could be shared with developing countries.

Many developing countries do not have such public banks that can help pursue the strategic development goals of the country in the long term. When they use budget money, it’s not efficient. So if you establish such public banks like these policy banks, I think it’s more efficient to achieve strategic development goals. Maybe in the future, for development cooperation, we can include public banks. How can we introduce the Chinese experience? How can policy banks be used to develop the economy? That is one point.

The second point. Dr Xu, you mentioned that you set up the database for public banks. How can we access this database? Could you give us some directions? Thank you.

Xu Sitao, Economist at Deloitte

Thank you, Professor Wang, and thank you for inviting me. Maybe I’ll just offer some very brief comments on your opening remarks.

I think the economy is in better shape than a lot of people have assumed. So much emphasis has been on the real estate sector for obvious reasons, since three quarters of consumers’ wealth is tied to the property market. But let me give the audience some positive signs. I think one positive sign is this unleashed animal spirit that we’re seeing in the asset market. In China, one of the most important benchmarks is the long-term interest rate, now almost approaching 2%. That’s still low, but a year ago, maybe half the people thought it would go to zero, like in yesterday’s Japan. So I think that’s a very positive change.

The second positive change is that even with this frenzy in the asset market, bank deposits are still growing, suggesting we don’t see real speculation yet from consumers. So those are two points.

But I do have a question for Professor Pan. I think your college is a very important experiment. We all know this college is essentially a JV between the United States and China. But in today’s multipolar world—because you touched upon the issue of governance—maybe you can share your thoughts or your vision on this topic, given this fundamental shift in relations between the two countries. Thank you.

Andrei Radulescu, Director of Macroeconomic Research, Institute for World Economy, Romanian Academy

Good afternoon, distinguished panellists. Thank you very much. It’s an honour for me to be here. I’m Andrei from Romania, from the Institute for World Economy, but a global traveller with macroemic presentations in almost 50 countries in the world.

Very interesting debate. I would like to ask you a very short question because nobody talked about the risks of another global financial crisis, and we have many elephants in the room. So, from your perspective, what is the risk of a global financial crisis outbreak in the following 12 months? Because we have a huge record demand for gold everywhere in the world, and we have skyrocketing prices of gold. So, something is going to happen, not to talk about divergences among the largest economic blocs in the world.

And the second question is if this crisis is going to break out in the short term, because you talked about divergence between long-term and short-term perspectives. How do you see the global development cooperation at the moment of the outbreak of the crisis? Are we going to see intensifying divergence, fragmentation, and probably conflict? Or are we going to see a return to multilateralism? Thank you very much.

David Qingzhong Pan

Okay, I’ll keep it very short and answer Marshall’s question: how can we share something with other countries? To keep it short, the government plays the key role. This is number one. Why? Because at the beginning, 45 years ago, job number one was economic development. That is still very important today. Another plus is entrepreneurship. In China, we have 60 million enterprises today; small and medium-sized firms have played a huge role over the last 45 years. In China, when we say “Happy New Year,” we also say “Gongxi facai” (恭喜发财), which means “wish you wealth,” right? People don’t care about whether you are happy or not; they wish you would get rich. So there is a kind of DNA among Chinese—to do business and make deals. That is entrepreneurship. How the government plays its role is a long story, but to keep it short, the government plays a key role, and so does entrepreneurship.

Now to answer Mr Han’s question: in the long term and the short term, public banks and policy banks play a role. There is a lot of debt, but don’t worry. They are making large investments in long-term infrastructure. Our kids and young people benefit from that, right? They can take the high-speed train from here to Shanghai in four hours; before, it was 24 hours. They get the benefit, and they should do something. We spent the money, and in the long term, the debt—our next generation, our grandchildren, will pay it back. The idea is that our generation will finish the long-term infrastructure and take on some debt, economically and financially; our next generation will take on their responsibilities because they have benefited from us. That is the philosophy. And that is my answer on debt.

I know there are a lot of other questions for us. Dr Sitao’s question is about education. Fifteen years ago, at Tsinghua’s 100th anniversary, Tsinghua’s leaders said that in the previous 100 years, we had educated and cultivated leaders in China—political leaders, business leaders, and academic leaders. For the next hundred years, what can we do? They said: we want to be more civilised, more innovative, and more internationalised. So that is our vision—to be more internationalised. Our college was founded under that vision.

This vision means we are trying not only to fix global problems and global issues—whatever issues we have—but also to bring students to China, to Tsinghua and Schwarzman College, so they can understand each other, learn from each other, and have a kind of common perspective in the future, and solve common problems together. It starts with understanding. This is our fundamental, original goal. Thank you so much. Thank you.

Xu Jiajun

Thank you, Ambassador Reiland, for your excellent question. Regarding the first point, capacity building matters, and even more important is institutional or policy innovation that goes beyond money but matters for long-run success.

I want to share with you the China story. China used to be a recipient of ODA, official development assistance. In the Ministry of Finance (MOF), they had a department that worked on how to manage development projects from the World Bank, the Asian Development Bank, and even from DFID and, maybe, Luxembourg—those development cooperation. Throughout this process, China has accumulated talent: like President Jin Liqun, the current president of the AIIB, used to be the head of that department at MOF, helping China engage with the world and benefit from different forms of cooperation. This kind of talent building helped China build capacity.

What I want to share with other developing countries is that even if your starting point is very low, it doesn’t matter; what matters is having a learning curve—you need to engage in a steep learning curve. And more importantly, through this engagement, China has gradually built trust with development cooperation agencies. With that trust, China was able to achieve institutional innovation through development projects that went beyond the impact of any project per se.

For instance, when China engaged in development cooperation projects with the World Bank, the Bank required China to engage in public procurement. China used to have a planned economy, so procurement was new to China at the time. But throughout this process, China found it was really useful. So after finishing the projects with the World Bank, China started to adapt the procurement system domestically and rolled it out nationwide. These kinds of examples have been many, including the participatory approach to poverty reduction, which was also introduced through engagement with international partners. This is my answer to your first question.

And secondly, regarding the role of private finance in financing the SDGs, that really matters. If you look at the latest Financing for Development report from the UN, they estimated that the financing gap for the SDGs is about 4 trillion USD. If we rely solely on public money, that is not sufficient at all. Therefore, since the Addis Ababa Action Agenda ten years ago, the international community has tried to engage in mobilising more private capital for financing the SDGs.

But if you look at what has happened on the ground, what has gone wrong is that this kind of engagement has often not been structured in an accountable manner, which may end up socializing the risks but privatising the benefits. I once supervised a student from Bangladesh at Peking University. He said his government had introduced PPP—Public-Private Partnership—in the power sector to reduce fiscal costs and produce more electricity. But it turned out the government shouldered more fiscal burden, because they had to bear too much of the risk. The risk-sharing mechanism was not designed in a way that benefited the country.

Therefore, I think moving forward, it is very important, on the one hand, to think about how to incentivise private capital to come on board at the table. Meanwhile, we also need to think very hard about what kind of eligibility or performance criteria have to be put in place at the starting point in order to hold private money accountable. In that regard, I do believe that ODA, official development assistance, can play a catalytic role to reduce risks through private guarantees or even engaging in project preparation, and to lay the foundation for the participation of private money.

So, thank you so much for your insightful comments and question. In response to the question from Marshall from the IMF on how China can better share knowledge with developing countries, I may use the example of public development banks. Because in China, as President Xu mentioned, the China Development Bank was celebrating its 30th anniversary last year. So it’s quite young. It started with 5 million RMB of share capital. Could you take a guess at how big CDB is right now? What is the total asset of the China Development Bank right now? Just have a wild guess. According to my database, CDB currently possesses total assets of 2.6 trillion USD.

To put this into perspective, CDB is much larger than the total assets of the World Bank, IDB, EBRD, and the Asian Development Bank—those regional banks—combined. And why has CDB become so big? Because over the past four decades, CDB has provided much in terms of long-term finance in China, to infrastructure, to basic industry, and even to some high-tech industry. And because China has achieved industrialisation at such an unprecedented pace over the past four decades, CDB has grown so big.

The question becomes how CDB managed to mobilise so much money, because when CDB was founded in 1994, China’s bond market was almost nonexistent. CDB does not take any household deposits. They basically relied on sovereign creditworthiness to issue bonds on the capital market and to mobilise money.

This is a question raised by my student from an African country. At Peking University, we have the Institute of South–South Cooperation and Development. They are government officials pursuing PhDs or master’s degrees at Peking University, and they said: My government has recently established a national development bank, but our bank is very small and our capital market is very shallow. This is a kind of chicken-and-egg problem: how can we grow our bank to unleash its full potential?

I think, for this reason, CDB has a great deal to share with others. But, very unfortunately, maybe CDB believes that action speaks louder than words—this is the Tsinghua motto. Therefore, there are very few studies about CDB, and many materials have been written in Chinese. So I think this is the mission of my research team at Peking University: to really understand what are the enabling conditions are for CDB to play a crucial role in the transformation process in China, and what kinds of lessons other countries can learn to fulfil the potential of their own national development banks. This is my answer to Marshall from the IMF.

And finally, I have a question on access to my database. From day one—although my team has devoted huge effort to building the database—we decided we wanted to make it open access. It’s on the PKU website. I also brought some brochures. If you scan the QR code and complete a very simple registration, you will get the data for free. We also update the data on a quarterly basis.

Related to this, when PKU launched the database back in 2019, the president of the French Development Agency and many other colleagues were there, including colleagues from the World Bank. They said PDBs are important, but they never speak to each other—especially NDBs, national banks, even subnational ones. We need to build a coalition of these institutions in order to enable them to achieve goals in a concerted manner. So, back in 2020, during the pandemic, we launched the Finance in Common Summit, where the coalition of PDBs came together, and now we have organised five editions of the Finance in Common Summit. The latest one was held this March in Cape Town, where the T20 Presidency was held. The organisers are AIIB and DBSA, the Development Bank of South Africa.

If you are interested in this, you can also engage in the global research network on PDBs under this Financing Common Summit umbrella, where we want to use this original data for frontier research that can really make a difference.

Henry Huiyao Wang

Thank you, Professor Xu. You mentioned the CDB is larger than the World Bank. But China, as I’ve said, learned a lot from the World Bank. Actually, I remember when I started with MOFCOM in the early ’80s, I was helping the World Bank do roadshows for international competitive bidding—what’s the long list, what’s the short list—and that kind of knowledge sharing. We also worked with OECF. There were a lot of development systems in the ’80s and ’90s. And ADB—we have ADB represented here, too. China benefited enormously during those times. That’s why CDB is built on that. But I also think that other countries can learn from it. I see that the Ambassador of Switzerland’s question was not answered; I would like to answer that.

You mentioned the multilateral system—how you and other organisations can collaborate and work in this environment. I think there is quite a bit that China is doing now. For example, for the BRICS, now you have a BRICS Bank, so BRICS has many more economic incentives, particularly for the SCO. We actually made some recommendations: why don’t we put more emphasis on the economy? And I see that this time, there are many economic programs and development programs announced for the SCO, rather than just security and military. Basically, I think there is more economy in that now. So what I would like to propose is that maybe the Belt and Road Initiative should be formalised a bit more, and we can set up an office in Geneva as an international organisation of some kind, and then make it more economic.

Also, I think this approach of a BRICS Bank, an SCO Bank—why can’t the G20 have a bank? Why can’t APEC have a bank? Then we can really strengthen that. I also think we could do more with international cooperation, collaboration, and development banks. That would help strengthen the UN system, as China is now the second-largest donor to the UN. And absolutely, we’re having the UN summit in New York—80 years of celebration. I think the G20 should do more. And also NATO—why can’t we have a free trade agreement among NATO members? Let’s not militarise or securitise the organisation; maybe add more economic and development elements into those international organisations. I think the Shanghai Cooperation Organisation and BRICS countries are good examples, emphasising a lot on the economy. And I’d like to see the BRI also be more internationalised with global participation. Of course, other groups like the G20 and APEC—and even NATO—could have a lot more economy. The African Continental Free Trade Area—why don’t we have a bank for that?

I’m just thinking aloud here. Maybe we’ll have another round—maybe another 10 minutes—and we’ll finish. Okay, we have the Deputy Head of the German Embassy, right?

Stephan Grabherr, Deputy Head of Mission, Embassy of Germany in Beijing

Thank you very much for this very substantive and inspiring lunch, and the great discussion here. As you know, we have a lot of delegations that come around and ask us about the situation here in China. And this discussion gives us a lot of substance for answering these questions because we understand that China is a powerhouse, is very innovative, and is doing a lot as far as global development is concerned, because you are leading also by example, because your own development in your country is very inspiring.

But when I have these briefings with my delegations from abroad, then there’s a moment that gives me a little bit of chittering when the tricky question comes up: Mr Grabherr, why is China still a developing country? Why is China considering itself a developing country? Well, I try to answer the question by saying, well, when you travel around in this large country, you see that not every spot is as developed as it might be on the East Coast. So yeah, but that holds true also for our country. That holds true for the European Union. Not every spot is at the same level of development as it is, and it’s a policy aim that we try to realise to have equal conditions everywhere. But why is China still considering itself a developing country? That’s a really tricky question. Perhaps there might be some answers or some ideas about that. Thank you.

Lynette Mwende Ndile, Deputy Head of Mission, Embassy of Kenya in Beijing

Thank you very much. In the context of the global financial architecture, I think you’ve seen Kenya among the developing countries that have been pushing for reforms. For example, last year we held the IDA Heads of African State Summit in Nairobi.

For us, our argument has been: if you look at China and even CDB—just for context—we are working very closely with China’s policy banks, CDB and Exim. We’re also a member of AIIB. And we’ve seen some support, especially in project preparation, because PPP is now an available model for our infrastructure development.

But my question is: what is the role of China in positioning itself to come up with a more fit-for-purpose vehicle? When you look at our push for reforms to be well put-together, looking at climate change and other adversities, we see our national budgets now have to move to diversify or move towards fixing and mitigating the harsh effects of climate change. That means we are depleted of funds towards infrastructure development.

So then, when you look at CDB, how then can we push for these grants? That is why we came up with the IDA21 Replenishment, where we are pushing for more grant financing towards developing countries. So what then can CDB and Exim do in the context of that, whether through low-interest or interest-free long-term financing? Because we still have a lot to do in giving the private sector incentives towards private financing, and that will take time.

But today, we are in a place where we really need more infrastructure. That means there could be a role for China with your policy banks and public banks. Therefore, what then can we do in the context of our reform agenda? Thank you.

Kenji Kanasugi, Ambassador of Japan to China

Thank you very much, Henry and all the panellists, for wonderful presentations. My question is very simple: what is the prospect of Shanghai Corporation Organisation Development Bank? It has been under discussion for several years. And finally, in Tianjin, there was an agreement to establish a bank. I’m not a financial expert. I’m a layman on financial issues. But as far as I know, the settlement currency of AIIB or BRICS Bank is mainly U.S. dollars. But under the perceived SCO Development Bank, the settlement currency seems to be reminbi, if I’m not mistaken. The renminbi has been tightly controlled by the Chinese government. How do you reconcile the settlement currency being renminbi in the SCO and the strict control on renminbi by the Chinese government? Well, this is a layman’s comment, so I may be wrong.

Henry Huiyao Wang

All right. Since I raised the SCO, I’ll answer first. What I think is that the BRICS Bank has developed and is trying to diversify a little bit, but it’s going to be a long haul to move away from the U.S. dollar. The U.S. dollar is still too dominant. For SCO, I noticed announcements that all the trade between China and Russia is being done in local currencies, probably largely in renminbi. But I have not seen anywhere in the press that they plan to use the renminbi as the official currency for the SCO Bank. My guess is that in the future it will be a mix—USD will still be used, but also euros, renminbi, and other local currencies. So it could be a diversified approach. I also think it’s a good thing that the SCO, which used to be mainly a security organisation, is now developing into a more economic organisation. That is positive in this kind of geopolitical context. That would be my brief answer.

Let me also respond to the other question from our German friend about why China still classifies itself as a developing country. I think it is largely due to tradition. If you recall, Chairman Mao once said China was one of the leading countries of the Third World—that is, the developing countries. Now we call it the Global South. So I think there is a political label there: China positions itself as part of the developing world.

At the same time, in the WTO, developing countries enjoy more preferential treatment. But in practice, China’s average tariff is only 7%, which is already close to developed-country levels. And recently, China announced that it would give zero tariffs to all 53 African countries. That is an even bolder measure than many developed countries, including the U.S., which is actually raising tariffs.

So in practice, China is doing a lot of things similar to developed countries. But in terms of its political status, it still claims to be a developing country, so it can continue to speak for the developing world. That’s why there is this mix: on the benefit side, China has already given up many of the advantages of developing-country status, but politically it still identifies as one.

Okay, maybe now we’ll move to the other two questions.

David Qingzhong Pan

One question—and a tough one for you. For the concept of developing countries, last year and the year before, which was the richest country in the world? Luxembourg. Luxembourg had a GDP per capita of about 110,000 USD. Is that right? Number one for two years in a row. But the average in China is only 10,000, only 10% of Luxembourg. Is that right? So that’s why China is still a developing country.

Another example: in our credit course, we have a deep dive—a deeper understanding of China. It’s a credit course. For two weeks, our students go anywhere in China, normally nine cities. One time, I brought our team to one area, and once we arrived there, our students, our teachers, our professors—they cried. Why did they cry? Because they said they had never seen such poor areas. That’s the unbalanced development—the inland compared to the coastline. The inland is still very different. That’s why we talk about common prosperity, right? We try to develop more.

So that’s my brief answer to your question. Thank you.

Lei Kan, Lead Communications Officer, Asian Development Bank

Thank you. I have to respond because our organisation has been mentioned a few times.

First, on knowledge sharing and capacity building: we are doing everything every year with solid projects. In every project, we require attention to gender issues, and then capacity building and knowledge sharing. We use our organisation as a platform not only to share the advanced world’s technology and everything, but mostly PRC—Chinese—knowledge with the rest of Asia and the Pacific, even South–South cooperation. As a matter of fact, at the end of this month, we’re going to have an East Asia Forum, where we will invite Southeast Asian, Central Asian, and South Asian countries to come, learn, exchange, and see how successful—not ADB projects, but really Chinese projects—have been. That’s one.

Second, about “developing country”: how you define a developing country is based on per-capita GDP. Given China’s 1.4 billion population, not all the people like us sitting here in Shanghai and Beijing have the same standard of living; it is totally different. And in the landlocked regions, their experience is limited, and they don’t have as much money. Okay, then the argument would be that rich provinces can help poor provinces. We have that—like Shanghai and Ningxia pairing together as partners. However, there are many areas where China does not yet have solutions, like ageing, healthcare, and kids—the legal issues. We have a lot to learn from others. So that’s also partly why I agree with Henry that, maybe politically, we hold back a little bit in saying we are still a developing country—that comes from the culture that the Chinese have always been humble.

We have advanced technology, especially from the private sector. We have to learn from them. Even in elderly care, we realise the private sector is actually more advanced than development banks like us, somehow, because they digest their local problems, learn from outside, and then combine the two together to find the best solutions for Chinese standards of living and the habits of elderly people. And that’s why I think we have a lot to learn.

And we are now discussing whether China should be graduated from ADB. That has been discussed for years. That is really the country’s policy and also a matter of negotiation. China is not the one who makes the decision; it is the Board.

Xu Jiajun

Just very briefly in response to the question on the currency denomination of the newly proposed MDB raised by Ambassador Kanasugi. I think the institutional design of this new bank is still to be seen in the future, but I want to share my observation of the limitation of USD-denominated loans at current MDBs: they may create balance-of-payment problems for developing countries, especially when they engage in the field of renewable energy; these projects often have to proceed in local currency. If they borrow loans denominated in hard currency from the World Bank or from ADB, this may create balance-of-payment problems if the country’s foreign reserves are very low. We do observe these kinds of cases on the ground. Local-currency finance is in short supply. So I hope that this new MDB may innovate in its institutional design in order to solve this problem to better provide more local-currency financing.

And very briefly on the question from the colleague from Kenya about how China may engage with IDA grants or others: I think triangular cooperation could be a way forward. The World Bank talks about a One World Bank approach, where grant money, concessional loans, equity investment, and guarantees can work together in order to achieve transformational projects on the ground. China is very open to triangular cooperation. CDB has a triangular cooperation project with ADB in West Africa, I think, about two years ago. I think they are very open to this kind of collaboration. That might be something we can explore in the future.s