This is a TV debate jointly sponsored by Tianjin TV Station and Phoenix

Satellite TV. Ladies and gentlemen, good afternoon.

I’m Hu I-Hu from Phoenix TV.

Well, I was reminded back to September the 15th,

2008. At that time that was the financial crisis… went bankrupt.

Well, precisely, we are two years later from that date.

Seems like today we are in two years

anniversary. However, I think we should divide

today’s issues into opportunities and challenges and we are talking about

post-crisis age. What are the challenges in front of us?

Well, we’re already encountered challenges but we have more to come.

So one of the issues in front of us is, are we welcoming a brighter future

or a darker future? Before we invite our five panelists,

let’s watch the big screen and look at the current status of our economy.

Having come through rescue plans it seems that the worldwide economy is now

in a recovery road. This also includes the four trillion

RMB in economics dues, luminous package of the Chinese governments at the end

of 2008 which contributed to 8.7 percent of China’s GDP growth in 2009.

In the first half of 2010, China’s GDP grew by 11.1 percent leading to

a robust economic growth. It is true that the signs of economic

recovery are already there in some countries.

However, United States and other western economies still grew in a slow

way. Take the U.S. as an example.

In the first quarter of this year, GDP grew by 3.7 percent, in the second

quarter 1.6 percent, and as of July its unemployment rate reached 16.5 percent.

It is fair to say that the concerns for a second economic dip is over

and countries are looking for new growth points.

However, the world economy is still facing many challenges including new

issues in China’s economic recovery such as resistance in export

overheating in investment, slow growth in domestic demand, a vague picture in

the real estate market and concerns about stimulus policy and inflation

after two years anniversary of economic crisis looking back on the global

economic recovery. Is China already on this recovery

road? In today’s context how can China

facilitate its own economic growth? Welcome to TV Debate of Tianjin TV

and Phoenix TV. Well, we’ve all heard of these

questions from the video clips. That is precisely why we are having

this TV debate. Let us once again warmly welcome the

five distinguished panelists. First, Mr. Cheng Siwei, Chairman of

International Finance Forum. Second, Professor Li Daokui,

Director from Center for China in the World Economy Tsinghua University.

Mr. Liu Changle, Chairman and Chief Executive Officer from Phoenix

Satellite TV Hong Kong SAR. Mr. Jack Ma Yun, Chairman and Chief

Executive Officer, Alibaba Group, People’s Republic of China.

And Mr. Yu Rumin, Chairman of the Board, Tianjin Port Company.

Welcome in our TV debate. So to start with, let me have an

interaction with you. Before we ask our questions on our

distinguished panelists, let me give you a test.

Two years ago we heard a saying that confidence is more important than gold

at any times. In today’s context, what’s your

confidence about the worldwide economy? Do you think that in the short round,

is it possible for the world economy to fall into a second dip?

Please raise your hands. Three, two,

one. Second dip. Others seem to be more optimistic so

where does the concern come from? Mr. Cheng, we noticed that five and six

of the audience are still concerned. They are still afraid of a second

round of economic dip. But I think that two years ago you’ve

mentioned at a global forum that the international financial crisis will be

over after another two to three years. So you think that 2011 will show a new

start? Now, two years later, do you still hold

the same view? Yes, we all know that China’s economy

is growing in a robust way and this year we are transforming from a special

state out of financial crisis into a normal stage.

If we look around the world, I am a cautious optimist.

In my view the world economy is right now in a challenging and testing road

of recovery. In other words, there are still

uncertainties, but, on the whole, the world economy will return back to

recovery. Now, the biggest challenge in front of

us is, of course, first, that crisis, sovereignty debt crisis in European

countries, but, in my view, that would not lead to a second global economic

dip. However, as some countries need more

borrowing, that will slow down the rate of European of recovery.

Second, there are still uncertainties and instabilities in the U.S. economy.

Of course, U.S. is under debt pressure but U.S. is a large economy and people

are still borrowing money to the U.S. So it seems to be that there is not

such a huge debt crisis for the U.S. However, its unemployment rate

and other issues are yet to be resolved and coupled with political factors and the

issues of middle term election, there are still uncertainties in the U.S.

economy. All of these add up to certain global

economic recovery. Thank you.

Thank you, Chairman Cheng. Chairman Cheng said that in the future

he is confident but he’s still observing.

Apart from the U.S. economic recovery he is also interested in what are

European Union has gone through its economic crisis.

And before raising the question to Professor Li, let’s look at the big

screen. People say that statistics matter most.

So can you conclude from the statistics that we can be confident the

economy is really getting better?

Through these statistics, I think Professor Li knows better than I do.

This is a PMI comparative diagram that we noticed that on this diagram there

are figures of China, E.U., U.S., and Japan.

Almost all of them have a PMI of over 50 percent.

Can that give us confidence? Definitely.

It is a clear proof that confidence from consumers and investors is getting

back. However, there is one regret about this

diagram because it only talks about China, but China is not the only one on

the recovery road. China and a large number of emerging

markets are already on healthy road of development which was quite rare in the

previous ten years. Those countries will be strong motive

behind global economic recovery for the next five to ten years.

I noticed that six or seven people of the audience are still concerned about

the possibilities of a second round of economic dip.

The second dip is a new word. It indicates the overall economic

slowdown and presumably back to the bottom.

Well, does that exist such a possibility?

I think there’s little likelihood because this round of financial crisis

is completely different from the last round of Asian financial crisis because

it is the crisis that originated from the balance sheet of private companies.

Looking back on the previous two years, developed countries are already

taking up proper measures which prevent the possibility for a second dip.

However, it cannot change the fact that developed countries are already

suffering from this crisis. So perhaps we should be more

interested in the issue of some architectural changes after this

crisis. And I saw the face of Jack Ma Yun.

He seems to be quite relaxed. But I remember that you mentioned that

knowing will not make you cold, but you mentioned that while snow is being melt

you will feel very cold, bitterly cold. Do you have different views from the

previous two speakers? For me, crisis when they would be over,

if you’re always afraid of crisis, you will be living in a constant state of

fear. Crisis will come more often.

As a company, as an individual, we should be more adaptive to crisis.

It is true this is a sizeable crisis, but I think people are more adaptive to

crisis. In the case of China, China needs to

leverage this opportunity to restructure our industries,

our industrial mix.

Having worked out of the crisis we’ve got to initiate new measures and China

was not as hard hit as quite a number of developed economies such as U.S.

during the crisis. However, during the crisis, the impact

on China was relatively limited, but the difficulties involving

restructuring are far greater than expected.

Yes, that brings us to the business perspective on the need for

restructuring.

So the goods, import and exports, are forerunning indicator for the state of

the economy. And yesterday Warren Buffet said that

he had every confidence in the U.S. economy without any prospect for double

dip recession. Do you agree with the optimism of

Warren Buffet and do you have confidence in all statistics as well?

Despite a lot of difficulties going forward, I don’t think there is

a prospect for double dip recession, and the world economy is firmly on the

trajectory of recovery. There’s no mistake about it.

And the port, through ports, has increased by 17 percent in China,

and all those indicators are pointing to the path of recovery.

And the Baltic Shipping Index reached eleven thousand plus points before the

financial crisis. Now, it is still lingering around

three thousand points, which shows the world economy has not yet recovered,

but for eleven thousand seven hundred and ninety three points prior to the

crisis, it was abnormal. And we’re not going to return to that

high level. And now the current Baltic Shipping

Index is roughly at the level of 2003 and the breakeven point for shipping

companies between twenty seven hundred points and three thousand points,

therefore, it’s rather a reasonable point.

And for CCFI, for container exports, for China the index reached twelve

hundred and two points before the crisis.

Now, it has gone above the previous peak indicating robust economic growth

in China including exports. Therefore, we are definitely on the

path of recovery. I don’t think there’s a prospect for

double dip recession. And in order for us to leave the

crisis completely behind still takes time before full-fledged recovery

is achieved.

So we have heard cautious optimism but they have the consensus that there’s

not going to be a second dip. What about you, Chairman Liu?

You’ve talked about Warren Buffet’s remarks this morning.

The remarks were made yesterday and his remarks were covered by TV this

morning.

And he believed that there’s one-third likelihood of a second dip while the

two-thirds of the chances are that it’s not going to happen.

So I think there’s going to be a mild recovery.

Talking about recovery, there are extreme recoveries,

complete recoveries, and mild -- versus mild recoveries.

And I think if we use the word mild recovery, it is more pertinent in

describing the current situation and which means two-thirds of the chance

that there’s not going to be a second dip.

And I want to say something to the friends from the media.

Many media friends are hyping the notion of a double dip recession.

There is something right in saying so because they are sending some warning

signals to us. And there’s something good for us to

hear some warning, alarms from the media.

Whenever the alarm sounds, it is helpful instead of being harmful

according to an old Chinese saying. And the global financial crisis

started from sectorial crisis. Later it spread to a global worldwide

crisis impacting all the sectors. Therefore, I think it’s a very healthy

thing for us to be reminded by the media.

So with precautions taken, then we will take every precaution against a second

dip then that truly will not happen.

Now, I’d like to ask anyone from the audience to challenge the panelists if

you have any different view from theirs or if you have any question for them,

if you have any comments to make. Please raise your hands.

And I think some of you do believe in the prospect of a second dip.

Please raise your hands again. Please raise your hands again those

who believe in double dip recession. Please share your view with us.

Microphone please.

I still believe in the prospect of a second dip.

When the crisis came around in the first instance, those root causes has

not been addressed. And at that time everybody believed

that the financial sector and the policies and institutions in the west

were very good, were very sound, but then there came the crisis, so given

that, it is still likely that we’re going to go through a second dip.

What are those factors which are yet to be exhausted?

I’m not an economist. I’m a chemist.

But pursuing a scientific point of view you’ve got to prove that all the

likelihood for a second dip can be truly ruled out.

Without that I’m not going to believe in the exclusion of the prospect of

double dip recession. Dr. David Li, how can you convince the

chemist? Oh, I think it’s also a philosophical

challenge against our views. Let me address your question in an

equally philosophical way. Philosophically speaking, this crisis

erupted as a result of accumulation of many factors that had been building up

over the years and after its eruption with numerous forceful measures,

the symptoms of the disease had been cured, but not the root causes.