a discussion here at the Summer Davos.

The entire session will be televised on CCTV's business channel and together with

many other domestic and international channels of the entire CCTV group.

The topic of this discussion is the new frontiers of China's growth.

I'm sure immediately following the Premier's keynote speech will have a lot

of subject matters to address I made it very complicated on predicable global

growth prospects backdrop and here on panel we have some very outstanding

speakers and first of all allow me to introduce youג€”them one-by-one.

I will start with the gentleman next to me. Mr. Li Daokui one of the leading

economist here in China who is also a member of the monetary policy committee of

China's central bank. Ambassador Gary Locke who is probably the

most wildly known Ambassador from the United States ever in China currently as

a Chinese-American politician who was formerly Governor of Washington State

and also the new Secretary of Commerce.

Mr. Wang Jianlin of Wanda Group one of the leading real estate developers and senior

business leaders in China and also

probably the most wildly known and the richest person here in the city of Dalian

and finally, and certainly not the least

Mr. Kris Gopalakrishnan CEO of Infosys. I'm sure you know Infosys as well as you

know about Lenovo in China.

So the first topic that we are allowed to address here is was in the news the global

debt situation was happening in Europe is making a lot of people nervous including

those in China and unfortunately the debt problem is not unique to Europe only.

The United States and Japan virtually

most of the developed world has some sort of a debt problem.

Some worse than others what has happened in United States was making us nervous in

China as well including the Chinese stock markets so I would like to begin by asking

Ambassador Locke.

My colleagues told me that you flew coach

economy class from Beijing to Dalian was that a reminder that U.S still owes China money?

Gary Faye Locke: Well actually that is a U.S government policy whether we are here

in China or even throughout the United States.

All U.S government officials always fly coach on our personal travel if we want to

pay the extra money for business class or whatever that is our own personal decision

but we believe in setting a good example in being good stewards of American

taxpayer money so the requirement is

and virtually all cases unless you are traveling ore than 14 hours and have

a meeting immediately or within so many hours after landing you fly economy

and certainly from Beijing to Dalian is only an hour so economy is very, very comfortable.

Rui Chenggang: Your colleague secretary Gartner was on my show twice and he told me

every time when were together that

a strong dollar is in the best interest of the United States.

It served United States best interest,

but now it seems that a weak dollar is in the better interest of the United States isn't

that so? Gary Faye Locke: Well let me just say

that we and the United States are very concerned about the world economy, we are

also concerned about our own fiscal health, but I think what is really

important is that United States Congress and the President took very decisive

action just a few weeks ago in reaching an agreement on racing the debt ceiling.

Not only did it call for as part of that agreement reducing government expenditure

but also calling for reduction of expenditures in the future and that it

will reduce our deficit and our debt over the next 10 years and there is a committee

of members of Congress that are now negotiating and if they do not reach an

agreement they will nonetheless be automatic across the board cuts in

government spending.

So people should have confidence in the ability of the American government to deal

with a financial problems that we have had to get our fiscal health in order, but let

me also say that it is in the self interest of all other economies in the

world that have the United States economy as strong and as vibrant and as healthy as

quickly as possible. Because certainly a strong U.S economy

means that more people have jobs,

have disposable income, making purchases and we know that many of those purchases involve

items from all around the world.

So the more Americans are working and have income the more they will be buying

things not just made in America but made in China, made in Europe, made in India

and that is good for the workers of all those other countries.

Rui Chenggang: I remember vividly when Ambassador Locke was the governor of the

state of Washington.

He was promoting Washington Apples to Chinese consumers.

You literally cut them open in the supermarket in China promoting American

products for China but probably the biggest American export to China is the

U.S dollars it also has Washington on it

and Mr. Li Daokui I will have ask you most economist in China tend to believe that

U.S dollars will be devalued and the are a lot of legitimate concerns about the

purchasing capacity of China's immense huge foreign reserves.

How did it happen?

Li Daokui: Well, I think for scholars and government officials alike in China they

are quite right in being concerned about the debt dynamics and the future trends of

U.S dollars of the United States because it appears to us that in so far as

agreement between the Congress and the why cost is concerned.

It is not as decisive as you have described. It is just to buy more time to

procrastinate the solution to sometime in the future and I think the U.S economy

like the Chinese economy is also binary economy. It has a very competitive effect like

Boeing from the Washington States

and apple not the Apple PC as well as the wood industry, the timber industry of our

Washington State. However, on the other hand they are so

many are Latin American immigrants in the United States who cannot even speak

English and they cannot catch up with the pace of globalization so for the U.S

challenges today I think the far more grimmer than those confronting President

Ronald Reagan and Prime Minister Margaret Thatcher in early 1980's and your

challenge is around fundamental shift of the economy so as for the low

and straighter of a labor force to be able to catch up for world globalization you need

to reduce welfare budgets a lot. Well, it is not time to find the solution

for the United States but please describe the situation in China talking about our

huge foreign exchange reserves and I think it is our option to build so many foreign

exchange reserves. United States has never forced us to buy

the treasury bonds of the Unite States and to our trade, our commodities, our exports

and many things from China is denominated in USD.

If USD is to devalue rapidly china will be under huge impact.

Could you talk about the origin of this dependency and in this era with this

future of U.S economy in the horizon,

should we step up or accelerate the internationalization of the RMB and shall

we guard more against the risks of the U.S economy. I don't think we should blame anyone for

the dependency. It is result of the past two decades of

globalization of the global economy dynamics and in the process of economic

globalization some countries have some sectors weakening while the same sectors

in other countries are becoming more

competitive so that during a certain period of time in some countries there are

higher savings rates, in others there are lower savings rates and money flows from

China to the United States whose interest rates with higher at that time so we

shouldn't blame anyone for it but as Premier Wen Jiabao put it we have so wise

Ambassador from the United States of China we should exercise our wisdom in finding a solution.

We should not only care about our treasury bonds positions but also thinking more

about diversifying our investments so only with the diversification of our

investments away from the treasury bonds to the physical economy of the United

States including the express ways the highways of the United States it would be

better, but it calls for reform in the U.S as well such as your highway, railway

and coastal assistance. If those reforms have taken place there

will be plenty of money from China from under emerging markets from Middle East

over $10 trillion U.S are ready to be invested into the United States so we are

waiting for those reforms. Without those reforms the only we can buy

is your charity bonds. It will hurt both -- [Chinese] if the

Dalian -- host so many U.S dollars

and given the debt problems and the Euro debt crisis in headline how would you manage

your USD denominated assets.

Well I am proceeding from a microscopic point of view.

If you have a many much foreign currency

given the de facto devaluation of both the USD and Euro I will stop buying charity bonds.

I will start buying natural resources or other physical investments and I think for

the jobs in the United States and before Chinese FDI into the United States it

is quite limited and I think the United States is due restricting high tech

exports to China.

Put it simply for a container loads of high tech exports to be exported to China

it will bring a whole container vessel of goods back to the United States and I

think it will be something very good

and China is the largest developing economy while the U.S is the largest developed economy.

We have a very strong complimentarity between our respective economies so we are

not conflicting with each other but most importantly both offers should open up

fields for investments, sectors for investment for the retail and service

and manufacturing and IT sectors in China the leading companies in China are American companies.

But for Chinese investments in the United States we are just opening a few Chinese

restaurants but because the sectors for Chinese investments are not opened up yet

while you 10 of hundreds of billions of U.S Dollars from China are awaiting for

the opening up of those sectors to be invested in.

Gary Faye Locke: It is an area in which I and the embassy and the U.S government

wants to focus on both of the points raised by our two speakers with respect to

Mr. Wang.

We have had a good conversation last night at dinner.

There is a lot of misperception about the investment opportunities in the United

States. There are almost no fields, almost no

sectors except for very, very few that are restricted in terms of foreign direct

investments so we have companies from Russia, from Germany, from Korea,

from Japan from Brazil from India that actually own substantial holdings and have

substantial holdings in the United States. Whereas in China of course many of the

national champions in the various industries whether it is in steel or

whether it is in a natural resources are prohibited from any type of foreign

investment and if there is foreign investment whether from Europe or the

United States it is limited to no more

than 49%, but on infrastructure we very much welcome foreign direct investment

and we are looking at public private partnership the federal government is not

in the business with paying for all of these infrastructure projects at the state

and the local level those local governments are looking for a private

sector investment and so for instance in California and Las Vegas there is a big

interest in public-private partnership on high speed rail and many of those entities

are actively encouraging participation from China so we welcome that foreign

direct investment.

So what we at the embassy under my 10 years as Ambassador working with the

commerce department and others back in the United States we will be holding a lot of

seminars and reaching out to some of the prominent Chinese companies informing them

of the incredible and very large investment opportunities in the United

States and so that is our job we have got to break down some of they myths and some

of the misperceptions because we do welcome a foreign direct investment that

will help make the Chinese companies more prosperous while creating jobs in the

United States if those training companies establish operations,

facilities, manufacturing clients in United States the same way that the Korean and Japanese

and even German automobiles of companies have created operations in United States the

same way that German companies have created steel mills and steel processing

facilities in the United States.

Rui Chenggang: Thank you Ambassador Locke.

Kris, I'm sure India is watching what is happening in Europe with which concerns as well.

What are some of the actions the Indian government and business community are

considering taking to have the risks?

Kris Gopalakrishnan: So clearly in an interconnected economy that we are today

and all of us will slow down as the global economy slows down and that is the reason

why we have to look at coordinated acts and what happened in 2008 across

governments, across countries I think is an important example or a lesson for all

of us to say that in today's world we have to be coordinated acts.

Indeed economy is also slowing down and all and we were expecting a growth rate of

about 8 to 9% now we are looking at probably close at the 7% and for

a developing economy like India this 2% is reduction has a significant impact because

you know what we expected happened maybe in 5 years to 10 years now we will take 15

to 20 years because of the slow down. So it has an impact on India.

There is awareness now there is an urgency from the government to look at restarting