China and the West are in for a fierce technological competition, but both sides must set aside some space for cooperation, at least on issues that are absolutely necessary, at the same time of competition. Especially in climate change and economic recovery, the West must cooperate with China in order to find solutions. The rise of China is justified, but obviously meets with increasing opposition from the West. The most important bilateral relations of the 21st century are the U.S.-China relations, and Europe can help open a more productive US-China dialogue.

We have these very abnormally low levels of inflation, and this very abnormally low level of anchoring of future expectations of inflation, it is because the functioning of our economy is not correct. And that depends on governments, on parliaments, on the measures they take, and also on the private sector. So I expect that the other partners, other than the central banks, will do their job in all countries in all continents. And that will alleviate the burden, which presently is very abnormally on the central bank only, in some respect. 

Revenue is a function of current growth, and the growth rate is too low. So Minister of Finance is facing a dilemma. On the one hand, if you continue to use expansionary fiscal policy to support economic growth, then the fiscal position would be worsening. But if you don’t want to continue expansionary fiscal policy and try to reduce government expenditure, then the growth rate will fall. It will form sort of a vicious circle. we have to choose a less evil. ‘growth is the hard truth’, Growth is important, extremely important. So China should use more expansionary fiscal policy to stimulate the economy, especially support infrastructure investment. People’s Bank of China should use more expansionary monetary policy to support expansionary fiscal policy.

Standing at a new starting point, we will adhere to the path of market-oriented, law-based and internationalized development, take steady steps to ease restrictions on cross-border investment and financing, improve the underlying alignment of institutions and rules, enhance the predictability and stability of policies, and transform partial channel-based opening-up to comprehensive institutional opening-up.

China should draw lessons from Japan’s experience. First, it should attach great importance to preventing economic bubbles and work to secure sustainable economic growth; second, monetary policies should not be set at targets beyond reach, while they should still serve their due roles in maintaining a steady financial environment and stabilizing prices and the financial market; third, China should never compromise its long-term goals to achieve its short-term targets no matter how important they are.