Zhang Yansheng (hereafter referred to as “Zhang”):It’s a really good question. For me, the answer is very simple. Both global and Chinese economy have recovered from the 2008 financial crisis as of 2017. At this point, how will Asian economy develop in the near future?

　　Fundamentally, what stage is Asian economy at? Although we are positive about global, Asian and Chinese economy, we have to make clear that global economy is still undergoing restorative growth. In other words, we have got out of the financial crisis, but it will still take four to five years to go back to the normal growth level.

　　Zhao: As we can see from the indicator, global economists are very optimistic about Chinese economy. What do you think will Chinese economy have on Asian economy? Will there be another potential financial crisis in Asia?

　　Zhang:Chinese and American economy are top two contributing factors to Asian economy. Globally, Chinese economy accounted for 15 per cent of global economy in scale, but contributed 30 per to global economy.

　　Undoubtedly, China’s contribution to Asian economy is a lot higher than that of US economy. As chairman Xi Jinping said during his keynote speech at the Davos Summit, China would contribute $8 trillion to global innovation through import, something no other country can compare.

　　When I paid a visit to Latin American countries for field research, many local friends would tell me that they weren’t afraid that China’s economy growth slowed down, but that China shifted its economy model. For example, some Brazilian friends told me that if China stopped importing iron ore from Brazil and stopped importing beans from Argentina, they wouldn’t know what they could do else. When I did some research, I found that trade volume between China and Latin American countries skyrocketed by 22 times for the past decade. Imagine the vast opportunities brought by Chinese economy to local economy.

　　The “Gordon Myth”

　　Zhao: The Chinese government seems to be increasingly emphasizing on the concept “turning from virtual to real economy”. For the past few years, Chinese internet and virtual economy boomed. However, the Chinese government seemed to be encouraging capital to go to real economy. What does this mean? What impact will such policy have on the internet and virtual economy?

　　Zhang:For sure, such policy preference will further promote China’s innovation and internet economy. 1990 witness the IT revolution, which led to the US the longest boom cycle. However, as IT bubble burst in 2001, global capital dropped by 53 per cent and continued to drop until 2004. What happened next? Financial crisis and real estate bubble, as we all know. As a matter of fact, the Brexit and the election of Donald Trump both reflected people’s dissatisfaction towards “turning from real to virtual economy”.

　　Zhao: Will cutting-edge technologies such as AI and new energy vehicle bring about another industrial or technological revolution and thus lead to another economy boom?

　　Zhang:This is actually a very controversial issue. Recently, many economists are talking about the “Gordon Myth”, a concept come up with by a macroeconomist at Northwestern University. Basically, it’s about the paradox between the technological boom and dropping productivity. Statistics suggest that global labor productivity in 2015 dropped to merely 70 per cent that of a decade ago. This rule also applied to China. At this point, we’ve got to reflect how can we apply concepts such as new technology, technology revolution, new industries, new businesses, etc., to the supply and manufacturing end and innovation chain and thus bringing about real benefits to the industry.

　　Sharing economy can’t bring about revolutionary change

　　Zhao: What do you think of the sharing economy? Does sharing economy belong to supply side reform by improving supply side resource efficiency?

　　Zhang:In fact, sharing economy is still at the primary stage, so there’s still a long way to go. How come? IT revolution is important because it significantly transformed global logistics and supply chain management. Thanks to the IT revolution, a product could be manufactured by different players around the world, while China also became the biggest beneficiary. In comparison, sharing economy is more like a complement to the existing business model. Fundamentally, sharing economy only deals with the storage issue and perfects it, but won't have much revolutionary impact on the supply end.

　　2012, a turning point

　　Zhang:Since 2012, China has made historical progress in innovation. Back in 2010, China’s National R&D Index was still only around 1.75. The Chinese government’s goal at that time was to reach 2, but there’s nothing much for the government to do, since it was enterprises’ willingness to invest in R&D that mattered.