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The 3rd Bund Summit

Bund Summit Series (I)

The 3rd Bund Summit and Fifth Annual Conference of the Pu Shan Foundation

Recovery, Challenges and Sustainability in the post-COVID Era

On Oct 22-24, China Finance 40 Forum held the 3rd Bund Summit in Shanghai. A non-governmental professional conference with global participation, the event brings together senior policymakers, financial executives, and academic leaders worldwide to discuss key global issues such as post-pandemic economic recovery, climate change, Fintech, asset management, as well as China’s financial opening.

The first morning of the event focused on risks and policy responses in the midst of global economic recovery. The opening spotlight was given to New York Fed President, John Williams, and PIIE President and member of the Bund Summit’s International Advisory Council, Adam Posen. The talk covered a wide range of policy issues including the average inflation targeting framework, policy instrument such as use of the Fed’s balance sheet, current financial risks and the prospect of CBDC. As commented by the host of the plenary session, Shanghai Finance Institute President Qian Yingyi, "This dialogue helped us to understand the logic of Fed's monetary policy."

John Williams (left) and Adam Posen (right)

The dialogue was followed by two fascinating Bund Roundtables.

The first roundtable discussed the challenges and solutions for emerging economies to attain sustainable recovery in the post-pandemic era. The moderator, CF40 advisor and former DMD of the IMF, Zhang Tao, raised three major concerns in emerging markets for the panelists to address, i. e. ‘a tale of two worlds’ or the divergent economic recoveries, climate change, and improvement of global governance including the roles of multilateral financial institutions.

The panel agreed on the severity of vaccine shortage in emerging economies. Robert Rubin, CFR co-chairman emeritus, former US Treasury Secretary and member of the Bund Summit’s International Advisory Council, said developed economies should increase vaccine supply and provide debt relief to emerging economies. He also emphasized the importance of effective governance and US-China cooperation in meeting challenges in emerging market countries.

José Antonio Ocampo, now professor at Columbia University and former UN Under-Secretary General for Economic and Social Affairs echoed the need to increase vaccine supply in emerging markets and suggested waiving vaccine patent as a way to achieve it. He reckoned that multilateral development banks, or MDBs, could function as financiers in economic recovery, climate change, and debt restructuring.

New Development Bank president Marcos Troyjo called for “re-globalization” and more interdependence in the face of growing global issues. He saw the positive role of MDBs in the amount of crowding effects they generate for social infrastructure, climate action and a greener economy.

David Daokui Li, director of the Institute for China’s Economic Practice and Thinking at Tsinghua University listed four major challenges for emerging countries – vaccination, debt, supply chain, and decarbonization – and called that the world needs to get back on the track of multilateralism for those global challenges


Bund Roundtable on Emerging Market Economies

The second roundtable was designed with the recognition of 50th anniversary of the end to the Bretton Woods System in 1971. Moderated by Wei Shangjin, member of Pushan Foundation Academic Committee and professor of Finance and Economics at Columbia University, the panel discussed the evolution of international financial system over the past 50 years.

Jean-Claude Trichet, chairman of International Advisory Council of Bund Summit and former president of the European Central Bank first analyzed the driving force behind changes in the international monetary system and the function of the flexible exchange rate regime. He expected full convertibility of the Renminbi and a fully multipolar universe for the monetary system where SDR could be a real currency and a potential unit of payment.

Former governor of Bank of Japan and member of the Bund Summit’s International Advisory Council, Masaaki Shirakawa shared his thought on whether countries actually enjoyed autonomous monetary policy under the flexible exchange rate system, and expressed concerns with the zero interest rate policy and lack of monetary policy space for central banks. He further analyzed the validity of inflation targeting given that its assumptions are becoming increasingly questionable, and called for a new monetary policy framework which fits well with the current situation.

Pu Shan Foundation chairman and CASS academician, Yu Yongding, analyzed the potential default and monetarization of US debt and their impacts on investors and developing countries. He cautioned against another round of taper tantrum once the US starts to exit from QE and said cross border capital flows should be better supervised and regulated. In addition, China should push forward its agenda of RMB internationalization.

In the last presentation, Barry Eichengreen, Professor of Economics at UC Berkeley, talked about the consequences of the collapse of Bretton Woods: the Mussa Puzzle, the rise of international reserve holdings, the continuation with managed floats, crawling pegs or even fixed exchange rates, the incomplete insulation of flexible exchange rates, and the 21st century version of the Triffin Dilemma. The panel also shared views on the prospect of CBDC and its impact the on international monetary system.


Bund Roundtable on the 50th Anniversary of the Dissolution of the Bretton Woods System

The Friday morning was ended up with the ceremony of the 7th Pu Shan Award for Distinguished Paper on World Economy. In the speech for the ceremony, honorary chairman of Pu Shan Foundation, Wang Luolin, cherished Professor Pu Shan for his academic achievements and noble characters. This year’s Pu Shan Academic Prize was given to Wei Shanjing, Xie Zhuan, and Zhang Xiaobo for their work From “Made in China” to “Innovated in China”: Necessity, Prospect, and Challenges. Pu Shan Policy Prize was given to Shen Songcheng and Xie Jie for The Scale of Social Financing and Monetary Policy Transmission – Selection of Intermediary Target Based on Credit Channels; and Song Yan, Xu Qiyuan, Dong Yan, Su Qingyi, Zhao Hai, and Yao Xi for US-China Trade Conflicts and Further Opening. The awards were presented by Pu Shan Foundation chairman Yu Yongding, with ceremony hosted by Zhang Bin, CF40 non-resident senior fellow and deputy director the Institute of World Economics and Politics at CASS.



Bund Summit Series (II)

Opening Ceremony & Plenary Session I on post-COVID recovery,

and Plenary Session II on climate change

The second day of the Bund Summit, October 23rd, featured two Plenary Sessions.

On the morning of the day was Plenary Session I & Bund Summit Opening Ceremony themed ‘Recovery, Challenges and Sustainability in the post-COVID Era’, moderated by CF40 Secretary-General Wang Haiming.

The session kicked off with three welcome remarks, from Tu Guangshao, Executive Chairman of the Bund Summit Organizing Committee and Chairman of the Executive Council of Shanghai Finance Institute (SFI), Jean-Claude Trichet, Chairman of the Bund Summit International Advisory Committee and former President of the European Central Bank, and Xie Zhenhua, China Special Envoy for Climate Change.

In his remarks, Tu pointed out that the city of Shanghai needs to fulfill dual roles in its quest to become an international financial center under the dual circulation paradigm. On one hand, its financial and capital market should play a bigger part in enabling a sound domestic circulation; on the other hand, it should step up going-global effort and build its capacity to allocate global financial resources, so as to promote the mutually-reinforcing development between the domestic and international circulations.

From a global perspective, Trichet saw four global public goods as fundamental in the post-pandemic period. First is a more solid and confident concept of governance at the global level; second, in the time of COVID, global health, especially prevention and fight against pandemics, is a major global public good; third is protection of environment and prevention of climate change; and fourth is economic and financial sustainability.

Focusing on climate change, Xie called for further efforts to build global consensus on climate action, enhance climate governance, and deepen international cooperation and increase financial support to deal with this pressing challenge. He noted that China needs to make great efforts to achieve its 2030/60 goals especially with an underdeveloped and unbalanced economy. The Chinese government has set up a taskforce working on a “1+N” policy system to enable the goals, and will release successively a top-level design document, an action plan for the 2030 goal, and policy measures targeting key sectors and areas, Xie told the audience.

The Plenary Session was characterized by an array of high-level international dialogues contributed by four pairs of distinguished pundits — first by Henry Alfred Kissinger, former United States Secretary of State, and Qian Yingyi, President of Shanghai Finance Institute; second by Robert Rubin, Co-Chairman Emeritus of the Council on Foreign Relations (CFR) and former US Treasury Secretary, and Huang Yiping, Chairman of CF40 Academic Committee and Director of the Institute of Digital Finance at Peking University; third by Michael Spence, Professor of Economics and Dean Emeritus at Stanford Business School, and Senior Fellow at the Hoover Institution, and Liu Jun, President of the Bank of Communications; and fourth by Daniel Pinto, Co-President and Chief Operating Officer of JPMorgan Chase, and Feng Xiaoming, Managing Editor of the journal of China & World Economy.

Dr. Kissinger’s expressed concerns with global governance in the post-pandemic world, and suggested that governments and private institutions work to increase communication especially on matters that are not politically controversial like scientific research, historical understanding or business activities, so that a sense of community can redevelop on an international basis. He voiced hope for more discussions among nations despite conflicts, competitions and differences, so that all can work together to cope with common challenges like pandemics and climate change.

Prof Qian Yingyi (left) and Dr. Henry Kissinger (right)

Robert Rubin and Huang Yiping explored major issues including the pandemic situation and its long-term economic impact, the economic policy of the Biden administration, the United States’ debt problem and debt ceiling, and China-US relations.

Rubin saw the development of mutations not responsive to the vaccine as the biggest risk. He believed it is in the interest of vaccine supplier countries to see to it that vaccines are readily available in emerging market countries, but they are not doing enough. He applauded president Biden’s infrastructure spending plan, but reminded that policymakers should be more careful with the size of the package. Turning to the debt ceiling debate in the U.S., the former Treasury Secretary totally agreed with Jenet Yellen’s proposal that the U.S. should consider eliminating the ceiling, but he saw a lack of political ability and bipartisan will to do this. Going forward, Rubin reckoned that the U.S. would continue to have reasonably good growth. He further pointed out the importance that China and the U.S. work together, despite their differences, in key areas including trade, investment, pandemic prevention and climate change.

Prof Huang Yiping (left) and Mr. Robert Rubin (right)

Michael Spence and Liu Jun explored a different aspect defining the post-pandemic world, which is the digitalization trend, with special focuses on big tech regulation and its impacts on innovation, as well as data security and privacy. Spence directed attention to a shift in the focus of antitrust to dynamic efficiency, noting that regulators should keep an eye on big tech players tapping into their market influence to restrict access of new innovative companies and technologies. Liu noted that compared with the industrial age, regulators in the digital era have turned their focus from price to data security and ownership and whether existing tech giants are impeding innovation. In response, Spence stressed the importance of creating a level playing field for all financial institutions in their digital transformation, of responsible data management, of expansion of the access to data, and of transparency.

Liu Jun (left) and Michael Spence (right)

Pinto noted that fiscal and credit pressures risk stalling the recovery and add to challenges, but with massive stimulus, the world economy is likely to go through faster-than-trend growth in the two years to come; and with improved vaccination in the emerging market economies, global recovery from the pandemic’s blow has received an additional boost. However, in the mid-run, Pinto indicated, there is a need to address the tension between growth and inflation in addition to coping with the mounting debt pressure. He attributed the deceleration of recovery in the second half of the year to a combination of reduced mobility and reduced consumption because of price hikes. Yet, he held that the inflation is temporary, and expected it to stabilize next year. Turning to green economy, he called upon change in consumption behavior to facilitate green energy usage and further investment in sustainable energy production. As a representative of the business community, he believed the private sector has a big role to play in greening the economy.

Feng Xiaoming (left) and Daniel Pinto (right)

In addition to the dialogues, the Session heard the voices of four keynote speakers, who were Anabel González, Deputy Director-General of the World Trade Organization (WTO), Peng Chun, Chairman of China Investment Corporation (CIC), John Waldron, President and Chief Operating Officer of Goldman Sachs, and Ray Dalio, founder, Co-Chief Investment Officer and Co-Chairman of Bridgewater Associates.

In her speech, González highlighted the importance of trade in building a resilient, sustainable and inclusive world economy, and proposed three concrete actions that can help revitalize trade in the post-pandemic era. First is to ensure that a trade-led development model remains available to all, second is to strengthen trade resilience so that it serves as a sustained source of economic strength, and third is to give a bigger play to trade in boosting digital transformation, tackling climate change, and promoting inclusiveness. She concluded that cooperation at the global level will remain essential, with the financial community playing a particular role helping the trade community move forward.

Anabel González

Peng gave a special mention to the negative shocks brought about by global energy price hikes, and voiced worry about lack of momentum for global growth which cannot be solved without global cooperation. Against the backdrop where countries are facing bottlenecks financing their massive infrastructure and spending plans, Peng underlined the importance that countries improve the investment environment and work together to accelerate the funding for sustainable growth. He also drew attention to the role of sovereign wealth funds especially in emerging market economies as an important source of stable long-term capital.

Peng Chun

Waldron talked about sustainability across two dimensions: inclusive growth, and climate transition, stressing that it was impossible to truly address one without the other. The uneven recovery across sectors and countries given their different pre-COVID economic positions has added to the uncertainties hindering an inclusive world economy. The pandemic has accelerated the inequality trends that “have already been underway for decades”, and Waldron cautioned that inclusive growth is not a concern for individual countries, but for the entire international community. On the climate side, he cited an estimation that 100-150 trillion dollars in capital would be needed to decarbonize and achieve the climate targets, and highlighted the important role that China’s asset management and pension investment market can play in support of low-carbon transition.

John Waldron

Dalio looked back on history to shed light on the present and the future, and mentioned five big forces that have emerged. First is the fact that interest rates are hitting 0%, with mounting government debts and much higher taxes. He saw similar things in history a prelude to financial crisis and reserve currency devaluation; second is growing wealth and value gaps; third is the rise of one or more great powers challenging existing ones and the existing world order; fourth is the acts of nature especially pandemics and natural disasters; and fifth is knowledge and technological advances that have been raising living standards over time. The great challenge facing us is, in his words, whether we can use our “powers of inventiveness to manage these forces well to produce good outcomes, rather than destructive outcomes.”

Ray Dalio

Plenary Session II, which ran in the afternoon of the second day, concentrated on the topic of ‘Climate Change and Sustainable Finance: Trends, Opportunities and Challenges’. Moderated by Wang Xin, Director-General of the Research Bureau at the People's Bank of China (PBC), it combined a variety of formats including keynote speeches, report release, and roundtable discussion.

The leading highlight at the session was a dialogue between Tony Blair, former Prime Minister of the United Kingdom, and Jin Keyu, Associate Professor of Economics at London School of Economics — reminding the audience of the informative conversation between the two at the 2020 Summit on ‘Supply Chain, Climate Change and Pandemics’ which echoed the theme of the session this year.

Blair evaluated the emission reduction efforts of countries in recent years, probed into how to enhance global cooperation to cope with climate change and balance economic growth and decarbonization, and introduced British experience in greening the economy. He reminded that there remains a big gap between carbon reduction ambition and action, and called upon discussion of practical plans that could bridge the gap at the upcoming summit in Glasgow. He also pointed out one major inequality issue which is that developing countries still need to grow and industrialize and need energy to that end, and that could run counter to the need to reduce emissions. The underdeveloped economies suffer disproportionately from low-carbon transition, and in the critical next ten years it’s imperative that the developed countries, while meeting their own climate pledges, help to finance green investment and transition in the developing countries.

Jin Keyu (left) and Tony Blair (right)

The dialogue was followed by five keynote speeches, respectively by Liu Guiping, Deputy Governor of the PBC, Chen Wenhui, Vice Chairman of the National Council for Social Security Fund, Noel Quinn, Group Chief Executive of HSBC Holdings, Bill Winters, Chief Executive of Standard Chartered Bank and Co-Chair of the Business 20 (B20) Financing Growth Taskforce, and David Schwimmer, CEO of London Stock Exchange Group.

Liu Guiping recognized the tremendous changes that carbon neutrality efforts bring to the economy and people’s life, as well as the immense possibility it provides for green finance. According to him, the PBC is seeking to give bigger play to finance in resource allocation, risk management and market pricing, and enhance the green financial system featuring five pillars including standards, a framework for environment-related information disclosure, an incentive mechanism, green financial products and services, and international cooperation. He also proposed several measures to boost green finance in China, including implementing climate risk stress tests, building a more functional carbon market, and enhancing the coordination between fiscal and monetary policies.

Liu Guiping

Chen Wenhui emphasized the immense possibilities brought about by the boom in low-carbon investments with a prolonged time span and wide coverage. He was confident that the boom will sustain at least until the middle of this century, with new economies and industries attracting a huge number of investors hoping to have a share of the benefits amid the transition. With the costs of green energy and technologies on the decline, more and more sectors will join the decarbonization tide, and new industries will emerge. Meanwhile, new problems will arise and their solutions will inevitably bring forth new sectors and opportunities, noted Chen.

Chen Wenhui

Noel Quinn argued that to cut carbon emissions and spark lasting economic growth, public and private sectors have to work together to support new investment opportunities. The government should send clear and consistent signals to catalyze the transition, and the private sector needs to recognize the signals and invest accordingly.

Noel Quinn

Bill Winters shared a survey showing that 55% of companies say they are not transitioning fast enough, while 78% of investors say that most business leaders are failing to take action needed to transition their companies in time. He said there is a huge financing gap to realize the low-carbon transition especially in carbon-intensive sectors, and a large proportion of multinational companies are seeking to remove suppliers from the supply chain to serve their transition targets. He discussed the opportunities for suppliers, job creation and human society brought by the greening process, commended China’s recent moves in incentivizing green investments and financing, and of a particular note, expressed the expectation that Shanghai will become home to the world’s largest emission trading system and a crucial market for carbon trading for the entire world.

Bill Winters

David Schwimmer discussed the pivotal role financial markets must play in the global economy’s transition to net zero, and what is standing in the way of this ambition. According to him, finance is the only mechanism that could mobilize the trillions needed to realize this transition, and financial institutions are trying to channel capital toward decarbonizing sectors and green solution providers. However, hindering the financing for green transition are two major blockers, which are data and dialogue. He stressed the urgency of addressing this challenge and called for more transparency, dialogue and understanding to embrace a net zero future.

David Schwimmer

Plenary Session II witnessed the release of this year's Bund Report on Green Finance: Financing Carbon Neutrality led by Zhu Jun, Director-General of the International Department at the PBC. Li Keping, former President of CIC, provided comments.

The report presented six major viewpoints. First, it’s critical to control risks as a result of the low carbon transition; second, a sound carbon market is important for the transition, and finance has a big role to play; third, the PBC could proactively steer explorations of green finance; fourth, China is playing a major role in driving global cooperation in this field; fifth, three fundamental tasks have to be fulfilled to promote the sound development of green finance, which are green taxonomy, disclosure of climate-related information, and stress tests to evaluate the impacts of climate risks on financial stability; and sixth, the market should play a leading role in the green transition of the Belt and Road Initiative (BRI).

Li Keping said that energy shortage amid low-carbon transition could serve as a test for the effectiveness of our methodologies, assumptions and models for decarbonization; it is also a test for whether we could swiftly address the challenge, prevent an energy crisis, and whether our institutions, policies and mechanisms for energy production could withstand the shocks.

The whole day’s event wrapped up with a Bund Roundtable on ‘Multilateral Solutions to Climate Change'. The session was moderated by Euro50 Group chairman Edmond Alphandéry who is also Chairman of the Task Force on Carbon Pricing in Europe. Panelists joining the discussion were Jeffrey Sachs, University Professor at Columbia University, Mari Pangestu, Managing Director of Development Policy and Partnerships at the World Bank, Tharman Shanmugaratnam, Chairman of the Monetary Authority of Singapore (MAS), Lord Adair Turner, Chair of the Energy Transitions Commission and Senior Fellow at the Institute for New Economic Thinking, and Levin Zhu, member of CF40 Executive Council.

Bund Roundtable on climate change

Sachs expressed his hope for the upcoming G20 in Rome and COP26 in Glasgow that all major economies could make a clear commitment to reaching net-zero emissions by mid-century. He emphasized the importance of globally coordinated planning, noting that quantity regulation will be the main instrument to decarbonize the world energy system, which would require extensive planning. His third point was that we need a financial strategy which is currently not in place, and stressed the role of multilateral development banks (MDBs) in providing necessary financing for decarbonization. Finally, he cautioned that none of the above could happen with US-China relations in tension, and insisted that we need a world of cooperation, not of alliances.

Pangestu agreed with Sachs that developed economies should scale up their ambitions and fulfill their responsibilities in providing resources that are needed by developing countries to decarbonize. Noting that low-income economies suffer the most from climate change, she asserted that fairness is a global challenge and it is up to the global community to adopt a people-centered approach to address climate change, poverty and inequality. The estimates she shared suggested that current mobilization of financing is not enough to meet the climate and development challenges, and talking from a World Bank perspective, she echoed Sachs in stressing the importance of good plans over the long run for funding to go to the right places and serve its purposes.

Shanmugaratnam took off from the opportunities provided by the fight against climate change, that is, a virtual cycle between large-scale investments, faster decarbonization, job creation and inclusive global growth especially in the developing world. He noted that a large part of investment has to support innovation to make green energy affordable, reliable and widely accessible. If investments fail to stimulate innovation, it could lead to longer and higher inflation with price hikes of both dirty fuels and clean energy. However, investments in technologies that are not yet ready for the market could add to risks, and this is where the public sector could help mobilize private finance on an unprecedented scale. This would entail multilateral solutions, e.g. use of the MDBs to catalyze private finance, he suggested. Moreover, a global carbon market is critical.

Lord Turner stated that the core strategy to build a net-zero economy is to electrify the economy as much as possible and decarbonize electricity generation. In this regard, countries don’t have to take tightly coordinated actions but could have their own pace and approaches. While electrification is critical to reduce carbon emissions, he reminded that there are sectors that cannot be easily electrified, i.e. the ‘hard to abate’ sectors which include heavy industries, long-distance transports, shipping and aviation. But it’s exactly in these sectors that carbon pricing can be hugely effective because operations are based on professional decision-making where pricing and cost are a major consideration. In addition, a high degree of international coordination is needed in these sectors to ensure prices and regulation are similar across countries to inhibit transfer of production to places where high emission is allowed.

Zhu said that China offers immense potential for the development of the photovoltaic sector, with an exploitable reserve of optical energy of 141 trillion kilowatt-hours, 20 times the electricity generated in China in 2020. However, it is used at a low efficiency, around 10%, but even with that it still accounted for 200% of the total power consumed in the country. Zhu proposed that a higher price for carbon is a must to bring down carbon emissions, and there is not a reasonable expectation for the price of carbon at the moment. Another bright side of a higher price for carbon is that in the short run, providers of fossil fuels will reap higher sales revenue and capital recovery which could help smooth their asset transformation, he said.



Bund Summit Series (III)

Plenary Session III on Fintech and Report Release

The third day of the Bund Summit featured Plenary Session III in the morning and the release of two reports in the afternoon. The third plenary session revolved around the topic on how to balance the rapid development of digital technology and its regulation, with remarks and discussions touching upon issues such as anti-monopoly regulation, crypto currency and data governance.

The morning session kicked off with a keynote speech from Mr. Shang Fulin, Chairman of the Committee for Economic Affairs of CPPCC National Committee. In his remarks, Shang addressed the question about how to achieve sound integration between the financial sector and emerging digital technologies. While acknowledging that digital technology will greatly expand financial services by improving efficiency and accessibility, and bring all-round reforms to the financial industry, Shang stressed the importance of Fintech regulation in the process of integrating digital technology and financial services, noting that the integration wouldn’t change the relations between finance and the real economy, nor can it alter the basic features of finance where risk prevention and management is the top priority.  

Shang Fulin

Following Shang’s speech was a spotlight dialogue between Mr. Agustín Carstens, General Manager of the Bank for International Settlements and Prof. Bai Chong-En, Dean of the School of Economics and Management of Tsinghua University. The dialogue focused on how Fintech regulation can balance the relationship among efficiency, stability and fairness. According to Mr. Carstens, the lack of regulation on technology can lead to a serious vicious circle, impairing not only fair competition, but also stability of the financial system. He stressed the necessity of implementing functional supervision. Specifically, he pointed out that like systemically important banks or financial institutions, large global technology companies also feature systematic importance, so they should be subject to regulation that applies to the former when engaged in financial activities. Regulators need to ensure that all parties compete under the same conditions and eliminate the possibility of regulatory arbitrage. When asked about views on CBDC, Mr. Carstens held that CBDCs around the world reflect central banks’ response to people’s demand in this digital era. Compared with private sector crypto currencies, CBDCs have the highest credibility and are the most reliable form of currency with institutional support from central banks.

Bai Chong-En (left) and Agustín Carstens (right)

After the dialogue came the Bund Roundtable on ‘Digital Economy and Fintech: Efficiency, Stability and Fairness’. Joining the Roundtable were Prof. Huang Yiping, Chairman of CF40 Academic Committee and Director of the Institute of Digital Finance of Peking University, Mr. Tobias Adrian, Financial Counselor and Director of IMF Monetary and Capital Markets Department, and Prof. Jason Furman, Aetna Professor of the Practice of Economic Policy at Harvard University and member of the Bund Summit’s International Advisory Council. The discussion was moderated by Prof. Shen Yan, Deputy Director of the Institute of Digital Finance at Peking University.

Bund Roundtable on digital economy

During the discussion, Prof. Furman repeatedly emphasized the importance of ex ante anti-trust regulation. He said that regulators should ensure that the financial industry can realize better development with the help of technology, and the purpose of implementing regulation is to preserve the stability of the financial system, rather than to supervise technology. In terms of competition and privacy protection, Prof. Furman believed that the two are complementary, and promoting fair competition can help protect privacy to some extent. Prof. Huang clarified that protection of consumer rights and rather than monopoly is the biggest challenge posed by the digital economy in China. In view of the huge difference between the digital economy and traditional economy, in addition to stepping up anti-monopoly efforts, it is also necessary to develop a new regulatory framework to address key challenges. Concentrating on crypto currencies and CBDCs, Mr. Adrian summarized the benefits and risks of digital currencies and called for strict regulation on crypto currencies, which he believed can give rise to systematic risks.

The rest of the plenary session witnessed keynotes speeches from Mr. Tim Adams, President and CEO of Institute of International Finance, Mr. Huang Qifan, Vice President of China Center for International Economic Exchanges, Ms. Zhang Xiaohui, CF40 Non-Resident Senior Fellow and Dean of Tsinghua University PBC School of Finance, and Mr. Sun Tianqi, Director-General of PBC Financial Stability Bureau.

In his speech, Mr. Adams emphasized that in the process of digitalization, coordination and cooperation is the key to success for regulating big technology companies and crypto currencies issued by the private sector.

Tim Adams

Mr. Huang Qifan made a speech on data governance, stressing the importance to clarify relevant concepts and data rights. According to him, data is the basic and decisive factor of production for the development of the digital economy. The ownership of the data is shared by the parties in the bilateral transaction and owner of the data has the right of distribution.

Huang Qifan

Prof. Zhang Xiaohui also talked about how to balance privacy protection and the fair use of data. She suggested China learn from the EU practice, for example, implementing strict data privacy protection, and banning large technology companies from integrating different kinds of personal data. Prof. Zhang also called for regulation of algorithms and the establishment of the principle of openness and transparency in such regulation to ensure that users are treated fairly.

Zhang Xiaohui

In Mr. Sun Tianqi’s remarks, he emphasized that finance is a franchise industry, so people must hold license to provide financial services. Some financial products or services are designed for specific groups, and some can only be sold in certain jurisdictions. Relevant requirements should never be relaxed because of the emergence of a digital environment and regulators must be very strict with the boundaries of jurisdictions and customers in this digital era.

Sun Tianqi

The afternoon witnessed the release of two reports, Jingshan Report 2021: China's Financial Development under the Dual-Circulation Paradigm: A New Chapter, and Disclosure Standards for Sustainable Investment: Global Trends and China’s Practice.

This year, the Jingshan Report was led by Mr. Xiao Gang, CF40 Non-Resident Senior Fellow and Former Chairman of China Securities Regulatory Commission. Mr. Xiao began the event with a brief discussion of China’s financial sector under the new development pattern, highlighting the new missions and new challenges it faces. Following Mr. Xiao, the rest of the research team briefed the audience on the content of the Report. Dr. Xu Qiyuan, CF40 Director of Research and Senior Research Fellow of the Institute of World Economics and Politics of CASS, talked about his rethinking on promoting RMB internationalization. Ms. Zhu Jun, Director-General of PBC International Department, explained how RMB can play a bigger role in the Belt and Road Initiative. Mr. Ding Zhijie, Director of China Foreign Exchange Research Center of the State Administration of Foreign Exchange, explored the potential of Shanghai becoming a global RMB asset allocation center. Then Prof. Lu Ming, Distinguished Professor of Economics and Director of Shanghai Institute for National Economy at Shanghai Jiao Tong University, focused on the role of financial services in supporting city cluster development under the dual circulation strategy. Their presentation was followed by a Q&A with the media.

The second report was released by Mr. Tu Guangshao, CF40 Executive Council member and Chairman of SFI Executive Council. After that, a panel discussion was held focusing on a number of associated questions. How to develop standardized, detailed, and unified information disclosure standards and evaluation systems that are tailored to domestic conditions and align with international standards? How to balance the quality of information disclosure and firms’ compliance costs? How to encourage market entities to implement information disclosure requirements and support sustainable investing? Joining the discussion were Madam Laura Cha, Chairman of Hong Kong Exchanges and Clearing Limited, Mr. Zhang Weiguo, Former Member of International Accounting Standards Board and Former Chief Accountant, China Securities Regulatory Commission, Mr. Liu Ti, Vice President of Shanghai Stock Exchange, Mr. Henry Fernandez, Chairman and CEO of MSCI and Anne Richards DBE, CEO of Fidelity International. Mr. Wang Dequan, CF40 Council Member and member of the research project moderated the session.



Bund Summit Series (Ⅳ)

Cloud Sessions

Running alongside the on-site plenary sessions and report releases (Oct. 22-24) are eight cloud sessions – a special derivative of social distancing due to the pandemic. The virtual platform, however, enabled an even wider constellation of policymakers, financial elites, and scholars on topics of financial opening, financial support for pandemic responses and biodiversity, digital finance, macroeconomic policies, gold market, and pension finance.

Moderated by CF40 secretary general Wang Haiming, the first Cloud Session was designed for the venue city of Bund Summit, Shanghai, by exploring the development of Shanghai as an international financial center during the 14th five-year plan period, with the focus on market and institutional opening-up. Panelists shared insights on two major questions: What can Shanghai do to improve global resource allocation, foster fintech and green finance growth and develop a robust offshore financial system? How to enhance the city’s capacity and competitiveness and expand the international influence of ‘Shanghai Prices’ and ‘Shanghai Standards’? Panelists included: Tu Guangshao (Member of CF40 Executive Council and Chairman of the Executive Council at Shanghai Finance Institute), Huo Yingli (CPC Committee Secretary at the Foreign Exchange Trade System of China), Teo Floor (CEO of the Global Association of Central Counterparties), Loh Boon Chye (CEO of Singapore Exchange), Shi Liya (Director General of RMB Cross-border Business Department at PBC), Jerry Zhang (CEO of Standard Chartered Bank in China), Mark Wang (President of HSBC Bank in China), and Akash Shah (Chief Growth Officer of BNY Mellon).


A green transition has become a shared pursuit of the international community. What role could financial infrastructures play in supporting a green transition and green finance? Could Session II invited panelists with related expertise to discuss the practice, international cooperation, and prospects of financial infrastructure in support of green finance. They included: Xie Zhong (Chairman of the Shanghai Clearing House), Teo Floor, Tara Rice (Head of Secretariat of the Committee on Payments and Market Infrastructure at the Bank for International Settlements), Leslie Maasdorp (Vice President and CFO at New Development Bank), Julie Becker (CEO of Luxembourg Stock Exchange), Erik Berglof (AIIB Chief Economist), and Antoine de Guillebon (Head of Strategy and Planning at HSBC Bank in China). Zhang Lei, Head of Commodity Clearing Department at Shanghai Clearing House, served as the moderator.


Cloud Session III featured retrospect and prospect of financing pandemic prevention, preparedness and response, concerning about the equitable access to vaccines and treatments, producing suggestions on the responsibilities of international financial institutions, effective public–private partnerships and synergy among various financing mechanisms. In response to these challenges, the session gathered leading practitioners for in-depth dialogues, including Tharman Shanmugaratnam (Chairman of the Monetary Authority of Singapore), Jim Yong Kim (Vice Chairman and Partner of the Global Infrastructure Partners), Thomas Östros (Vice President at the European Investment Bank), Gordon G Liu (Peking University BOYA Professor of Economics at National School of Development and Dean of PKU Institute for Global Health and Development), and Bruce Gellin (Chief of Global Public Health Strategy at the Rockefeller Foundation). The moderator was Gene Ma, Head of China Research at Institute of International Finance.


The topic for Cloud Session IV is “Financing Biodiversity: Actions and Challenges”. The session examined the financial ways to counter the challenges of the biodiversity crisis and how nature – trees, bees and bat – can be considered as valuable financial assets. It was moderated by Deborah Lehr, Vice Chairman and Executive Director  of Paulson Institute, pooling together experienced panelists around the world, including: Wang Xin (Director-General of the Research Bureau at the PBC), Sir Partha Dasgupta (Frank Ramsey Professor Emeritus of Economics at University of Cambridge in UK), Simon Zadek (Chair of Finance for Biodiversity Initiative), Jacques Ripoll (CEO of Crédit Agricole CIB), and Andrew Deutz (Director of Global Policy of Institution and Conservation Finance at the Nature Conservancy).


Cloud Session V centered on the trends and challenges of digital transformation of global financial landscape, moderated by Shen Yan, deputy Director of the Institute of Digital Finance at Peking University. The panel discussed the major opportunities and challenges that digitalization brings to financial institutions and how to improve and innovate regulatory methods to promote efficiency, stability and fairness? Panelists of this session included: He Dong (deputy Director  of Monetary and Capital Markets Department at IMF), Gaëlle Olivier (member of Société Générale Group Management Committee and CEO of Société Générale Asia Pacific), Zhang Jianhua (President of Huaxia Bank), Liu Xiaochun (Vice President of Shanghai Finance Institute), Liu Weiguang (Vice President of Alibaba Group and General Manager of Intelligent New Finance at Alibaba Cloud), and Jerry Zhou (Founder, Chairman of the Board and CEO of Huifu).


The goal of Cloud Session VI is to promote the cooperation of the global gold market in the post-pandemic era. The panel, moderated by Vice President of Shanghai Gold Exchange, Gu Wenshuo, explored how global gold markets can work together for a new development paradigm, and what opportunities, as well as challenges, are lying ahead, in such areas as market governance, standard setting and cross-market cooperation. Panelists included: Wang Zhenying (President of Shanghai Gold Exchange), David Tait (CEO of World Gold Council), Ruth Crowell (Chief Executive of LBMA), Igor Marich (Managing Director for Sales and Business Development at Moscow Exchange), Albert Cheng (CEO of SBMA), Xu Xiaolan (General Manager of Precious Metals Business Department at ICBC), and CG Lai (CEO of BNP Paribas in China).


Cloud Session VII revolved around the topic, “Population Aging and the Construction of a Multi-pillar Pension System”, moderated by Zheng Bingwen, Director of the Centre for International Social Security Studies at CASS. The panel recognized the aging of population as a problem faced by all countries around the globe and tried to gather international experiences for China to develop the three pillars of the pension system, encourage all parties to participate, and innovate pension products. Panelists included: Cai Fang (Chief Expert of National Think Tank at CASS), Jane Hume (Minister for Superannuation of Financial Services and the Digital Economy), Wang Jiang (Mizuho Financial Group Professor of Sloan School of Management at MIT and Academic Committee Chairman of Shanghai Advanced Institute of Finance at Shanghai Jiao Tong University), Fu Fan (President of China Pacific Insurance), Nigel Wilson (CEO of Legal & General), Jiang Xiangyang (Chairman of Bosera Asset Management), and Zhang Xuyang (Chairman of Everbright Wealth Management).


To cope with the liquidity crisis triggered by the COVID-19 pandemic, central banks have introduced massive fiscal stimulus, resulting in inflation and asset price hikes. With the theme of “Asset Prices, Inflation Expectation and Exit from Economic Stimulus”, Cloud Session VIII explores several related questions: How effective are the policies of major central banks in balancing inflation, financial stability and economic recovery objectives? How should countries coordinate their exit from economic stimulus to minimize the impact on the global economy and financial stability? To answer these questions, the session gathered a group of leading experts for an in-depth discussion which included Yu Yongding (Chairman of Pu Shan Foundation and CASS Academician), Kevin Warsh (Shepard Family Distinguished Visiting Fellow in Economics at Hoover Institution), Claudio Borio (Head of Monetary and Economic Department at Bank for International Settlements), Catherine L. Mann (External Member of the Monetary Policy Committee at Bank of England), and Gao Shanwen (Chief Economist of Essence Securities).