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Tsinghua PBCSF
Chief Economists
Forum
Turbulent 2022
Edited by
Jiandong Ju
Tsinghua PBCSF Chief Economists Forum
Jiandong Ju
Editor
Tsinghua PBCSF
Chief Economists
Forum
Turbulent 2022
Editor
Jiandong Ju
PBC School of Finance
Tsinghua University
Beijing, China
ISBN 978-981-19-8488-4 ISBN 978-981-19-8489-1 (eBook)

https://doi.org/10.1007/978-981-19-8489-1
© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer
Nature Singapore Pte Ltd. 2023
This work is subject to copyright. All rights are solely and exclusively licensed by the
Publisher, whether the whole or part of the material is concerned, specifically the rights of
reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in
any other physical way, and transmission or information storage and retrieval, electronic
adaptation, computer software, or by similar or dissimilar methodology now known or
hereafter developed.
The use of general descriptive names, registered names, trademarks, service marks, etc.
in this publication does not imply, even in the absence of a specific statement, that such
names are exempt from the relevant protective laws and regulations and therefore free for
general use.
The publisher, the authors, and the editors are safe to assume that the advice and informa-
tion in this book are believed to be true and accurate at the date of publication. Neither
the publisher nor the authors or the editors give a warranty, expressed or implied, with
respect to the material contained herein or for any errors or omissions that may have been
made. The publisher remains neutral with regard to jurisdictional claims in published maps
and institutional affiliations.
This Palgrave Macmillan imprint is published by the registered company Springer Nature
Singapore Pte Ltd.
The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore
189721, Singapore
Contents
1 Introduction 1
Jiandong Ju
2 Dialogue with Ray DALIO—Development
and Cooperation in the New World Order 7
Ray Dalio
3 Outlook on the World Economy, Finance, and Global
Order 19
Justin Yifu Lin, Shijin Liu, Yongding Yu,
and David Daokui Li
3.1 China Needs to Maintain a Dynamic Economic
Growth Rate and Speed up the Process of Opening Up 20
3.2 Accelerate the Promotion of Green Technology
Innovation in China and Turn Climate Change
Pressure into a Driving Force for Innovation Growth 24
3.3 Adjusting the Structure of China’s Overseas Assets
to Cope with New Changes in the International
Monetary System 28
3.4 Coordinate Epidemic Prevention and Control
and Economic Development Goals, Improve Life
Expectancy and People’s Welfare and Maintain
Strategic Focus and Patience 37
v
vi CONTENTS
3.5 Discussion: The Enlightenment of the Japanese

Experiences and Lessons on China’s Economic Growth 41
4 China Economy and Policy Outlook 49
Jianguang Shen, Ting Lu, Tao Guan, Xunlei Li,
and Qing Wang
4.1 Facing the External Risks of Stagflation in the United
States, China Should Boost Domestic Demand
and Promote Consumption 50
4.2 Facing Four Major Internal Risks, Make a Good
Policy Combination 53
4.3 Stabilizing the Macro Economy and Maintaining
Epidemic Prevention and Control, China’s Two Major
Measures to Address the Three Major Global Challenges 58
4.4 Tax Reform Narrows Income Gap, the Third
Distribution Achieves Common Prosperity 62
4.5 Asset Prices Reflect the Economic Situation in a Timely
Manner, and Further Attention Should Be Paid
to the Impact of the Epidemic and Real Estate Issues
in the Future 65
4.6 Discussion: Boost the Current Chinese Economy
and Play a Good Fiscal Policy Combination 68
5 Innovation, Finance, and Tech Competition 79
Qifan Huang, Xiaohui Zhang, Lan Xue, Wensheng Peng,
and Jiandong Ju
5.1 “Make Great Efforts to Improve Finance” is the Key
to Deepening Reform, Activating Innovation
and Expanding Opening Up 80
5.2 Scientific and Technological Innovation is the Core
of Great Power Competition and the Starting Point
of Financial Services for the Real Economy 85
5.3 Clarify Sino-U.S. Technology Competition
and Strengthen Cooperation in Innovation 89
5.4 Promoting its Own Technological Innovation
and Coping with the Decoupling of Sino-US Technology 93
5.5 The Upgrading of Industrial Structure
Requires the Formation of a Virtuous Circle
of “Innovation-Scale” 96
CONTENTS vii
5.6 Discussion: Develop Scientific and Technological

Innovation to Cope with the Competition of Major
Countries 98
6 Monetary Policy and Economic Growth 105
Yiping Huang, Songcheng Sheng, Haizhou Huang,
Jianhua Zhang, and Bin Zhang
6.1 Adhere to a Monetary Policy Based on Aggregates
and Be Cautious About Structural Monetary Policy 106
6.2 Getting the Economy up by Intensifying Investment
and Counter Cyclical Measures 111
6.3 The Sino-US Interest Rate Gap is Inverted, and It
is Sooner Rather Than Later for China to Stabilize
Growth 115
6.4 Combining Fiscal and Monetary Policies to Improve
the Efficiency of Macro Policies 120
6.5 Responding to the Epidemic Requires Monetary Policy
“Fire Prevention, Fire Fighting, Disaster Relief” 123
6.6 Discussion: Monetary Policy to Stabilize Exchange
Rate, Credit and Residents’ Consumption 127
References 135
Index 137
List of Contributors
Ray Dalio Founder of Bridgewater Associates.

Tao Guan Global Chief Economist at BOC International (China) CO.,
LTD.
Haizhou Huang Managing Director, China International Capital Corpo-
ration.
Qifan Huang Former Mayor of Chongqing Municipality.
Yiping Huang Sinar Mas Chair Professor of Finance and Economics,
Deputy Dean of the National School of Development, and Director of
the Institute of Digital Finance, Peking University.
Jiandong Ju Unigroup Chair Professor at PBC School of Finance in
Tsinghua University, Director of Center for International Finance and
Economic Research (CIFER) of Tsinghua NIFR.
David Daokui Li Mansfield Freeman Chair Professor of Economics
at Tsinghua University, Professor of the School of Social Sciences at
Tsinghua University, Director of the Academic Center for Chinese
Economic Practice and Thinking (ACCEPT) at Tsinghua University,
Founding Dean of Schwarzman College at Tsinghua University.
Xunlei Li Chief Economist at Zhongtai Securities.
ix
x LIST OF CONTRIBUTORS
Justin Yifu Lin Dean of Institute of New Structural Economics, Dean of

Institute of South-South Cooperation and Development and Professor
and Honorary Dean of National School of Development at Peking
University.
Shijin Liu Deputy Director of the Committee on Economic Affairs of
CPPCC National Committee, Vice Chairman of the Fourth Council
of China Development Research Foundation, Dean and Professor of
School of Economics and Management Harbin Institute of Technology,
Shenzhen.
Ting Lu Chief China Economist at Nomura.
Wensheng Peng Chief Economist at China International Capital Corpo-
ration (CICC).
Jianguang Shen Chief Economist at JD Group.
Songcheng Sheng Adjunct Professor of Finance and Economics, CEIBS;
Former Director General of the Financial Survey and Statistics Depart-
ment, the People’s Bank of China; Professor at Shanghai University of
Finance & Economics; Doctoral supervisor at PBC School of Finance,
Tsinghua University.
Qing Wang Partner, Chairman & Chief Economist of Shanghai
Chongyang Investment Management CO., LTD.
Lan Xue Dean of Schwarzman College at Tsinghua University, Director
of China Institute for Science and Technology Policy at Tsinghua Univer-
sity (CISTP).
Yongding Yu Senior Fellow of the Chinese Academy of Social Sciences.
Bin Zhang Senior Research Fellow, Deputy Director at Institute of World
Economics and Politics at Chinese Academy of Social Sciences.
Jianhua Zhang Director of Research Center for Financial Development
and Regtech, THUIFR, Former Director, President, Deputy Secretary of
Party Committee at Hua Xia Bank Co., Ltd.
Xiaohui Zhang Dean of PBC School of Finance at Tsinghua University.
CHAPTER 1
Introduction
Jiandong Ju
Abstract Tsinghua PBCSF Chief Economist Forum, known as

Wudaokou Forum, holds annually in PBC School of Finance at Tsinghua
University, hosted by Center for International Finance and Economic
Research (CIFER). The Forum was founded in March 2019, in coop-
eration with JD.Com. Due to COVID-19, the annual meeting in 2020
was missed, and the second annual meeting held in April 2021. As
the third annual forum, consisted with the style before, twenty leading
chief economists were invited to give their opinions on the main theme
which is the outlook in economy and policies in China and a changing
world order in 2022 this year. The forum consists of four roundtable
discussions with themes of (1) Outlook on the World Economy, Finance
and Global Order, (2) China’s Economic and Policy Outlook, (3)
Innovation, Finance and Tech Competition, and (4) Monetary Policy
and Economic Growth. In the roundtable, each speaker first delivered
his/her main opinion and then speakers went to heated discussions. This
volume is an overview of the forum.
J. Ju (B)
PBC School of Finance, Tsinghua University, Beijing, China
e-mail: jujd@pbcsf.tsinghua.edu.cn
© The Author(s), under exclusive license to Springer Nature 1

Singapore Pte Ltd. 2023
J. Ju (ed.), Tsinghua PBCSF Chief Economists Forum,
https://doi.org/10.1007/978-981-19-8489-1_1
2 J. JU
Keywords Tsinghua PBCSF · Chief Economist Forum · Economy ·

Policy · World Order
Tsinghua PBCSF Chief Economist Forum, known as Wudaokou

Forum, holds annually in PBC School of Finance at Tsinghua
University, hosted by Center for International Finance and Economic
Research (CIFER). The Forum was founded in March 2019, in cooper-
ation with JD.Com. Due to COVID-19, the annual meeting in 2020 was
missed, and the second annual meeting held in April 2021.
This is the third annual forum, which was held online on May 14,
2022. Twenty leading chief economists were invited to speak in the
forum. Over 11 million audiences attended the forum online, and there
were more than 30 thousand reports of the forum in the media. The
forum is viewed as the highest level of economic forum with the largest
audiences in China.
The main theme of the forum is the outlook in economy and poli-
cies in China and a changing world order in 2022. The forum consists
of four roundtable discussions with themes of (1) Outlook on the
World Economy, Finance and Global Order, (2) China’s Economic
and Policy Outlook, (3) Innovation, Finance and Tech Competition,
and (4) Monetary Policy and Economic Growth. In the roundtable,
each speaker first delivered his/her main opinion and then speakers went
to heated discussions.
Mr. Ray Dalio, the founder of Bridgewater Associates, delivered the
keynote speech about “the Changing World Order” and then discussed
current Russian-Ukraine conflicts and issues of changing world order
with Justin Yifu Lin, Shijin Liu, Yongding Yu, David Daokui Li, and
Jiandong Ju.
At the roundtable one, Justin Yifu Lin, professor and the dean of
Institute of New Structural Economics at Peking University, emphasized
the importance for China to maintain high growth rate and explained why
he believed that China still has high growth potential. Shijin Liu, Deputy
Director of the Committee on Economic Affairs of CPPCC National
Committee, talked about three ways to respond to the climate change,
and in particular, the importance of transforming the climate change pres-
sure into green technology innovations. Yongding Yu, a Senior Fellow
of the Chinese Academy of Social Sciences, shared his understanding
1 INTRODUCTION 3
of the post-Bretton Woods international monetary system and why he

believed that it is necessary to adjust the structure of China’s foreign
assets. David Daokui Li, Mansfield Freeman chair professor of economics
and the director of the Academic Center for Chinese Economic Practice
and Thinking (ACCEPT) at Tsinghua University, shared his interesting
studies on benefits and costs in terms of life expectancy about the
epidemic control and decreases of consumptions.
At the roundtable two, Jianguang Shen, the chief economist at JD
Group, discussed issuing consumption vouchers to boost the domestic
demand. Ting Lu, Chief China Economist at Nomura, discussed his view
on the economic impact caused by the ongoing COVID-19 outbreak and
the effectiveness of expansionary policies. Tao Guan, the Global Chief
Economist at BOC International (China) CO., argued that China should
allow the RMB exchange rate to fluctuate in both directions, letting
the exchange rate serve as a “buffer” to internal and external shocks.
Xunlei Li, Chief Economist at Zhongtai Securities, discussed through
subsidies for residents and through the fiscal policy stimulating consump-
tion, to improve the income distribution, and to promote the sustainable
growth of China’s economy. Qing Wang, Chairman & Chief Economist
of Shanghai Chongyang Investment Management CO., called for the
attention about the Impact of the Epidemic and the situation in real estate
market.
At the roundtable three, Qifan Huang, former Mayor of Chongqing
Municipality, emphasized to change the focus of innovation in China,
from the past customer-centric innovation and efficiency-driven innova-
tion to engineering technology innovation and scientific research-based
innovation, and discussed three structural and fundamental problems in
China’s capital market. Xiaohui Zhang, Dean of PBC School of Finance
at Tsinghua University, discussed that the major challenge facing China’s
technological innovation lies in how to properly guide capital into the
fields of basic research and technological innovation to promote the devel-
opment of the real economy. Lan Xue, Dean of Schwarzman College at
Tsinghua University, discussed the technology competition and cooper-
ation between the U.S. and China. Wensheng Peng, Chief Economist
at China International Capital Corporation, proposed two viewpoints,
the separation of industry and finance, and to handle well the relation-
ship between monopoly and competition. Jiandong Ju, Unigroup Chair
Professor at PBC School of Finance in Tsinghua University, explained
his theory of a virtuous circle of “Innovation-Scale” and argued that
4 J. JU
China’s technological innovation and industrial upgrading cannot be

achieved without breaking the monopoly of international technology on
the Chinese market.
At the roundtable four, Yiping Huang, Sinar Mas Chair Professor
of Finance and Economics at Peking University, proposed his heated
debated view that policies should be adopted “to save the economy at
all costs.” Songcheng Sheng, former Director General of the Financial
Survey and Statistics Department, the People’s Bank of China, forecasted
2022Q2 GDP and its growth under different scenarios, and explained
the lost consumption during lockdown with his now well-known hair cut
example that “my hair has not been trimmed for three months. After
the lockdown is lifted, it is impossible for me to trim my hair three
times a month.” Haizhou Huang, Managing Director at China Inter-
national Capital Corporation, explained reasons for the inversion of the
U.S.-China yield spread and argued that it should be sooner rather than
later for China to stabilize growth. Jianhua Zhang, former President of
Hua Xia Bank Co., discussed his understanding of structural monetary
policies. Bin Zhang, Deputy Director at Institute of World Economics
and Politics at Chinese Academy of Social Sciences, argued that in the
epidemic environment, how lowering interest rates play the roles as fire
prevention, firefighting, and disaster relief.
Most of chief economists come from the market, working in invest-
ment banks, big firms, and financial organizations. Thus, Tsinghua
PBCSF Chief Economist Forum is mainly policy and real issue driven.
The forum focuses on cutting-edge economic and financial issues in China
and the world. Usually in the first half of each year, we bring leading
chief economists, together with other leading experts in policies, gath-
ering in PBCSF at Tsinghua University and discussing the most important
economic, financial, technology, and other policy issues at the time.
Tsinghua PBCSF Chief Economist Forum is an open, free, and neutral
platform for leading policy experts all over the world to exchange and
communicate, to discuss and debate, to enhance and deepen our under-
standing of the most important policy issues in this beautiful planet. Of
course, each speaker in the forum speaks his/her own opinion, neither
representing organizations they are working, nor Tsinghua University.
I would like to thank President Xiqin Wang of Tsinghua University and
Dean Xiaohui Zhang of PBC School of Finance at Tsinghua University.
Without their supports, this forum will not be possible. I thank research
fellows at CIFER, who helped me editing this book: Ms. Sijia Li helped
1 INTRODUCTION 5
editing Introduction. Ms. Jialiang Zhang helped editing Chapter 2. Mr.

Yuankun Li helped editing Chapter 3. Ms. Jianghuai Hou helped editing
Chapter 4. Ms. Suyu Yang helped editing Chapter 5, and Ms. Yujia Yang
helped editing Chapter 6. My thanks go to CIFER administration team,
Ms. Luyuan Yang, Ms. Zhiwei Xia, and Ms. La Wei, who worked very
hard and efficiently to help me organizing the forum. I also thank Ms.
Yuxi Ding who helped me to invite speakers. Last but not least, I thank
Mr. Jacob Dreyer from Palgrave who initiated this book, and Mr. Naveen
Dass and many others from Palgrave who helped us putting this book in
print.
CHAPTER 2
Dialogue with Ray DALIO—Development

and Cooperation in the New World Order
Ray Dalio
Abstract Ray Dalio, Founder of Bridgewater Associates, and Jiandong

Ju, Unigroup Chair Professor at PBC School of Finance in Tsinghua
University, sponsored a roundtable discussion on “Development and
Cooperation in the New World Order.” The discussion began with Mr.
Dalio’s notion of the Great Cycle, which states that each dominating
country in history has its own cycle. The changing process of domi-
nant country consists of a competition sequence: trade competitions, tech
competitions, capital competitions, and military competitions. As mili-
tary technology has improved dramatically, the ability to hurt human
beings has increased more than ever. If the two competing countries
reach the prisoner’s dilemma, each will be motivated to destroy each
other because we fear being destroyed by the other. To avoid armed war,
we have to be fearful of war, to be concerned about that, and hope-
fully, that level of concern could put avoiding it above everything else.
R. Dalio (B)
Bridgewater Associates, Westport, CT, USA
e-mail: yangly@pbcsf.tsinghua.edu.cn

https://doi.org/10.1007/978-981-19-8489-1_2
8 R. DALIO
Jiandong Ju expressed his understanding in changing world order that a

country must be strong enough to replace the former dominating power,
for example, by accounting for half of the world’s GDP. Throughout
history, the Netherlands was replaced by the United Kingdom, and the
United Kingdom was replaced by the United States. However, the OECD
predicts that by 2060, China’s GDP volume would only account for 25–
28% of global GDP. Even if China’s total economic volume exceeds that
of the U.S., it will no longer be a hegemonic state in the same way that
the U.S. is. A paradigm shift will occur in the change of the world order,
with no more change of major powers, and the hegemonic dominant
model will be replaced by the coexistence of several major economies
including China, the U.S., and Europe. Both Dalio and Ju believe that
in the new international order, China and the U.S. should compete in
an orderly manner, avoid conflict, maintain conversation, and collabo-
rate on economic development and technological innovation to achieve
win–win situations.
Keywords New world order · US-China collaboration · Technology

innovation
(Moderator: Jiandong JU; Participated guests: Ray Dalio, David

Daokui LI, Shijin LIU)
Jiandong Ju: Thank you, Mr. Dalio. It’s such a great presentation and
brings us to the past one thousand and five hundred years, especially the
last five hundred years. So, I guess everybody cares about peace in this
world. And as from your theory now, we are at a critical point to either
intensify the competition between big countries or possibly avoid military
competition and have peace. I kind of just want to understand the logic
of the sequence as your saying that would be the trade competitions, tech
competitions, capital competitions, and then military competitions in the
past. Could you please explain to us more, what do you think the current
situation which period we are, and naturally is that possible we may go to
the final period of military competitions?
Ray Dalio: We are saying they follow a sequence. Trade dispute at first,
and we can see from the news. Then, we see technology competition,
and then, we see a competition for geopolitical inflow to influence what
2 DIALOGUE WITH RAY DALIO—DEVELOPMENT … 9
countries around the world. And now, we are seeing capital and economic
competition, and we’re seeing those intensify.
The world doesn’t have a judge to play their case between competing
nations. As a result, the competition between the two countries will inten-
sify and eventually may cross the boundary of competition and become a
real conflict. So yes, obviously there’s a risk, and we should be very clear
about that. It’s being demonstrated very clearly, as Russian and NATO
countries conflict, from competition to conflict. But it doesn’t have to be
that way.
I have a principle: if you worry, you don’t have to worry. And if you
don’t worry, you need to worry. If you worry, then there is a greater
chance that will protect yourself against the things that you worry about.
I think that history is shown that some leaders may consider it a good
thing to go to a military war experience, but everyone regretted that kind
of military war. And I would wish that the same psychology that existed
after the war existed now, but unfortunately, a memory only lasts for the
person. We individually did not go through that experience and we don’t
have the benefit of that memory. So yes, I think that if it was put as the
number one objective to avoid military conflict, to have our competition
in our various ways between countries, it would reduce the odds of that
happening. Unfortunately, I don’t see many signs of that.
Jiandong Ju: Thank you, Ray. I remember once we heard Mr. Einstein
mentioning that. He said he did not know what would be used in World
War Three, but he knew that in World War Four, people would just
use rocks. Now, it is nuclear power time, is that possible the current
cycle would be different than before? Nuclear war is just unimaginable; if
nuclear power countries had a major war, that would destroy each other
and would be the worst thing to all of us. So, is that possible for this time
will be different?
Ray Dalio: Technologies of warfare, like technologies and everything,
have advanced enormously, so the capacity to hard destroy each other has
become greater than the benefit that is ever been. Also, it is held by more
countries than it has ever been helpful. It’s not just nuclear, but their
cyber, their space, and their other forms of warfare that have developed,
which means the capacity to harm is greater than it has ever been by a
lot. And also, that capacity exists in many other countries’ cases, so one
would say that the risks could be taken by any country. The risks of this
are greater if it’s applied to Russia in the NATO conflict because their
fighting is a conventional war that uses cyber right now, but if Russia lost
10 R. DALIO
that war and there is a reasonably high likelihood that they would not be
accepted that loss and could be an escalation to other forms of war.
So, I would say that we have to be fearful of that, we have to be
concerned about that, and hopefully, that level of concern could put
avoiding it above everything else.
Jiandong Ju: Thank you Ray. The major competition is between the
U.S. and China, so my question remains will it be any different this time?
We understand your theory of the big cycles, which is a dominant country
cycle, such as the Dutch being replaced by Britain and replaced by the
U.S.. People would say if those cycles go on, the next dominant country
would be China. Is that possible?
We may not see the dominant country’s replacement; instead, we see
the coexistence, a competitive coexistence, peaceful coexistence among
China, the U.S., and Europe. My main reason for that is one country,
to become a dominant country, would need to have a dominant power.
Both the Dutch and Britain had dominant power when became dominant
countries. The U.S.’s GDP share was more than 50% of the world after
World War II, but for China, according to predictions by OECD, even
forty years later, in 2060, China will already be the largest economy in
the world, and its GDP share would be just around 25–28% of the world
GDP. At that time, we would have the largest four economies: China,
India, the U.S., and the EU.
So, my question is given that we will not see a dominant country just
like the U.S. had before, do we see this time is different? We will have a
co-existence rather than the replacement of the dominant country.
Ray Dalio: I think you asked a very good question, and it is true that
for several years. There will be great powers between the United States
and China, some ways that the United States is more powerful, some ways
that China is more powerful, but that through be comparability in power.
That’s also a very risky period because no country fights a war knowing
the other one is more powerful. They would avoid the war, so comparable
periods of power mean that they are riskier than power-dominant period.
But I think you point out what an important difference is a cultural
difference. In Chinese history, there is an inclination to avoid conflicts; in
other words, Chinese leaders do not occupy and control in the same way
that the Western powers do. In the influence of Mediterranean culture,
Eastern culture, and Chinese culture, I think that the capacity to operate
in a way of coexistence has a real opportunity, depending on the behavior
of those parties. So, I don’t think it’s predestined that there has to be a
military war.
There is another phenomenon, which is called a prisoner’s dilemma.
The prisoner’s dilemma means, for example, if you have two entities, two
people, two countries, and you don’t know if the other country is going
to cooperate with you or destroy you, and clearly, cooperation is the best
path. What should you do? According to the prisoner’s dilemma, both
have the motivation to destroy each other, because we worry ourselves
would be destroyed by the other.
I think we could all understand these things and perhaps realized that
cooperation can create an environment that could be the best that the
world is ever seen. If there’s cooperation and healthy competition, it raises
living standards for everyone. If it’s possible, there should be cooperation
in avoiding this pattern.
Jiandong Ju: Thank you. Professor Li, do you have questions for Ray?
David Daokui Li: Yes, thank you very much for the wonderful speech,
which is extremely insightful to the force of your thoughts. I wish
our students at Tsinghua University, especially students in Schwarzman
Scholars, would be able to get a chance to get a thorough understanding
of your analysis.
In finance, on Wall Street, there is a phenomenon that if we talk about
something all the time, then that phenomenon disappears. For example,
there used to be a January effect in January. The January stock market
goes up, but today, we no longer observe this equity premium, because
people talk about it a lot. Let’s focus on the U.S. and China, with so
many people discussing the potential conflict between the U.S. and China
both virtually and in real life, and there are people like you so insightful
in giving talks to Chinese top decision-makers for advices, also we have
Chinese analysts talking about the US affair directly or indirectly.
So, when we talk so much about the potential conflict between the
U.S. and China, when we understand so well with each other, and when
we have so many interpersonal connections and so much information
exchange, will there be a situation where the US and China will be able to
work out a solution in the end? In such regard, you are making a tremen-
dous contribution, your saying also is, because you change the reality in
the end. Ray, please. Ray, please.
Ray Dalio: Well, I hope for that, and I’m doing my best and other
people are doing their best. Unfortunately, right now, there is almost no
12 R. DALIO
talking, no communication. There’s almost a close-mindedness, a prej-

udice. We are now at a point in time where we are seeking mutual
understanding, but there is a period when anybody who was describing
that there is another perspective was investigated as being a communist
sympathy. It’s almost becoming like that in the United States; it might
be a less extent in China. So, I wish that we got to spend time together
that we enjoyed each other, that we heard each other, and that we work
to common good outcomes.
So yes, I treasure these opportunities, but it’s almost reached the point
where I question whether even all be allowed to have these conversations
by either side. I would say what is more typical creating the prejudices,
polarizing either side and demonizing either side, that’s the pattern that
I am seeing more of. What I’m trying to do is to build the bridge
across communication to try to create more understanding and hope-
fully avoid that. But I must say it’s becoming increasingly appreciated,
it’s increasingly on that personal cost to do that.
Jiandong Ju: Thank you ray. Professor Liu, do you have the question
as well to Ray?
Shijin Liu: Thank you, Mr. Dalio, I have two questions for you if I
may. The first question is that you mentioned just now about the Russian-
Ukraine War. There’s an escalation of the Ukrainian-Russian war and
there will be a risk of nuclear war. This issue has been talked about and
is also a concern to a lot of people. I have realized there is a crew of
thought that Russia has nuclear power, when the conventional conflict
to be a certain degree, will that be an option? That’s why some people
are mentioning that actually, we should leave some room for Putin and
not push him too hard. There is a Chinese saying that just give the way.
I am not sure how you say this question, Mr. Dalio. So, this is my first
question.
In the second question, Mr.Dalio, you talked about the theory. I have
read your books and become a very big fan of your book. I think it is
necessary to look at the current situation from a long historical point of
view, but a lot of people have turned a blind eye to this. Just now, you
mentioned the technical factor and a lot of other factors as well. From
my perspective, I tend to believe that technical improvement and tech-
nical enhancement in the cycle play their role. According to your theory,
the world is in a new cycle given the current world order. In this new
cycle, how do you see the representative technology, or what are these
new technologies that drive the cycle, like digital technology, biological
technology, green technology, etc.? What’s your take on that? These are
two questions for you if I may. Thank you.
Ray Dalio: I think that we are in a phase where we are going to learn
three very important things and we will probably learn those things in
September or October.
The first is whether Russia will lose or win this conflict. Winning
the conflict means Russia controls Eastern Ukraine, as having economic
conditions in Russia being bad but not terrible, such as a decline of twelve
or fifteen percent in GDP. And Putin remaining in power, which would be
symbolized by his and Russia attending the G20 meeting. If that happens,
that would be viewed as probably worth the cost, but that will or will
not happen. If he loses any of that, I believe he will probably make the
conflicts intensified. The war existed so far has been a very easy war for the
west. But if the conflict escalates, that would make things very different,
perhaps change psychology and so on. So, that’s the first thing we will
learn.
The second is we will learn the power of American sanctions. Will
American sanctions be so powerful to have the indirect effect of winning
this war? Will it overwhelm Russia to the point of indirectly winning
the conflict, and so on? Will it be extended to other countries? These
sanctions generate great costs to the United States and the existing finan-
cial system because American capital markets have been weaponized. I
referred to that earlier that we no longer have free markets operating.
You can see that if there is a stepping up of those sanctions, the world
will be different. For example, twenty-two percent of American imports
of manufactured goods come from China. If those were shut off, what
should these companies do? So, when these American companies continue
to do business with Chinese companies, they would proceed as not being
a patriot. If they do business in China and such things, the risks of these
sanctions are going to be clear and how they will operate will become
clear over the next several months.
The third one that we’re going to see is how countries align with each
other? Then, we will see what each country is doing, how does the US
sanction Russia, how does Russia react, and how do India, Brazil, Mexico,
and Indonesia react? And as we’re moving forward, we will see how their
great power aligns and we’ll see that more over the next several months.
So, summarizing these three points, I think will going to be able to
make these conclusions. I think it is very risky. So, the answer to that
question is yes. Some compromise should be reached because the cost
14 R. DALIO
of not compromising is much greater. It’s well-known and it’s called a

golden bridge. You know the golden bridge shows an acceptable way
out but won’t satisfy everyone. Risks will remain, so what should we do?
Many believe that wars are crimes; but neither side is probably going to
go away. It is a different era now that makes all of that very risky, I think.
Jiandong Ju: Thank you, Ray. That’s a great discussion. It’s such a
critical point in human history now. In the next several months, we will
see this big change we are at the risk. We should all push to work together
to have a peaceful solution, and like your words, to have a compro-
mise. Otherwise, without a compromise, the cost is not affordable for
everybody on this planet. Thank you so much for pointing out this.
The second question Professor Liu raised, from your theory of these
long cycles and technology is the very key determinants. And now we
are in a new period of the big cycles, what kind of technology, you see,
will determine the cycle’s directions, as you mentioned before, like digital
technology, green technology, and what else? So, what’s in your opinion,
what the new technology would play a crucial role in these new cycles?
Ray Dalio: Well, through history, we have seen revolution, the types
of technology that raise living standards. Take an example of the Agri-
cultural Revolution, the human was plowing to get food in the past,
and then, technology is developed with the invention of agricultural
machinery; especially during the Industrial Revolution, the capital market
is developed. Thus, we found that people could purchase resources for
production, and we also found that those machines were used to raise
living standards. Since the Industrial Revolution, people’s life standard
has become higher and higher.
Our brain is how we can invent. Not only is this evolution taking place
through the brain, but that brain is essentially been renovated and supple-
mented by intelligence, which we called artificial intelligence, and can be
much greater intelligent and have much larger capacity to do things in the
most remarkable ways. We will think differently and the artificial intelli-
gence operations in revolution better in an advanced way because of those
technological advances.
In the process of continuous technological revolution, there will be
fabulous in terms of being able to produce better results, which happens
in all dimensions and also happens in life expectancy. There is work on
treating aging as a disease and controlling aging so that it’s not incon-
ceivable that life expectancy, health, and prosperity can raise much more.
We have more technologies tools for everybody, so we have that capacity
to have a future through a combination of technology and utilization

globally of the best resources. We can work well together to get the most
resources.
We now are more connected by technologies. At the same time, we
have more threats by ways of having technological threats of computer
hacking. It’s very conceivable that cyber wars can shut down those things
that we have become so dependent on. Or there can be harms that can
come from any kind of technology, like nuclear power, so we were not
yet sure of how that will be handled. But yes, I do believe that those
technologies that are developing have wonderful potential.
I think it all comes down to two things. First, can we be productive?
Can people earn more than they spend, save and invest? That is a sign
of technological progress. Second, can people be good with each other?
Thus, they work together competitively or working together in a healthy
competitive way or they’re going to be using these technologies to fight
because of the barbaric nature of humanity.
Jiandong Ju: Thanks Ray for your wise answer. If I understand
correctly, do you think AI would be the first-order important technology
that will determine the future?
Ray Dalio: Yes, technologies, including quantum computing, biotech-
nology, and many different ways, will promote future development.
Jiandong Ju: Thank you. Now let’s switch back to China. From
your theory, we have trade competition, tech competition, and geo-
competition. The following will be the capital competition, so do you
think the capital competition between the U.S. and China will be there?
Or can we avoid that? So, that’s my first question.
Ray Dalio: We’re seeing an intensive location of that conflict. For
example, will American investors be allowed to invest in China? How
will both sides treat that? Could there be capital controls? Those are real
possibilities that existed, including the issue of where stocks will be listed.
These are real issues. So, you’re seeing capital and the economic conflict
intensify and I think if the Ukrainian issue is not dealt with better that
there is a significant risk that capital conflict could be intensified more.
Jiandong Ju: That’s a big concern for us. In your opinion, for China,
if we need to be well prepared for this capital competition, should we
open a capital account in some way? Or what are your recommendations
for China?
Ray Dalio: Throughout history, those countries that had the largest
share of world trade developed their currencies with time and brought
16 R. DALIO
them around the world, and then decided the exchange rates. So, the
internationalization of RMB is a natural evolution, like all of the great
powers. They all had their city as the world financial centers there during
the periods of prosperity, like the Dutch and British. New York was and
is still the dominated financial center. Developing a financial center in
China is closely involved with the development of the financial markets in
China, even though the Chinese financial market is now very developed
and has been remarkable development. And it will be very important to
stay on that road well and not be stopped by the conflicts if it is avoidable,
because, in the long run, places that are most competitive will be the best.
The issue of free foreign exchange movement is always a difficult one
at such times. The internationalization of RMB can allow it to operate
more, but it is a difficult question due to the pros and cons of being fully
international. However, there’s a widening of the band of the exchange
ban. I think that’s a good move because there is also a challenge of
how to keep the interest rates and operate them. If you tie the coun-
try’s currency to another country’s currency, there will be the pressure to
have an interest rate that is the same as capital. So, this is called an inter-
national finance trilemma. It is impossible to have a fixed exchange rate
with capital controls simultaneously and an independent monetary policy
for dealing with economic conditions.
I think that it’s more likely to have to look at what the competi-
tion is doing. You might see more capital controls coming out of the
United States because one man’s debt is certain of the other man’s
assets. It’s difficult to balance inflation and recession if producing exces-
sive amount of debt. I think that Chinese policymakers understand that.
Other challenges are happening at the same time, including the COVID-
19 pandemic, and need to balance those well. The financial markets
continuing to develop in moving in that direction are better.
Jiandong Ju: Thank you, Ray. There is a good reason for China to
manage this cross-border capital flow because we are concerned about the
currency crisis. That’s the major reason in the past forty years, China is
very successful to prevent financial crises. But right now, we have another
concern which is as you mentioned that it’s the financial sanctions. So,
we have a dilemma to manage our cross-border capital flow well, and we
should continue to manage our capital account, but to prevent financial
sanctions. We need to speed up RMB internationalization, which we need
to make the RMB convertible. So, I just want to ask your opinion in such
a situation, for the concern about the financial sanctions, maybe just some
months away, should we speed up this convertible RMB capital account?
Ray Dalio: I think speeding up is not as good as slowing down right
now; in this situation, shocks should be minimized. Widening the band
of the exchange rate is a wise move, but the changing of capital controls
at this time probably is not the best. I think there are two purposes for
currency. It’s an intermediary of exchange and also a door holds of wealth.
Another problem is the printing of money, the real effect of money
is diminished which is leading to inflation. Interest rates are below infla-
tion rates and the normal GDP growth rates. If an interest rate is below
the inflation rate that means the holder of currency loses buying power,
and cannot buy other assets. We also see that happens, in the nineteen-
thirties, that all countries, all currency devalue against each other one
after another, or the price of other things decreased. I think we are in a
similar environment. It’s important for RMB to be a strong currency, not
so strong to hurt the economy or lower interest rates, but to strike that
balance. And the most important thing is that Chinese leadership recog-
nizes it very well. It is not to have debt rise faster relative to GDP and
not to have interest rates go so low that results in the risk of inflation so
that it avoids the decline in the value of the ultimate currency, RMB.
Jiandong Ju: Thank you Ray. It’s such a wonderful conversation and
we thank you so much.
David Daokui Li: Can I ask a quick question, Ray? Thank you very
much again for the wonderful speech full of wisdom. As a wonderful and
great friend of China who also gives big support to the U.S. and China
relationship, what is your single and most important piece of advice to
Chinese policymakers dealing with such a complicated world?
Ray Dalio: Not going to war. This is the number one priority to
emphasize and to find technical ways, saying that each side can get
comfort that the worst-case scenario cannot happen. Taking responsibility
on each side of avoiding the prisoner’s dilemma, so that the risk of war is
minimized.
Jiandong Ju: Thank you, Ray. That’s such an important suggestion.
As you mentioned that at this particular period, the exchange of opinions,
especially between Chinese people and U.S. people, becomes harder but
much more important than before. We thank you for your time, insights,
and suggestions. Let’s work together, we will see a peaceful world in the
future. Thank you so much.
18 R. DALIO
Ray Dalio: Competition is good, but war is bad. If we keep that in

mind, keep our communications and our mutual understanding going,
we can have a better world. I so appreciated this exchange and our long
relationship and I look forward to being there someday so that we can
do it in the future together.
CHAPTER 3
Outlook on the World Economy, Finance,

and Global Order
Justin Yifu Lin, Shijin Liu, Yongding Yu,

and David Daokui Li
Abstract In the personal statement stage, Justin Yifu Lin believes China
needs to maintain a dynamic economic development growth rate and
accelerate the process of opening up to the outside world. Shijin Liu
argues that we should accelerate China’s green technology innovation to
turn climate change pressure into innovative growth drivers. Yongding
Yu proposes that under the new changes in the international mone-
tary system, China should adjust the structure of its overseas assets
to cope with the new changes in the global monetary system. David
Daokui Li believes China should integrate epidemic prevention and
control with economic development goals, improve life expectancy and
J. Y. Lin (B)
Peking University, Beijing, China
e-mail: justinlin@nsd.pku.edu.cn
S. Liu
National Committee of the Chinese People’s Political Consultative Conference,
Beijing, China
e-mail: xiazhw@pbcsf.tsinghua.edu.cn

https://doi.org/10.1007/978-981-19-8489-1_3
20 J. Y. LIN ET AL.
people’s welfare, and maintain strategic determination and patience. The

subsequent roundtable, chaired by Jiandong Ju, focused on the theme
of “World Economy, Finance and Global Order Outlook.” Prof. Justin
Yifu Lin, Shijin Liu, Yongding Yu, and David Daokui Li held an in-
depth discussion on the “experiences and lessons from Japan to China’s
economic growth” and other issues.
Keywords Economic growth · Green technology innovation ·

International monetary system · Life expectancy · Japanese crisis
3.1 China Needs to Maintain

a Dynamic Economic Growth Rate
and Speed up the Process of Opening Up
Justin Yifu Lin
It’s a great pleasure to participate in this roundtable, especially to give

my presentation after the keynote speech by Mr. Dalio. My presentation
will be complementary to Mr. Dalio’s presentation. But I’ll discuss about
similar issues from the Chinese perspective and also from the economic
view. As President Xi Jinping pointed out, the world is undergoing a great
change unseen in a century. If we want to understand how this change
is going to evolve, we need to understand the cause of this change. The
great change can be reflected in the changing economic weight of the
leading powers in the world.
In 1900, the beginning of the twentieth century, the Eight Powers
Alliance invaded Beijing. Those eight powers were United Kingdom,
Y. Yu
Chinese Academy of Social Sciences, Beijing, China
e-mail: yongdingyu@126.com
D. D. Li
Tsinghua University, Beijing, China
e-mail: lidk@sem.tsinghua.edu.cn
3 OUTLOOK ON THE WORLD ECONOMY, FINANCE, … 21
United States, France, Germany, Italy, Russia, Japan, and Austro-

Hungarian Empire. At that time, their combined GDP, measured by
purchasing power parity, was 50.4%, half of the global GDP. In 2000,
there was a Group of Eight (G8), those eight countries were United
States, United Kingdom, Germany, France, Italy, Russia, and Japan,
similar to those first seven in the Eight Powers Alliance, and Canada as
the eighth. They formed the Group of Eight, because their combined
GDP, measured by purchasing power parity, was 47% of the global GDP.
So, we can see, in the twentieth century, the economic map had been
very stable, dominated by basically eight great powers. They contributed
consistently about 50% of global GDP. Because of the strength of their
economic powers, the world’s politics as well as whether the world was in
peace or war were determined by those eight countries.
The scene changed dramatically when we entered into the twenty-
first century, the new century. At the time when President Xi Jinping
advanced the proposition of the great change unseen in a century in 2018,
the G8’s contribution to the global GDP declined from 47% down to
34.7%. Because of the declined economic power, the G8 lost the ability
to manage the world shocks by its own. That was exemplified by the
change from the G8 to G20 as the global leading governance organi-
zation. The reason for a dramatic change in the global economic map
was not because of the leading powers’ decline in their growth rate or
their magnitude. Their growth rate has been quite stable around 3% per
year in the past century. The change was due to a rapid rise of emerging
market economies, especially China. In 2000, China’s weight in the global
GDP was 6.9%. By the time of 2018, China’s weight was 16.8%, a 9.9
percentage points increase contributing to 80% of the 12.3 percentage
points decline of the G8.
What was the reason for China and emerging market economy to
be able to do so well in this new century? I think it is because the
emerging market economies have something called the latecomer advan-
tages, allowing their technological change and industrial upgrading to
have much lower cost than that of the advanced countries. For the
advanced countries if they want to have technological change and indus-
trial upgrading, they would have to invent those technologies or those
new industries. But for the emerging market economies, they have the
latecomer advantage, meaning the possibility to borrow and import
mature technologies and industries from the advanced countries. They
also benefit from the globalization, which gives them the availability of
22 J. Y. LIN ET AL.
the world market for exports and imports of advanced technologies and
industries.
In this great change of global economic map, the biggest loser psycho-
logically is the United States. Throughout the twentieth century, the
U.S. had been the largest economy and most powerful country in the
world. But by the time of 2014, China overtook U.S. as the largest
economy, measured by purchasing power parity, in the world. Because of
this change, the U.S. felt loss. It tries to adopt some measures to main-
tain its dominance by containing China’s development. For the US, in
terms of economic size, measured by purchasing power parity, China is
larger, but in terms of per capita GDP, China is much lower. The U.S.
has a higher per capita GDP, meaning that the U.S. has more advanced
technologies and certainly also larger financial and military power. We can
see many maneuvers in the U.S., trying to form some kinds of alliance to
decouple China economically, which is a way to contain China’s devel-
opment, and pivoting to Asian Pacific and so on so as to encircle China
militarily.
This situation may cause a lot of dangers, as Mr. Dario pointed out.
Historically if a great power declined while a new power emerged, such
a change might result in tensions and troubles in the world. Under such
a circumstance, what would be the best strategy for China? First, I fully
agree with Mr. Dalio’s suggestion, China should try the best to avoid war
and China needs to draw lessons and wisdoms from the past to avoid war.
In addition to that, I would like to give two advices:
● The first one is China should try the best to maintain dynamic
economic growth.
● The second one is China should maintain open and be a champion
of globalization.
If we compare now with what have happened historically, there is

something similar but there is also something different to the big cycles
that Mr. Dalio described. In the past, when there was this kind of change
in powers, no matter the hegemony or the rising power, the levels of their
economic development, in terms of per capita GDP, were very similar.
Their technological level was very similar. But this time, China is still a
catching-up country. China’s per capita GDP was around a quarter of that
of the U.S., and China’s technology level is much lower than that of U.S.
Because of the low technological achievement in China, it gives the

U.S. the possibility to use its technology advantages to embargo and to
contain the development of China by decoupling from China. But since
China is still on the catching-up stage, China has the latecomer advan-
tages in technological innovation and industrial upgrading. In terms of
the level of per capita GDP relative to that of the U.S., China today was
very similar to that of Germany in the 1940s, Japan in the 1950s and
Korea in the 1980s. For these three good-performing and catching-up
countries, they were able to maintain around 8–9% growth rate for more
than a decade from a level of development similar to China today. That
means that the latecomer advantages give China a growth potential of 8%
per year. And in addition to the latecomer advantages, China has already
been the largest economy in terms of purchasing power. So, China has a
large domestic market. China also has high savings, the political stability
and the political will to maintain the growth. So, China should use its
advantages to maintain dynamic economic growth. That’s my first advice.
My 2nd advice for China is to remain open and to be a champion of
globalization. China currently is the largest economy in the world. With
8% growth potential, large domestic economy and high domestic savings,
it is manageable for China to grow at 5–6% per year. Since 2008, China
has contributed about a quarter to a 3rd of the global growth annually.
If China can maintain the growth rate as I advised, China will continue
to contribute at least a quarter to the global growth every year.
Moreover, China is not only the largest economy in the world, it is also
the largest trading country in the world. Currently, China is the largest
trading partner for more than 120 countries, and 2nd largest trading
partner for another 70 and plus countries. So overall, more than 90% of
the countries in the world, China is either their number one or number
two trading partner. We know that trade is win–win to both sides and the
smaller economy will win more than the larger economy in the trade. So
what does that mean? Other countries, when they trade with China, they
gain more than China from this trade.
If China can maintain dynamic economic growth and maintain open,
the growth in China will be an opportunity for other countries, except for
the hegemony that is the U.S.. Other countries’ main concern is their own
domestic benefits, that is, their growth and employment. To maintain
good trading relation with China would be essential for them to maintain
growth and employment, and also for their leading companies to main-
tain their position as global leading companies. Therefore, if China can
24 J. Y. LIN ET AL.
maintain dynamic growth and open, other countries are likely to resist
U.S.’s pressure to decouple from China. China can continue to enjoy the
latecomer advantage by trading with other advanced countries.
If China maintains dynamic growth and open, someday China’s per
capita GDP, measured by purchasing power parity, will be around half of
that of the U.S.. By that time, the world may come into a new, stable situ-
ation. This is because if China’s per capita GDP is about half of the U.S.,
and China’s population size is around four times of the U.S., China’s
economic size will be double of that of the U.S.. By that time, U.S. will
find to maintain good relation and trade with China would be important
for its leading companies to maintain their global leadership position, and
also for its own growth and employment. So, by that time, the world may
have a new global order, a peaceful, stable global order. Let me stop here.
Thank you very much.
3.2 Accelerate the Promotion of Green

Technology Innovation in China
and Turn Climate Change Pressure
into a Driving Force for Innovation Growth
Shijin Liu
How can the pressure to address climate change be transformed into a

global driver of innovation and growth? At the beginning, Dean Zhang
Xiaohui made the point that there are too many currencies and too low
interest rates around the world, but growth drivers are still insufficient,
and a significant number of countries are still depressed.
There was a long-term framework in Ray Dalio’s presentation just now,
looking at short-term issues with a long-term perspective, and that was
the most important implication from the presentation.
Today, we discuss economic policy issues. Many times, we look at the
short-term more, look at the long-term less, especially not put short-term
issues in the long-term context. Sometimes, we talk a lot about economic
policy, monetary and fiscal policy. I sometimes feel that many monetary
and fiscal policies are not necessarily able to undertake the task of stim-
ulus, short-term fiscal and monetary policies are very important, and what
should be done needs to be studied, but also to figure out what cannot
be done. Monetary and fiscal policy is to maintain the short-term balance
and stability of the economy. Long-term growth momentum has to rely

on other things, not short-term fiscal and monetary policy.
I call for more attention to be paid to long-term issues and the struc-
tural potential that drives long-term economic growth. Today, I want to
speak from this perspective about how addressing climate change can be
a driver for innovation and growth because addressing climate change
is one of the few areas where consensus can be reached at the global
level at present. Major countries worldwide are now proposing carbon–
neutral targets. China proposed a dual-carbon target at the UN General
Assembly the year before last year, which has had a significant positive
impact domestically and internationally.
How to respond to climate change? In terms of China’s experience,
there are three ways to respond.
The first type of reaction is defensive. It is mainly the traditional energy
or high-carbon industries that are feeling the pressure, and it is also
thinking about transforming and restructuring or even withdrawing in
the future. Still, they see that oil and steel prices are rising in the short
term. When the security of supply goes wrong, they feel that they still
have a lot of weight, whether to retreat or not? Retreating is the choice
of last resort, so I call it a defensive response.
The second is the adaptive response. The typical one is energy conser-
vation, which is always right because after energy conservation, energy
use is reduced, and carbon emissions are reduced. Still, the technology
remains the same, including the carbon market to solve the so-called
carbon productivity problem, but the production process still uses carbon.
The third is the aggressive response. It is crucial to promote innova-
tion, especially green innovation activities, and to replace traditional high-
carbon energy sources, high-carbon industries, and production methods
with new low-carbon and zero-carbon energy technologies.
The most important of the three responses is to adopt an aggressive
response approach, and this is where the focus or primary attention should
be placed, not only in China but globally.
First, innovative carbon reduction can achieve the replacement of tradi-
tional high-carbon technologies or industries over a long period. The
so-called green transition is fundamentally about changing technologies
and replacing the original high-carbon technologies with low-, zero- or
negative-carbon technologies.
26 J. Y. LIN ET AL.
Second, it is impossible to set in advance how much space there is

for innovative carbon reduction. The inherent impulsiveness and uncer-
tainty of innovation dictate that it is impossible to limit the boundaries
of its expansion. It is not difficult to envisage the extent to which
humanity would rewrite the landscape of renewable energy understanding
if controlled fusion were to succeed and be commercialized.
Third, such innovations can significantly reduce the cost to human
society of addressing climate change. Green products tend to be initially
expensive, and there is a so-called green premium. As innovation compe-
tition intensifies and prices fall, the green premium for many products
has become negative. A typical case in point is photovoltaic power gener-
ation. Ten years ago, it would have been unthinkable to say that it would
compete with coal-fired generation. Still, over the past decade, the cost of
PV has fallen by 80–90% and is already lower than the cost of coal-fired
generation, with the potential to fall further. A key challenge in addressing
climate change comes from cost shocks, and cost reductions resulting
from innovation can significantly enhance human confidence and capacity
to address climate change.
Fourth, innovation initially stems from carbon-reducing motives and,
once formed into products, tends to generate additional utility or bene-
fits, creating more consumer surplus. In the case of new energy smart
cars, the first quarter of 2022 is already approaching 20% of all car sales,
more than one would expect. When consumers buy new energy vehicles,
it cannot be said that they are not concerned about carbon emissions
reduction, but what most consumers directly feel is the low cost of use,
the good application of electronic devices, the high level of comfort, and
the feeling of control is very different from before. The automatic driving
capability is gradually improving. In addition to electrification, there is
more intelligence, sharing, and so on. Simply put, most of the benefits
that appeal to consumers are likely to be beyond carbon reduction, which
means providing benefits to society beyond expectations.
Finally, it has triggered and accelerated the digitization of high-carbon
sectors such as energy. The digital economy is another economic form
after the agricultural and industrial economies, and the entire economy
and society are transitioning to a digital state. Even without the double
carbon pressure, high-carbon sectors such as energy, industry, transport,
and buildings will enter into digital transformation, but the process may
be relatively slow. Innovative carbon reduction triggers and accelerates
digital transformation in these areas and has the potential to drive them
to become leaders in digital transformation.
So I think we are now dealing with climate change as a global matter,
and there are many things to do, but the focus still has to shift to
promoting green technology innovation. Just now, I asked Mr. Dalio’s
question: he thinks that the world is entering a new cycle, so what is
the new cycle technology? I thought that green technology is a very
important aspect, and this is not active; it is passive, and the results will
exceed expectations. Suppose we adopt the right goals and approaches. In
that case, it will not only help to achieve the goal of combating climate
change, but it can also introduce a major technological change on a
global scale that will provide momentum for global economic growth.
Developed economies have more mature economies, but greening, espe-
cially led by the digital economy, represents a new growth opportunity
for them. Developing countries, on the other hand, have the potential to
break away from the previous pattern of growth while polluting and move
toward a green development path with little or no emissions and growth
at the same time.
Let me say one more thing: the impact of the Russia-Ukraine conflict
was discussed earlier, and some professionals have recently been discussing
what impact the Russia-Ukraine conflict has on the global response to
climate change, which is a more complex issue. What is the view on this
matter of a significant increase in energy prices? It does put pressure on
real economic growth, but it objectively reduces the green premium for
clean energy and is a stimulus for green innovation. I remember when
OPEC used to control global oil prices, and they sometimes raised them,
but quite cautiously, because they understood the rationale that if the
price of oil was raised too high, then there would be an opportunity for
alternative energy development. Such a principle is still at work at the
moment.
The fight against climate change requires international cooperation,
but the globalization process is stormy. Can green innovation provide
some opportunities? Just now, Mr. Ray Dalio talked about Sino-US rela-
tions. New energy is an essential area of Sino-US cooperation. We are
more concerned about Tesla; its factory in Shanghai is developing well
and recently engaged in the second phase. Musk spoke highly of Chinese
workers, the quality of Chinese workers is better, which is a significant
advantage of China.
28 J. Y. LIN ET AL.
There are different opinions in China about the Tesla factory in

Shanghai. Some people say that after coming in, it takes up our market
and suppresses the competitiveness of domestic enterprises. But looking
back, the industry chain formed by Tesla can be shared by domestic
new energy vehicles, and talents can flow with each other. If a strong
competitor comes in, as long as the domestic market is liberalized and
competition is allowed, Chinese companies are not bad, and in some
areas, there are advantages. There are already many cases in this area.
We should have confidence.
The research, development, and application of green technologies
should also be encouraged to be open. International trade, investment,
and technology transfer will become more active after opening up. At the
same time, developed countries can provide more financial and technical
support to developing countries in the field of green innovation, which
will also significantly impact global economic growth and sustainable
development.
3.3 Adjusting the Structure of China’s

Overseas Assets to Cope with New Changes
in the International Monetary System
Yongding Yu
This morning Mr. Ray Dalio spoke very well and I learned a lot from
his speech. Now, I would like to talk about two issues: the reform of
the international monetary system and the returns and security of China’s
foreign assets.
I argued in my recent project syndicate column that, after the gold
standard was abandoned owing to the so-called Triffin dilemma, U.S.
dollar’s position as the predominant international currency strengthened
rather than weakened in the post-Bretton Woods system.
The fundamental reason was that trust in the dollar’s integrity had
not been fundamentally shaken. Despite the fact that it was no longer
convertible to gold, the world needed the dollar as a stable standard for
denominating values of goods and services, an easily available means of
exchange, and a safe store of value.
The basic contradiction in using the dollar—a national fiat money—
as a reserve currency is that the U.S. is running current account deficits
to provide dollars to the rest of the world. This implies that the more
the dollar is provided, the larger the U.S. foreign debt will be. Under
the Bretton Woods System, when the ratio between the dollars held by
foreigners-to-gold reserves held by the United States increased to 7:1 in
1971,1 foreign holders’ confidence in America’s ability to maintain the
exchange rate of 35 dollars per ounce of Gold collapsed, and so did the
Bretton Woods System. Under the post-Bretton Woods System, when the
U.S. net debt–to–GDP ratio surpasses a certain threshold, it is also very
likely that the foreign holders of the dollar-denominated financial assets
would lose the confidence in America’s ability and desire to repay its debt
with the purchasing power of the dollar unimpaired, and the dollar will
collapse. Essentially, this is still a Triffin problem.
For decades, for a variety of different reasons, the rest of the world,
especially China, has unsaturated demand for the dollar and dollar-
denominated financial assets. In fact, a significant percentage of the U.S.
Treasury bonds were purchased by foreign countries. The top five foreign
purchasers were Japan, China, Luxembourg, the United Kingdom, and
Ireland. Their total holdings of U.S. Treasury bonds amounted to
$3.6 trillion. Collectively, they are the second largest holders of U.S.
government bonds, just behind the Federal Reserves. The accumula-
tion of foreign exchange reserves and dollar-denominated financial assets
by Asian central banks and oil exporting countries has kept the dollar
undeservedly strong.
By the end of 2021, America’s net foreign debt has reached to a stag-
gering amount of $18 trillion and its net foreign debt-to-GDP ratio has
reached to 78%. Asian central banks and oil exporting countries may
become hesitating to continue to pile up U.S. treasuries, due to the fear
of U.S. default, perhaps not de jure, but de facto by inflation.
The Fed printed trillions of dollars out of thin air in response to
COVID-19. At the same time, U.S. government adopted extremely
expansionary fiscal policy by doling out tons of dollars. America’s budget
deficit-to-GDP ratio shot up to 15% in 2020 and 12% in 2021, respec-
tively. As a result of the combination of supply shock brought about by
COVID-19 and excess demand created by expansionary macroeconomic
policy aimed at combating COVID-19, America’s inflation worsened
dramatically. In May 2022, America’s CPI increased 8.6%, the largest
1 https://www.nytimes.com/1971/10/13/archives/the-dollar-overhang-would-A-mar
shall-plan-in-reverse-help-us-in-its.html.
30 J. Y. LIN ET AL.
12-month increase since December 1981. While inflation is eroding the

purchasing power of the dollar, America’s current account balance also
worsened. In the first quarter of 2022, America’s current account deficit
was 4.8% though still lower than the historical high of 6% in 2006; it is
already high enough to beg the question of whether America’s external
sustainability can be maintained?
On the one hand, the United States needs more external finance to
sustain its external balance. On the other hand, foreign investors prob-
ably will reduce their demand for dollar-denominated assets, especially the
low-yield U.S. government bonds. Now the federal reserves is raising the
federal funds rate to contain inflation. Although the interest rate hiking
attracts capital inflows and strengthens the dollar temporarily, in the
longer run, it will increase the costs for financing current account deficit
and lower the GDP growth rate, which in turn will increase America’s
net foreign debt-to-GDP ratio. This situation certainly makes long-term
investors more hesitant to purchase dollar assets.
In short, in the current international monetary system, the Triffin
dilemma still exists. The fundamental contradiction of the post-Bretton
Woods System is that the dollar-a national fiat money serves as a dominant
international currency-a public good for the global economy. To provide
“international liquidity” by running current account deficit probably will
lead to the increase in America’s net foreign debt-to-GDP ratio, unless
the United States can maintain a very high growth rate of GDP, which is
not very likely. This situation is similar to that under the Bretton Woods
System: the supply of gold could not keep pace with the increase in the
need for “international liquidity” to facilitate the ever-increasing inter-
national trade. Furthermore, because of lack of checks and balance, the
dollar’s position as the predominant international reserve currency can be
abused by the self-serving issuance country.
After 2008 global financial crisis, two approaches to the reform of the
international monetary system were proposed. The first was to use the
SDR as the international reserve currency in place of the U.S. dollar. This
perhaps is an ideal solution. However, this approach was rejected by the
United States. Furthermore, without close cooperation between govern-
ments, or even a “world government,” it is impossible to manage such
replacement.
The second is to establish a multi-polar international monetary system
to allow the U.S. dollar, the Euro, and the RMB together to serve
as international reserve currencies; because of competition among the
reserve currencies, the possibility of abuse by reserve currency issuance

countries would be constrained. But because of the coexistence of three
major currencies, some feared that international monetary system may
become more instable. Another problem is that the Euro was not as
strong as it appeared because of weakness such as lack of a unified fiscal
policy. The RMB had to meet many preconditions such as free flows of
cross-border capital and a floating exchange rate; before, it can serve
as one of the three major international reserve currencies. The RMB is
moving toward that direction, but it will take time.
Currently, because of the weaponization of the dollar, many people
started to talk about the fragmentation of international monetary system.
There are also signs that some countries are moving toward the direction
of forming currency blocks in line with geopolitical groupings.
It can be expected that despite all the problems the U.S. dollar encoun-
tered recently, due to network effect, for a time being, the dollar will
continue to play the role of the international reserve currency.
After the breakout of the global financial crisis, the prime minister at
the time, Wen Jiabao, expressed his concern about the safety of China’s
foreign exchange reserves in March 2009: “We have lent a huge amount
of money to the U.S., so of course we are concerned about the safety of
our assets. Frankly speaking, I do have some worries.”
However, China carried on accumulating foreign exchange reserves
anyway, which peaked at $3.8 trillion in 2014, before falling by $800
billion in the following two years, thanks to PBOC’s heavy intervention
in the foreign exchange market aimed at stabilizing the renminbi. Today,
China’s foreign exchange reserves stand at around $3.2 trillion, still by
far the largest in the world. There are three major reasons that China
should reduce its holdings of foreign exchange reserves, the bulk of which
consists of dollar-denominated assets.
First, despite being a net creditor of $2 trillion, China has run negative
net investment income consistently for decades. One of the main causes
of this situation is that the share of low-yield U.S. treasuries in China’s
foreign assets is disproportionately high. Why China has bought so much
low-yield US Treasury bills? This has been a puzzling question for many
Western economists.
Because China has been running twin surpluses consistently, in the
aggregate sense, a significant portion of China’s foreign exchange reserves
is borrowed through FDI inflows. This means that China is borrowing
money with high cost and then lending it out with very low returns.
32 J. Y. LIN ET AL.
Roubini and Setser observed in 2005 that: “The PBOC is doing far more
than just taking China’s current account surplus and lending that back to
the U.S.. Around 75% of China’s reserve accumulation over the past two
years has been financed by capital inflows, not China’s current account
surplus. The PBOC effectively selling renminbi to a range of foreign
investors at 8.28 for dollars (and euros), and then uses those dollars to
buy low-yielding dollar and euro assets. Foreign investors (“speculators”)
get the upside of the renminbi dollar or renminbi-euro, China’s central
bank gets the downside”.2
Why this has happened is a rather complicated issue; due to time
constraint, I cannot elaborate. What I can say is that this was quite natural
at the initial stage of reforms and opening up. But later China has gone
too far along this direction.
To cut a long story short, China’s holdings of $3.3 trillion of foreign
exchange reserves far exceed whatever adequacy requirements that are
commonly accepted in the world. China had better to adjust its interna-
tional investment position to turn the negative investment income into
positive one sooner rather than later. Otherwise, the Chinese economy
with an aging population will be serious trouble in the future.
Second, China should be aware of that the United States may never
be able to repay its huge foreign debt because of persistent increase in
America’s net foreign debt-to-GDP ratio. Because the dollar is a reserve
currency, in theory, the United States can roll over its debt indefinitely
by operating the printing press. But paper assets are not the same as real
assets, which consist of oil and gas, food, consumer and capital goods,
technology, and so on. The question is whether foreign investors’ finan-
cial claims on the United States can be backed up by America’s real
resources. There should be a certain threshold, over which the value of
paper assets-to-the quantity of real resources ratio, measured somehow,
should not surpass. This is similar to the threshold under the Bretton
Woods System, over which the dollar liquidity-to-gold reserves ratio could
not surpass. In fact, heavily in debt, America may have already loss its
ability to pay its debt. At Henry Hazlitt Memorial Lecture in March 23,
2009, in response to the Chinese government’s worry about the possi-
bility of America’s failure to repay its debt owed to China, Peter Schiff,
2 Nouriel Roubini and Brad Setser, Will the Bretton Woods 2 Regime Unravel Soon?
The Risk of a Hard Landing in 2005–2006, February 2005, https://econpapers.repec.
org/article/fipfedfpr/y_3a2005_3ai_3afeb_3ax_3a13.htm.
who made his name by predicting the coming subprime financial crisis
correctly, said: “Of course, we are not going to pay Chinese back their
money. It is impossible. We don’t have (the money), we can’t, we can’t
possibly.” This is because, according to him, U.S. politics would not allow
the U.S. government to increase taxes and cut social security expenditures
to repay its debt. He pointed out, whenever American bonds mature or
America needs to pay interests, it borrows more until nobody wants to
lend it any more money. Then he said: “We have to default…There are
only two ways to default: we just legitimately don’t pay or we print the
money.” “There is no way we are going to pay the debt”.3
To be sure, if many countries, especially China, continue to purchase
large quantities of dollar-denominated foreign exchange reserves, the U.S.
dollar can remain strong for quite some time. But at some point, when
the threshold is surpassed, the greenback’s value will fall and inflation in
the United States will rise. As a result, the second largest foreign holder
of U.S. treasuries—China—will suffer huge losses, if it fails to shift away
from the dollar and dollar-denominated financial assets in time. Certainly,
to do so is not easy. In an NYT editorial entitled “China’s Dollar Trap”
in 2009, Krugman noted that “China now owns so many dollars that it
can’t sell them off without driving the dollar down and triggering the very
capital loss its leaders fear.”4 Hence, how to reduce the holdings of U.S.
government bonds without causing too much disturbance in the market
is a great challenge to China’s monetary authorities.
Third, the geopolitical conflict between the United States and China
poses a new threat to the security of China’s overseas assets, especially
its foreign exchange reserves. The fact that the United States has frozen
Russia’s foreign exchange reserves shows that it is entirely possible that
the United States could seize China’s overseas assets, especially its foreign
exchange reserves, if it feels the need to do so.
In fact, as early as in December 2013, in an article in the Financial
Times, Martin Wolf has warned that “If open conflict arrived, the U.S.
could cut off the world’s trade with China. It could also sequester a good
part of China’s liquid foreign assets. The economic consequences would
be devastating for the world, but they would, almost certainly, be worse
3 https://www.youtube.com/watch?v=NkEtArDFNYA.
4 Paul Krugman, China’s Dollar Trap, NYT, April 2, 2009.
34 J. Y. LIN ET AL.
for China than for the US and its allies.”5 Faced with such challenges,
what China should do?
First, China should try to turn its negative investment income into
positive one by readjusting its structure of international investment posi-
tion (IIP). On the asset side, China should reduce its holding of U.S.
government bonds and increasing the holdings of other forms of financial
assets. For example, China can increase its holdings of foreign port-
folio equity and corporate bonds, rather than foreign government bonds.
China may continue to facilitate out-bond FDI in strategic areas such as
oil fields in countries, where China has the ability to protect its invest-
ment interests. To increase portfolio equity investment, there could be
a good investment strategy. In view of the fact that China has large
excess production capacity, especially in manufacturing and infrastructural
construction. Hence, Chinese firms’ outbound direct investment should
be supported. But it is harmful to mix the profit-seeking economic activi-
ties with geopolitics. Business is business. It will do more harm than good
to base investment decisions on noneconomic considerations except in
very rare occasions. China needs particularly vigilant to avoid falling into
“debt trap” in the hosting countries of China’s outbound investment.
On the liability side, while continue to welcome FDI, China may need
to be pickier in introducing FDI; local governments’ competition for
FDI should be discouraged; greater efforts should be made to mobilize
domestic saving to finance domestic investment. Certainly, to adjust the
structure of foreign assets and liabilities so as to improve the efficiency
of cross-border and intertemporal allocation of resources is a gradual
process. China cannot complete the adjustment in one-go.
Second, compared with the adjustment of the structure of foreign
assets and liabilities, in the long run, an equally, if not more, urgent chal-
lenge China has to tackle is to run a more balanced trade account. For the
existing foreign assets that China is holding, the room for adjustment may
be limited. To reduce the share of foreign exchange reserves in China’s
foreign assets, the focus should be on flows rather than on stocks. In other
words, China should import more so as to covert the “IOU” issued by
the United States into something more real.
Third, to run a balanced current account means that China has
to narrow or eliminate the saving-investment gap. China runs current
5 Martin Wolf, China Must Not Copy Kaiser’s Errors, FT, December 4, 2013.
account surplus, because China’s saving is larger than investment. The

existence of “saving-glut” in China cannot be attributed to a single cause.
But China’s export-led strategy, which has been implemented for decades,
certainly is an important contributing factor. The slogan in the 1980s
and 1990s in China was to build a foreign exchange-generating economy,
and many policies were designed to stimulate exports. This strategy was
a success. But time has changed and China should have shifted away
from the strategy long time ago. Perhaps, it is necessary for China to run
current account deficit for a certain period in the future, so that China
can deplete somewhat the stock of its foreign exchange reserves.
The introduction of the strategy of “dual circulation” is a welcome
development. The thrust of this strategy is to place domestic demand
instead of exports in the driving seat of economic growth. Guided by this
strategy, China’s trade policy needs thorough reexamination and many
export promotion policies should be abolished. For instance, tax rebate
policy should not be used to encourage export. Hidden export subsidies
should be abolished. China’s exchange rate should be determined basi-
cally by demand and supply in the foreign exchange market. It is worth
noting that the inflexible exchange rate adopted by China has played an
important role in the accumulation of foreign exchange reserves in the
past. A flexible exchange rate per se can help China to eliminate the
saving-glut and balance its current account.
Fourth, China should make the RMB exchange rate as flexible as
possible. The fixed or inflexible exchange rate is a necessary condition
for the accumulation of foreign exchange reserves. For quite long time,
the United States pressed China to allow the RMB to appreciate so as to
reduce China’s trade surplus. Many Chinese were very angry with Amer-
ica’s demand. But actually, what really worries American elites was that
China may allow the RMB to appreciate and stop purchasing US govern-
ment bonds. Why? In an article written by the former Chief of Staff at the
White House Council of Economic Advisers, Prof. P. Swagel admitted:
If China’s currency is undervalued by 27%, as some have claimed, U.S.
consumers have been getting a 27% discount on everything made in
China, while the Chinese have been paying 27% too much for Treasury
bonds. ….. A cynic might hope that the push for a Chinese exchange rate
change is …… a devious attempt to prolong the enormous benefits the
U.S. derives at China’s expense from the fixed dollar-yuan exchange rate.
Or perhaps this is accident, not design. Either way, the administration
36 J. Y. LIN ET AL.
has come up with a brilliant strategy to keep the good times rolling.6 It
should be pointed out that China has made tremendous head way in the
reform of the exchange rate regime since late 2010s.
Fifth, more expansionary fiscal and monetary policy should be intro-
duced to stimulate domestic consumption and investment. China’s
imports, as in other countries, are a function of GDP growth. When the
economy is slowing down, the growth of imports will fall, while exports
are more susceptible to growth of the world economy. Hence, expan-
sionary fiscal and monetary policy not only is necessary for China to
achieve a decent growth rate, but also can contribute to a more balanced
current account and less accumulation of foreign exchange reserves.
Sixth, China is a country of 1.4 billion people. At the same time, China
is a resource poor country. Hence, to ensure an ironclad safety of food and
energy should always be the top priority of the Chinese government. As
a separated issue from trade account balance, China should have a long-
term plan for importing commodities and strategic materials in a gradual
and orderly fashion to build up energy and food reserves. To facilitate
the imports, more deposes and storages should be built, which can also
contribute to the increase in China’s domestic demand and hence China’s
economic growth.
Seventh, in 2020, the United States and China reached an agree-
ment in which China promised to purchase $200 billion of additional
U.S. exports before December 31, 2021. Because of COVID-19, a force
majeure event, China could not fulfill the commitment. China and United
States should renegotiate the agreement with good faith. China should try
its best to import more American products as long as they are what China
needs.
Eighth, despite American government’s hostile actions against Chinese
corporates, China should protect the legal interests of American corpo-
rates unwaveringly. When retaliation is necessary, the retaliation should
be measured out cautiously. It is worth noting that American investors,
who have come to China to invest perhaps are precisely those who are
6 Phillip Swagel, Yuan Answers? June 10, 2005, https://www.aei.org/research-pro

ducts/report/yuan-answers/swagel. Swagel was Assistant Secretary for Economic Policy
at the US Department of Treasury in the Bush administration. Previously, he was chief
of staff and senior economist at the White House Council of Economic Advisers. Since
2019, he is director of the Congressional Budget Office (CBO).
relatively friendly to China, and China must try its best to avoid causing
collateral damage.
Last but not least, the freezing of Russian central bank’s foreign
exchange reserves by America and its allies has done great harm on
the creditability of the dollar. Even countries such as India are some-
what worried. Many countries have started to consider to use the RMB
as invoicing currency, settlement currency and reserve currency. This is
something that has never happened since the PBOC launched the RMB
internationalization in 2009. Indeed, a sort of opportunity has opened
up for the RMB to play a bigger role in global trade and finance. China
should facilitate the demand for the RMB by its foreign trade and invest-
ment partners. To facilitate RMB internationalization, China also needs
to make a great strike to build the infrastructures such as message system,
settlement system and clearing system by fully utilizing China’s digital
capacity.
3.4 Coordinate Epidemic Prevention

and Control and Economic Development Goals,
Improve Life Expectancy and People’s Welfare
and Maintain Strategic Focus and Patience
David Daokui Li
Today’s discussions have been very important and efficient. China’s

economy is currently encountering an important challenge, which is the
repeated coming back of the pandemic within a complex international
environment. Under these circumstances, our economics scholars are in a
very complicated mood. At this time, this meeting has opened a window
and brought us a ray of sunshine, and we have seen a lot of hope.
I would like to first make a simple point. That is, the current inter-
national situation is extremely complicated, and there are also many
domestic risks and challenges. Under such circumstances, I would like
to emphasize a point that most agreed when I was a student decades ago:
“The most important thing is to handle your own affairs well.” Handling
China’s own affairs well is the best way to deal with complex international
situations and severe challenges.
Therefore, I will speak today on domestic issues. How can China
handle its own affairs well? I think that currently, this means controlling
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"My order stands," said Weston, "I will be received."
"Yes sir. I'm sorry, sir." The aide turned and entered the office. He
emerged, shortly afterwards and motioned for Al to enter. Weston
cast a down-his-nose glance at the aide, then shut the door behind
him. Against the wall beside the door was a scrawled legend.
"Jordan Green has been here, too!"
The style was unmistakable—as unmistakable as the wrath that

greeted him.
"Explain, Senior Captain Weston!"
"I am on a roving commission, rank four-mark, I—"
"I'm aware of your rank, your mission and your commission. Come to
the point. I want to know why you think you are more important than
anybody else!"
"I—have not that opinion, sir."
"You must have it, or you'd not have behaved as you did! Come on,
speak."
"Well, sir, I've uncovered a rather startling bit—"
"So what? So you demand my time to discuss a space gag with me?
So they're all the same handwriting. Any idiot at Intelligence could
have told you that. They covered that phase when Jordan Green first
appeared. They were suspicious. Here!"
Admiral Callahan strode to a file cabinet and took out a thick file. He
hurled it at Al Weston.
"Read it and learn some sense, young man. Now get out of here and
don't bother coming back."
Weston took the file and left. His ears were burning and his mind was
a tangle of cross-purposes and emotions. That was a rotten way to
treat a man who'd been shot down on the first directive expedition.
He'd like to clip the so-and-so admiral's wings a bit. He'd—take it—he
guessed, sourly, hearing a slight snicker behind him. He turned
angrily but there was no one near.
That snicker? Was it real, or merely a breath of wind against the
Venetian blind?
He entered the first bar he found. "Pulga and water," he said.
The bartender winced. "Does the Terran Captain forget that this is
Mars?"
Weston had, but this was no time to admit a mistake.
"Not at all," he said.
"May I ask the Terran Captain to change his order?"
"I want it as I said it," snapped Weston.
"Does the Terran Captain understand that water is not plentiful? We
on Mars have not the—the—plumbing as on Terra, where you cannot
live without your water. We use but little personally and that mostly for
washing. In washing, we absorb sufficient for our own metabolism."
"I'm aware of that."
"Then the Terran Captain may also be aware of the fact that our water
is not—well—suited for internal consumption?"
"You have no bottled water?" demanded Weston angrily.
"That will be found only on the Terran Post. Please, be not angry. All
newcomers forget."
"Forget it," snapped Weston and walked out.
Even the lowly bartenders of a conquered race made a fool of him.
He entered another bar down the street and asked for pulga and vin,
a completely native Martian potable. It was served without argument
and went down right.
He had another and was halfway through it when he turned to see
friends entering.
"Al!" they called. "How's it, man?"
With a weak smile he set down his drink and held out a welcoming
hand.
"Hi, fellows. Haven't seen you in a year, Jack. Nor you, Bill. What's
new?"
"Nothing much. Golly, we thought you were a real goner when they hit
you that fatal day."
"I don't remember," said Weston.
"I'll bet you don't," said Bill with a smile. "You dropped back out of
formation in a flaming instant and were gone. The rest of us were all
right and won through. We hit Mars about o-three-hundred the next
afternoon and, brother, did we hit 'em.
"We hurled the directive beam right down in the middle of
Kanthanappois and laid the city flat! Then we headed North to
Montharrin and singed 'em gently around the edges. You have no
idea, Al boy, what a fierce thing you can toss out of a one-seater
scooter when you've got directive power in it.
"They've never got the Fresno Beams down to a size practical for
anything smaller than an eight-man job, you know. Well, directives
make it possible to handle a four-turret from a one-man job. And a
super-craft can carry enough stuff to move Mars."
"I missed it."
"We know, and we're sorry about that. Well, we can't all win."
"Don't be patronizing," snapped Al Weston.
"Sorry. We knew you'd have given most anything to have joined in the
ruckus. Well—say, Al, I hear you've got a snap job now?"
"Well," said Al, disagreeing that it was a snap, and at the same time
trying to justify its importance, "I'm trying to dig out the truth of this
Jordan Green thing."
"You mean like over there?" grinned Jack, pointing to the legend on
the wall.
"Uh—yeah, excuse me a moment," said Weston, going over and
looking at it carefully.
"Getting to be an authority, hey, Al?" laughed Bill. "Gosh, that's a
laugh of a job. Bet you have your fun."
"I think it is slightly stupid," said Weston harshly.
"Could be. It's no more stupid than a lot of jobs in this man's space
navy, though. They sent a space admiral out once to measure the
major diameter of all spacecraft to the maximum thousandth of an
inch and didn't tell him for weeks that it had a deep purpose.
"He fumed and fretted until he discovered that it took a space admiral
to hold enough rank to be permitted to measure that stuff under the
security regulations. Later they made all external space gear
universal so that replacement quantities could be reduced. It saved
about seven billion bucks—enough to pay the admiral's salary for a
couple of millennia."
Jack laughed. "It's usually some lucky bird that gets these cockeyed
commissions and has a swell time loafing all over the solar system on
the government's dough."
"I don't consider myself lucky."
"We do," chimed one of the men. "We're stuck here along with seven
million other high-brass policemen who'd rather play marbles," said
Bill. "So what does it matter what you're doing, actually, so long as
you're paying your way?"
"Well, I'd prefer something a bit more in my line."
"Who wouldn't?" responded Jack. "But what the heck? Remember the
lines from Gilbert & Sullivan—The Private Buffoon? 'They won't
blame you so long as you're funny'!"
"Very amusing," said Weston.
"Well, shucks, anytime you want to swap jobs—"
"I wouldn't mind," said Weston wistfully.
"Look, chum, take it easy. You wouldn't like sitting on your
unretractable landing gear eight hours a day listening to a bunch of
dirty Marties trying to talk you into slipping them a bit of a lush. Make
you damned sick.
"But it's a job we've got to do and so long as we're hung with it, we're
hung, and we'll give it our best. We know we can do most anything,
so why should we worry?"
Bill grinned and nodded. "I'll bet even the bartender wouldn't like our
job. Hey Soupy!"
"Would the Terran officers desire something?"
"Can you be honest?"
"Can anyone?" returned the barkeep. Like all barkeeps, he was about
to start walking a fence between customers.
"How would you like to have my job?"
The barkeep looked at Bill. "You want an answer?"
Bill nodded.
The barkeep shook his head. "Too much trouble. I am happy as I am.
I, Terran officers, can mix the best veliqua on Mars, and no one on
Terra can mix one at all. So I cannot drive a spacer, nor build a long
range communicator. But I mix the best veliqua—observe?"
They observed as the barkeep made rapid motions with several
bottles, whirled them overhead and came in on a tangent landing with
three glasses, brimful to a bulging meniscus, without spilling a drop.
"Personally," grinned Bill, "I think we've just been hydraulic-pressured
into buying a drink."
"Smart lad, he."
"I'd not put up with that. We didn't ask for it," objected Weston.
"No? Well, so what," grinned Bill, lifting the glass.
"It's okay," said Jack "But look, Al. You still sound as though you were
enjoying life—or should be."
"I'm not."
"Well, Al, if you aren't, it's your fault."
"It wasn't my fault that I got clipped?"
"Hardly. No one is putting any blame on you for getting hung on the
wrong end of a beam. Despite popular rumor, they don't hand out
them things for cutting your hand on a can-opener," said Bill, nodding
toward the purple ribbon on Weston's breast. It was beside another
colored bit, awarded for his efforts in the initial directive attack.
"That one," said Weston, catching Bill's eye, "was a consolation prize.
I didn't earn it."
"My friend, you must learn to tell the difference between humility and
the job of fishing for compliments. Well, chum, you've had a rough
time and we gotta go back and play traffic cop. Let us know if there's
anything we can do."
Weston nodded. They left. They left him alone. Far back in his mind
something mentioned the fact that they were on duty, but he thought
they could have stayed around a bit longer.
He drank too much that long Martian afternoon and was definitely
hung over most of the next day.
Al Weston gave up at that point. Never again would he try to prove
his sorry plight to any one of his former friends. They all insisted upon
looking at the brighter side of his life and ignored his trouble as
though it did not exist.
They were glad enough to see him alive, it seemed, when he'd have
preferred death to this lack-luster existence. He wondered whether
any of them would worry about him if he disappeared. Perhaps if they
thought he were dead—
Well, he had a four-mark commission, which entitled him among other
things to commandeer anything now in the experimental field. He'd
make a show of commandeering a directive power drive and then
drop out of sight.
They'd suspect both his untimely end, and suspect the advisability of
the directive drive. Then he'd show up and prove both worthy. That
would give him his prestige again.
He'd do it at Pluto and, on the way, he'd stop at every way-station
long enough to leave a wide trail. He'd enter a post, discuss Jordan
Green at length. He'd take pictures, make tests and then head
outward—to disappear for about a year. That would fix them all.
CHAPTER IV
Free For All
"Pluto," said Al Weston drily. He'd come through the entrance dome
of one of the sealed cities and was standing atop the Corps
Administration building, looking out over the sprawling city. Since
Pluto was utterly cold, the sealed cities were the only habitable
places on the planet and even they were too chilly for comfort.
He had no Pluto-garb, but he did have his spaceman's suit, which
was internally heated. He, like most of the Corpsmen there, wore the
spaceman's suit with the fishbowl swung back across his
shoulderblades.
Some of them had had the helmets removed entirely, though this was
troublesome around the entrance-locks because none of the men
who were without their fishbowl headgear could work outside of the
inner lock.
But—this was Pluto, and from here, as soon as he could leave, Al
Weston was heading, just plain out!
In accordance with regulations he reported to the port commandant's
office. This time he had no intention of forcing entry to the Inner
Sanctum. His ears were still red from his last abortive effort. All he
intended to do was to report to the office aide and, if the Big Brass
wanted to see him, he'd eventually call.
Inside of the office was the usual scrawl—Yes, Jordan Green has
been even here!
It was authentic and Weston said so aloud. The office aide looked up.
"You're Senior Captain Weston?"
"I'm known?" asked he, slightly surprised.
"By reputation," grinned the clerk. "It's said that you can tell an
authentic Jordan Green by seeing it through a visiscope."
"Not quite," said Weston.
"Have you uncovered anything yet, sir?" asked the aide.
"Are you interested?"
"Everyone is interested," said the clerk. "It will make a darned
amusing yarn when you get all done."
"Uh-huh," grunted Weston. Amusing, he thought. Was his value to the
Space Corps only an amusement value?
"See here," he said to the clerk, "I'd like to try a directive power drive."
"You were on the first directive power expedition against Mars,
weren't you?" mused the clerk. "According to custom and regulations,
you are entitled to any experimental equipment that you used during
the war. Seems to me, too, that you are probably using more power
for space flight than about ninety-eight percent of the corps at the
present time. We have a directive power unit here."
"Then I can have it immediately?"
The clerk nodded. "I'm merely ruminating," he said to Weston. "I'd
prefer several good reasons why you took it other than your fancy to
try it out. It'll make the Old Man less fratchy.
"It's slightly haywire, of course, since it came right from the Power
Laboratory with a boatload of long-hairs on a test mission. They left it
here and we've been tinkering with it off and on. We can get a new
one in a month or so, but you can have the haywire model if you'd
prefer not to wait."
"I'll take it."
"Okay. I'll issue orders for the engine gang to swap power in your
crate."
"Thanks," said Weston.
"Oh, and sir, I almost forgot. It's just an unfounded rumor and I've
been unable to check the truth of it, but they claim there's a Jordan
Green scrawl on Nergal, too."
"Nergal?" said Weston explosively. His mind envisioned a minute
hunk of cosmic dust not much more than a hundred miles in diameter
—Pluto's only claim to a satellite. It was better than thirteen million
miles from Pluto and its rotation was necessarily slow due to its tiny
mass and great distance.
It had been and would continue to be for some years, the solar object
most distant from Sol.
It was uninhabited, airless, cold, forbidding, and completely useless.
There was not even a station on it. Science found the airless outer
surface of Pluto more to their liking. On Pluto, at least, there was
gravity to hold them down. The escape velocity of Nergal was not
really known, but it must have been minute.
"Might be sheer fancy," said the clerk apologetically.
"Better check on it," said Weston. This was an opportunity. When he
left it would be recorded that he went to Nergal. He even wished that
he'd started to write his own name under the countless Jordan Green
scrawls he'd visited. Then they could find one out there, and know
he'd been there and from there...?
In relaxation uniform, Weston sat in a small, out of the way restaurant
and finished his dinner. He was the only uniformed man in the place,
and so when the unlovely pair behind him made mention of the
Corps, he knew they were talking about him.
He did not know them by name, but after a glimpse of them
immediately labeled one of them as 'Dirty' and the other one as
'Ratty'. It was Ratty's voice that caught his attention. He missed the
statement, but caught Dirty's answer.
"By the time all the Fancy Brass gets them, maybe we can have a
couple too."
"The war's over," Ratty snarled. "Why does the Corps need directive
drives?"
"How should I know? Ask Pretty, up there."
"He wouldn't know," snapped Ratty. "He's just taking orders."
"Must be nice to roam all over space with your feed and power free."
"Yeah, but he'd go broke if he had to live on what he's worth."
"That's why most guys get in the Corps anyway."
"That guy is spending about thirty thousand bucks just to track down
a myth."
"Maybe his myth has a sister for me?" guffawed Dirty. "Wonder where
he was hiding when the shooting was going on."
"He wouldn't say," grunted Ratty. "Mosta the dirty work was done by
draftees."
"Well, now the schemozzle is over, he'll come out beating his chest
and telling how he won the war. I'll bet he piloted a office desk and
got that wound ribbon from pinching his finger in a desk drawer."
"Yeah, the Corps is rotten with slinkers."
"He's tooken months to track down this myth. Bet he makes it another
year. Then they'll hang a medal on him for it."
"Any good spaceman could run Jordan Green down in a week,"
grunted Ratty.
"But it wouldn't be profitable to do it quick," answered Dirty with a leer
in his voice.
Weston got up and went to their table.
"Sit down!" he snarled. "You, too!" he snapped at Dirty, taking the
man by the jacket front and ramming him back in his chair with a
crash. Heads looked up, and men faded back out of the way, clearing
the area.
"One," said Weston. "I was in the hospital for seven months,
unconscious from a fracas off Mars with the first directive power
attack. Remember? I was doing a job so that stinkers like you could
roam space unbothered by Martie pirates. Where were you? Hiding in
a mine somewhere?
"At the present time if I spend five years rambling all over space
looking for Jordan Green, you'll still owe me plenty. I wasn't making
money while I was fighting. How much did you make? If it hadn't been
for the Corps you'd be dead."
Weston cuffed Dirty across the face with the back of his hand and
spat into Ratty's face.
They rose with a roar and Ratty hurled table and chairs out of the
way. They rushed Weston heavily.
Weston grinned.
He drove his fist into Ratty's stomach and sliced Dirty's throat with the
edge of his hand.
Here was something tangible for Weston to fight! For almost a year,
he had been railing at the wind, storming at an invisible hand of fate
that had clipped him hard. The men before him were the embodiment
of all his ill luck and he drove into them with a burning hatred to maim
and destroy.
It was a dirty fight. The space rats had no qualms about
sportsmanship and Weston had been tumble-trained on Terra to
accept battle only when it was inevitable, at which point nothing was
barred.
Dirty came in, hammering at his abdomen, and got a knee in the face.
Ratty pulled a knife and rushed in with a slicing swing. Weston faded
back, hit the bar, felt its edge crease his back as the rats moved after
him.
He lashed out with a foot and drove Ratty and his knife back, turned
to roll with a roundhouse swing from Dirty and his right arm knocked
over a beer bottle. His right hand closed on the neck of the bottle, and
he rapped it sharply against the edge of the bar, knocking off the
base.
He kneed Dirty and closed with Ratty. He caught the knife-wielder in
the face with the jagged bottle and thrust him back with a twisting
punch of the bottle. There was a wordless scream.
Weston caught Dirty in the ribs with a hard fist and then cracked the
man's head with what was left of the bottle. It shattered completely as
Dirty staggered back and Weston dropped the useless end. They
closed again, and wrestled viciously across the floor, tripped over a
table and went down with a crash in a tight lock.
Dirty swung his elbow free and Weston missed catching it in the
throat by a mite. Weston let go of Dirty's wrist and grabbed Dirty by
the collar. Up he lifted and down he slammed.
Dirty's head made a thudding crack against the floor.
"Rye," gasped Weston and swallowed it neat.
Then he walked out, paused at the door and said:
"Call the cops and tell 'em to pick up—"
He left with a quizzical smile. He didn't even know their names.
He didn't stop to clean up, but entered his ship immediately. The
directive power drive had been installed and he made radio contact
with the control center that opened the locks in the sealed city.
He went out with a rush and hit the high trail for Nergal.
They'd give him a stupid job, would they? Well, he'd frittered enough
on it. Now he was going to polish this off in a hurry and go back and
hurl his commission in the teeth of Big Brass and stamp out snarling.
A big strong man hunting a myth...!
Nergal appeared within minutes under the directive drive. He landed
and slapped the magnets on to keep him down. If there were
anything to this rumor Jordan Green would have needed a wall or
something to write his name on.
In the scanner Weston searched every square yard of his horizon and
then moved. Four times he moved, each time searching his very
limited line of sight circle. The fifth time he came upon a sheet of
metal, fixed to a metal post, emanating out of a box.
He looped the ship into the air, caught box and post with a tractor and
pulled it into the airlock.
Drifting free, he inspected the slab of metal.
Jordan Green has been here, it said in bold letters.
And below, on the top of the box, there was a pointer in gimbals. A
surveyor's telescope. Gyro-stabilized it was and it pointed off slightly
below the plane of the ecliptic. Weston took it to the observation
dome and applied his eye to it as it stood. In the narrow field he saw
the stars, and the crosshairs centered on a small one. Around the
circumference of the reticule, tiny letters shone:
Jordan Green has been there too!
The star was Proxima Centauri.
"Oh, yeah?" growled Weston angrily. "That I have to see!"
Feeling challenged and outraged, Al Weston shoved in the Directive
Power Drive all the way and headed across interstellar space for
Proxima Centauri.
"Jordan Green!" he growled as the ship passed above the velocity of
light. "That Jordan Green!"
He forgot the incongruity of Al Weston, the first man to penetrate
interstellar space—seeking a phantom that claimed to have been on
Alpha Centauri or, more practically, on one of the star's planets. All
that Weston knew was that Jordan Green had been having fun at the
expense of the Space Corps, just as Ratty and Dirty had in riding him.
It was a private fight. He might hate the High Command's brass but
let no craven civilian criticize so much as the polish on the buttons of
the third-assistant lubrication technician's uniform!
Jordan Green indeed! Well, Senior Captain Alfred Weston would
bring this Jordan Green in by the ears.
And then they'd let Jordan Green explain his pranks.
CHAPTER V
Trail's End
The humiliation of his project died. He began to feel a hearty dislike
for Jordan Green. Not only had the joker caused waste of time and
money and kilowatts during the war, he was now instrumental in the
expenditure of time and money—and was keeping a qualified ranking
officer from performing a task compatible with his training.
Weston growled and swore to finish up this job in quick time. He
could then return to his rightful position and do a job that would set
him up in his friends' eyes once more.
He considered Tony Larkin—a good enough fellow. Jeanne Tarbell—
well, after all, he'd been ill and no girl could sit around all the time.
Larkin was a nice enough egg and could be trusted. But Larkin would
have to take a seat far to the rear when Weston returned!
He'd really show 'em!
The experimental spacecraft, driven by the experimental directive
power unit, bored deeper and deeper into interstellar space and its
velocity mounted high, running up an exponential scale that was
calculated in terms of multiples of the speed of light.
He calculated turnover from sheer theory and a grasp of higher
mathematics, since the heavens were an angry gray-blue outside of
his ports. Then he decelerated and began to wait for the long long
hours to pass before he could see how close his calculations were.
His clocks and chronometers went haywire and he lost track of time.
He slept at odd moments, as he had done on the acceleration-half of
this first interstellar trip.
The idea of interstellar travel came home to him. He, Al Weston, was
making the first interstellar trip. The incongruity was not considered.
He knew that he would find Jordan Green on some planet of Proxima
Centauri. He began to enjoy the idea. His friends, Tom, Bill, Jack, all
of them had considered him lucky. Well, confound Jordan Green, he
was lucky!
And, regardless of what Jordan Green meant, he'd go down in
history, not as a conquerer that went out with the Solar System's most
destructive invention, but as the first peacetime user of directive
power for interstellar flight. He'd comb the Centaurian system, and
then return home with proof. He'd be his own hero!
His ship's velocity dropped below light and he set course for Proxima
IV as a guess. He checked the panoramic receiver, located one very
heavy signal coming from that planet and knew that he was right.
Not only would he be a Terran celebrity, he would also be an
ambassador—first interstellar user of directive power and first
discoverer of an extra-solar race of intelligences!
The planet was unpopulated!
Thick jungle covered it and it was full of wild life. On no hand could he
see any sign of culture. There was no evidence but the single heavy
signal, which he tracked halfway around the jungle-laden planet to
land in a clearing beside a huge, white-marble building.
Weston tracked halfway around the jungle-laden planet to land in a
clearing beside a huge, white-marble building.
On the lintel above the door were the words, in letters of shimmering
jewel-like substance.
Here lives Jordan Green!
Weston smiled cynically. This—was it! He polished the knuckles of his
right hand in the palm of his left hand, flexed both hands, loosed the
needler in his holster and strode forward, hands at his sides, alert.
He hit the door with a hard straight-arm and sent it crashing open.
He faced four people, three men and a woman.
"Well, well!" he said, one portion of his mind wondering what to do
about the woman when the shooting started. He disliked harming
women but he knew that women had no compunctions against doing
a man as best they could.
"Which of you—or how many of you—is or are Jordan Green?"
"Why?" asked the elder man mildly.
"Because I want to strangle him—or even her—slowly and painfully!
Then I'm taking him—he, she or it—back to Terra to answer some
questions!"
"Why?" asked the man. "Has he harmed you?"
Weston stopped short. To be honest with himself, Jordan Green had
harmed no one, but he had been a plagued nuisance at least to
Weston personally. Jordan Green was a sort of a symbol of
something that caused him trouble.
"See here," he said. "They hung the job of locating Jordan Green on
me, thinking I needed some sort of cockeyed feather nest of a job
because I couldn't handle anything real. I didn't want it, but they've
tossed time and money into the job.
"Me—I want to take the joker back by the ears and show them that at
least I'm worth their time and money and let them figure out whether
my efforts were worth it. At least I've paid my way and done what they
wanted me to do! Now—which?"
"What do you intend to do then?" asked the man. The younger man
headed for a huge machine that stood inert, its pilot lights glimmering
to show that it was ready to perform. The older called something in a
strange tongue and the other one stopped and turned with
puzzlement written in every line of his body.
"Who are you?" gritted Weston.
"I am called Dalenger. He is Valentor, she, his sister, Jasentor. The
fourth is Desentin."
"I'm stupefied," gritted Weston. "A fine bunch of nom de plumes. Who
are you? Or do I take you all back?"
"Tell me. Why are you angry?" asked Dalenger.
Al Weston told them. He told them of his ambition and his hopes and
his own personal defeats—and though he did not know it he was
extending himself to convince a total stranger that he, Weston, was a
very unhappy man.
"And now, which of you is responsible for all the scribbling that's been
going on?" he concluded.
Dalenger smiled. "Please sit down, Senior Captain Weston. Jasey!
Get him a dollop of refreshments. I think we're about a have a talk!"
"Get to the point," snapped Weston.
"Patience, my friend. Look. Look well and see this room. We are
official observers for the Galactic Union. We—"
"The what?" exploded Weston.
"In the galaxy are seventy-four suns, all peopled with humanoid
races, entire stellar systems of us. We all possess what you call
directive power. Not only is directive power the key to interstellar
flight, but it is also the key to supremacy. That machine back there is
an example. If the button behind the safety door is pressed your star
will become a supernova because of our development of directive
power.
"With such a means of wiping out an entire star-system, we must be
certain that any newcomers who develop directive power will not be
of a culture that is basically warlike, or filled with manifest destiny to
rule the galaxy.
"This is harsh judgment, Senior Captain Weston, but it is a matter of
being harsh or losing our lives. We are not cruel, but we are not soft
where our future is at stake.
"Ergo, our detectors cover the galaxy, a job that would be impossible
to do manually. At the first release of directive power we set up an
observation post, such as you have found here, and we provide
means to ensure a quick decision.
"When the first flight arrives we can judge the culture from the men
who come with it. If the culture is favorable to the Galactic Union it is
joined. If it is inimical or undesirable in any way, their sun becomes a
supernova, wiping out the undesirable civilization immediately."
Weston looked at Dalenger with a hard, cynical glance.
"Like to play at being God?" he asked sharply.
"We do not. But we like to live!"
"You, I gather, are responsible for that Jordan Green gag?"
Dalenger smiled. "Yes. Your people have no doubt wondered how the
fellow could get around as he did. Actually, it was a controlled-writing,
using directive power from here. We have come no closer to your sun
than this. Our grasp of your language was obtained by reading books,
by listening to your radio and by other means—all available across
the light-years by directive power.
"You see," said Dalenger, "if we came as emissaries we would be
shown only that which your leaders wanted us to see. If we came as
spies there would always be suspicion in your minds. Our spying is
restricted to learning your language and setting up the means by
which you will seek us out."
"But this Jordan Green business?"
"There are a number of reasons why a race will seek the origin of
such a joke. A well-developed sense of humor and the willingness to
spend money on such is desirable. Suspicion is not bad, depending
upon whether it is sheer hatred of the alien or a desire to maintain
integrity."
Weston thought for a moment. They were going to judge his race by
him. He considered and came to the conclusion that he was a sorry
specimen to grade an entire culture on.
"How can you grade a race on one specimen?" he said.
"Since the specimen is usually a competent man, highly trained, a
scientist, we normally discount him a bit. A hand-picked sample is
never representative, but represents the peak of the race."
Weston swallowed. "But look," he said. "That is not fair. I'm—"
"Senior Captain Weston, you strode in here angry. You displayed no
sense of humor. You snarled and promised us all bodily harm and
accused us of having interfered with your plans. Right?"
"Yes—but—"
"Yet," said Dalenger, "you were changing. You see, Weston, you were
a sick man. There is one characteristic that is quite desirable. It is a
sense of social responsibility to the individual by the collective
government. Most undesirable is the type that claims the individual
must be immersed in the good of the state.
"In one extension this sense is called pity. In the other extension it is
called pride. You were hurt and you became ill mentally. And, instead
of casting you out, your fellow men gave you a job that would result in
your convalescence regardless of success or failure, providing that
you yourself managed to follow through—in any manner. You did, by
desperation and anger.
"We don't always judge by the mental calibre of the man who comes.
We must consider the reason why he was selected. We don't value
personal feelings in judgment of a race—we'd be inevitably wrong if
we valued the opinion of a psychoneurotic.
"The judging was finished when I called Desentin to stop. He is young
and impetuous and was about to press the button. So, Senior Captain
Alfred Weston, we welcome you and your race to the Galactic Union!"
Weston blinked. He'd fought against it. He'd been angry at something
every instant of the time between his awakening after the disaster to
the present moment—angry because there was nothing he could do
to gain real recognition. So they hung a joke-job on him to cure him!
And, by the grace of the gods and a long-handled spoon, he had
walked into a situation that might have caused the destruction of the

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Tsinghua PBCSF Chief Economists

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Justin Yifu Lin Dean of Institute of New Structural Economics, Dean of

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© The Author(s), under exclusive license to Springer Nature 1

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Tsinghua PBCSF Chief Economist Forum, known as Wudaokou

of the post-Bretton Woods international monetary system and why he

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Jiandong Ju expressed his understanding in changing world order that a

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Keywords Economic growth · Green technology innovation ·

3.1 China Needs to Maintain

It’s a great pleasure to participate in this roundtable, especially to give

United States, France, Germany, Italy, Russia, Japan, and Austro-

If we compare now with what have happened historically, there is

Because of the low technological achievement in China, it gives the

3.2 Accelerate the Promotion of Green

How can the pressure to address climate change be transformed into a

and stability of the economy. Long-term growth momentum has to rely

Second, it is impossible to set in advance how much space there is

There are different opinions in China about the Tesla factory in

3.3 Adjusting the Structure of China’s

12-month increase since December 1981. While inflation is eroding the

reserve currencies, the possibility of abuse by reserve currency issuance

account surplus, because China’s saving is larger than investment. The

6 Phillip Swagel, Yuan Answers? June 10, 2005, https://www.aei.org/research-pro

3.4 Coordinate Epidemic Prevention

Today’s discussions have been very important and efficient. China’s

The style was unmistakable—as unmistakable as the wrath that

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