Live updates from the 9th Caixin Summit: Global Challenges, Global Solutions, underway this week in Beijing. Follow talks from key figures in government, business and academia.

-----------

Update, 7 p.m.

5G to Create Jobs

Frank Meng, Chairman of Qualcomm China

A total of 22 million new jobs globally will be created by the commercial application of 5G wireless technology by 2035, with nearly half of them in China, said Frank Meng, the Chairman of Qualcomm China. The market value with the widespread use of the 5G technology by that time will reach $12.3 trillion globally, a figure that is higher than the combined consumer spending of China, Japan, Germany, U.K. and France in 2016, Meng said.

Meng said Qualcomm is working with many of its customers to facilitate the commercialization of 5G. He expected that Chinese handset makers will be among the first batch of companies to roll out smart phones based on the 5G system next year.

-----------

Update, 5:35 p.m.

Foreign Investment

Jonathan Zhu, Managing Director of Bain Capital Private Equity (Asia)

The recent dips in Chinese stocks have made markets more tempting for foreign investors. However, Zhu said, the high barriers to exit the markets are hindering potential investments. As a foreign fund manager, Zhu said he still felt restricted in China’s financial market, and called for further opening of the markets.

Zhu said his fund sold around 95% of shares in a company they had invested in to another public company nearly four years ago. The authorities reviewed the project for a year, and after the approval, Zhu’s fund wasn’t allowed to sell more than 2% of their stocks in each season for a one-year lock-up period.

“In the volatile A-share markets, we find the barriers to enter and to exit are too high,” Zhu said. “Frankly speaking, because of this, we didn’t dare to invest in A-share markets.”

-----------

Update, 4:45 p.m.

Financial Risks

Michael Taylor, Managing Director of Moody’s Investors Services 

The likelihood of systematic financial crisis remains low in China, but the ongoing deleveraging and de-risking campaign could create new adjustment risks as system complexity rises, Taylor said.  

Shadow banking, local governments, state-owned enterprises and various financing tools are all inextricably linked. This could create financial shocks throughout different channels, he said. 

China’s deleveraging campaign has been showing some progress and improving its credit efficiency, but it also has had an uneven impact across different provinces, Taylor said.

-----------

Update, 4 p.m.

Education Reform

Chu Zhaohui, Researcher at National Institute of Education Sciences

China badly needs to reform its education system. The starting point should be limiting government interference in schools, Chu said.

Some schools in China have been burdened by excessive administrative evaluations and interventions. “Our elementary schools and middle schools receive 1,000 to 1,700 administrative documents every year. What this means is that, on average, a school will be contacted by administrative authorities 3-4 times a day,” he said.

There is also an imbalance in how school s are evaluated, since different schools are managed by different levels of the government.

“Whether your school is doing well or not depends on which level of government your school belongs to,” Chu said. For example, no matter how well your school is doing, it will not be better than Tsinghua, as Tsinghua is at a higher administrative level, he added.

Schools need professional evaluations – not a single administrative system that is overly centralized at the hands of the government, he said.

-----------

Update: 12:30 p.m.

Don’t Expect 'Made in China 2025' to Drive Innovation

Fred Hu, Chairman of Primavera Capital Group

“If innovation could rely on plans or instructions under the government’s ‘visible hand,’ the Soviet Union would have been the world’s leading innovation power,” Hu said.

“Innovation cannot rely on official documents, leadership instructions, or grand plans such as ‘Made in China 2025,’” he said. Instead, what China should do is create a good environment for innovation. Hu believes innovation is the most critical factor to high-quality economic growth.

Without the painful costs of destructive restructuring, reorganization or even bankruptcy, it’s impossible for the market to be creative and efficient, he said.

However, with deep-rooted planned-economy thinking, Chinese policymakers and regulators have been used to “managing the economy and the markets,” and are “very fearful of market volatility.”

In addition, policymakers ignore the most basic facts — many economic imbalances have been caused by imprudent economic and financial policies, or unreasonable industrial planning policies. China’s fiscal stimulus from 2008 to 2010, for instance, has led to high leverage, excessive investment and overcapacity, along with asset price bubbles in the property and stock markets.

------------

Update: 12:19 p.m.

Slowing Economic Growth 

Fan Hengshan, Former Deputy Secretary-General of the National Development and Reform Commission

Slowing economic growth is the result of economic policy shift, Fan said.

Fan said he holds a “prudent” but optimistic view of economic growth amid the continuation of China’s deleveraging campaign and the tightening of environmental policy. He views slowing GDP growth as the result of the government’s shifting focus to the quality of growth, over speed.

“In the past, we had very loose regulations on which fields of the economy (to develop). Companies could do whatever business they wanted, and therefore we saw rapid development in the property industry and in the speculative finance field. However, this is not possible now. Heavily polluting chemical industries are not allowed… If we stopped ongoing regulations on the property market, I believe the GDP growth would be up two percentage points,” Fan said.

Fan said the government should accelerate its investment in rural and under-developed areas.

-----------

Update: 10:11 a.m.

Economic Reform

“Greater political courage and wisdom” is the key to whether China can succeed in further reform, preeminent economist Wu Jinglian said.

Wu said there are two key conditions that need to be satisfied first: the “establishment of a unified, open, competitive and orderly market system,” and a modern governance system.

China has already introduced many policies that have laid the foundation for these two goals, but whether officials will have the political courage and wisdom to carry them out will be the deciding factor in their success, he said.

Looking back on the course China’s 40 years of reform, improving the quality of development and promoting reform and opening-up has always been the two key items of China’s reform agenda, Wu said.

“The goal of improving the quality of development is to improve economic efficiency, but understanding the relationship between economic efficiency and reform and opening up has been a long process,” said Wu.

Follow our full Caixin Summit coverage at CX Live.