We've just described the different foreign investments 
that turned into debts and subsequently into deficits
 which reduced investment into urban industry
 and caused a lot of unemployment
That is the crisis
and then the unemployed labor was sent 
to the countryside
 so urban industry could have a soft landing
 The soft landing for the crisis was mainly provided 
by the rural areas
 by the people's communes – the collective system
That is why these crises 
always could be recovered from
There was no capital investment
but they still could keep the industries going
That was in Mao's time
The first time the Soviet Union invested in China 
was because of the Korean War
Then a crisis happened in the 1960s
and a lot of urban youth were
 sent to the countryside
 China recovered economically
but in 1967-1968 a second crisis occurred
 and a second wave of unemployed youth 
was sent to the countryside
The third time was 
 when western facilities flowed into China
there were big debts
 and a lot of unemployed urban youth 
were sent to the countryside
Every crisis got a soft landing
 thanks to rural areas
 absorbing the unemployed urban youth
 until the 1980s
when for the second time 
a large amount of foreign facilities 
and machines were received from western countries
The first time it was a 4.2 billion investment
this time it was 8.2 billion
So you get two-and-a-half times
 the first foreign capital flow into China
making the crisis more severe than before
In the 1980s
 when there was an economic downturn
unemployed youth 
could hardly be sent to the countryside again
because the people's communes had been disbanded
and also Mao had died
Mao could mobilize
 the urban youth to the countryside
But in Deng's time
the millions of urban youth sent to the countryside 
returned to the city
That means the unemployment problem got worse
Originally one crisis 
could put ten to twenty million youth 
out of work
 But this time
 there was a newly-added
 ten to twenty million unemployed youth  in the cities  
while all these millions were coming back to the city
They'd been sent to the countryside before as youth 
Now they become older
 So that means the city unemployment 
situation was worse 
than in the 1970s and 1960s
There was a heavy pressure of unemployment
 and the government had to solve the problem
This time the total amount of unemployed was forty million
Originally one crisis could make twenty million unemployed
but this time
 in the beginning of the 1980s
China had more than forty million 
unemployed youth in cities
They were not included in the
 unemployment statistics
 because the government said
 You haven't got a job in the factories
so you are ‘job-pending youth
It was a very strange category
Most of them came back to the cities. They had no job and were named the job-pending youth
the government adopted an urgent rescue policy
 to ask all the factories 
to absorb the surplus labor
Jobs that needed five workers now were staffed with ten
So you five workers give half your work 
and half your salary to these younger workers
Of course then the factory efficiency decreased? 
The efficiency decreased at least by half
But anyway
you try your best to solve these problems 
to avoid these educated youth
these “job-pending youth” 
wandering in the streets 
and making trouble
Before they were absorbed into factories
these youth caused a lot of conflicts
 and the government responded by throwing 
a lot of them into jail
 maybe in the millions
Not only in jail
but also in so-called “labor education
This meant they had to work on some farms or construction sites
without pay
So many negative things happened in the beginning of the 1980s
 due to the heavy pressure of unemployment
There was another negative influence
The government also wanted government departments
 to “open the gate.” 
The government departments set up companies
 to absorb this young generation
 of government officials or cadres
 who also had no job
 when they came back to the cities
So they had an opportunity to join a company
but the companies were firms run by 
the older generation's government departments
At the time 
this was all in the name of “bureaucrat businesses.” 
It was not good
 because with their power they took cheap materials 
and sold them at artificially inflated prices
They took in big revenue not because they worked hard
 but because some bureaucrats 
gave them special priorities 
to access cheap materials 
and sell them at high market price
But that's the beginning
Later they did not sell the materials
They just sold the quota
the documents and quota of
 how much raw materials they nominally had
and did not even pay these factories
If the factories produced glass or cement
 these products would still be in the storehouse of the factories
 but they had the documents 
to sell these things at a very low price
 They sold these documents 
and then someone else could sell them again 
So one document with one quota 
could change hands ten times
A large profit was taken by these 
so-called “bureaucrat businesses.” 
They stirred up a lot of trouble
 and also caused serious corruption 
The corruption was directly caused by such policies
The government made the policy 
to benefit the government itself 
and the young generation of the government bureaucrats
So in the second slide
 I gave you a new concept
 It's not my concept
it comes from the practice of the government
When the government faces a crisis
what should it do? 
That's how governments behave
These bad things - selling the documents 
and quotas many times over - certainly caused high inflation
That means they asked their parents to give them more
at low market price
Selling the materials which were of scarcity
 the market price would go high 
So the less, the higher
A large amount of raw materials - steel
glass, cement, even color TV 
and refrigerator - all of these things
 at that time were not easily available 
because they were in very short supply 
So in short supply, the price was high
and only some factories could produce them
By these so-called “bureaucrat businesses,” 
selling the same products several times over
the market price became much, much higher
The inflation also made the banks corrupt
 because the inflation was high
 the bank rate was low
which means that if you take a loan from the bank
 you will immediately take this revenue
If the bank rate is 10%
it means that they will take 10% revenue
 That is not by your paid labor
 not by hard work
It's just by you taking this loan
and then you can transfer your loan to others
and take the benefits from others
This is a business by transfer
not only transferring materials, products
but also by transferring the money 
to make the banking system with many corrupted people
The government also had many corrupted people
So the corruption was serious in the mid 1980s
 due to such policies
Until the 1990s
 the corruption spread
At that time
 few people could stay uncorrupted
It was not easy to avoid
The corruption came from such policy
Because of the crisis 
There was something happening 
in the political regime
It was still very influenced 
by the central government budget
 The percentage of the central government budget 
was very low
 So the local governments could 
make decision by themselves
 So the local governments did a lot of policies
 that were pro capital 
because they were short of capital 
and they wanted to build local industries
 and then benefit from the local industries
They could have income
 So the local government
 set up a lot of pro-capital policy 
until 1994
when the central government made a new policy
 to make the balance local half 
and central half
Originally the local had 70%
but then was brought down to 50% 
or even less
The local governments could not stand
 such kind of loss
So they took more payments
It's not taxation
it's the fees 
They collected fees from peasants 
from the rural societies
The peasants' burden got higher
That was a new phenomenon 
from the middle of 1990s
 when there were a lot of social conflicts
 The peasants understood
 the government tax was very low
 But fees collected by the local governments 
were three times more than 
the total amount of agricultural tax
 This phenomenon happened in the old government
also in the late Qing dynasty
If a lot of local governments had the ability 
for fee collection
that would be very bad for the grassroots
 for the marginalized population
That is why from the 1980s 
there was serious corruption spreading 
In the 1990s there was an annual increase
 of very big social conflicts
 literally “mass instability cases ” 
They made the central government
 lose power and control
and the local governments had 
a lot of negative things
 that have persisted to the present time
This is very important to understand
From the 1990s
when China was trying to merge into globalization
there was a double supply from China
a developing country
to the capitalist countries
First
 is that China exported a lot of manufacturing goods 
 and raw materials
 From the 1970s
 when western countries transferred out their industries 
especially light industries and labor-intensive industries
 they were short of supply 
especially in the United States 
They had a big financial capital
 It means that they had a financial capital surplus
 but they had a shortage of commercial goods 
and industrial products 
So they need to import
The more the import
 the more they had the current account deficit
 but they somehow got this financial service
 and then to do the transitions to make China 
and other developing countries give their surplus
 to the capital account
The more current account deficit
 the more capital account surplus  
That is, they took benefits two times 
First time benefits means that
 they had a large amount of commercial goods
 Low price means that they did not have inflation 
And they could issue a lot of currency 
but no inflation
because of the low price of the commercial goods 
Then they asked China to reinvest 
into the US bond markets at very low return
 But USA could sell the bonds to developing countries
 and then use the money to strengthen their military 
and political power and control the world  
It means that when you join this globalization
 you lose on two sides
 One side is physical production
 and the other side is financial production
 These are so-called global regulations 
or global order
 If the developing countries 
want to change the global order
 that will be a threat to the western countries
 So the western countries need to unify together 
The universally applied regulation cannot be changed
 by any developing countries
so they have an institutional discourse
and then institutional power controls the institutions
 So by such kind of regulation
 certainly these developing countries 
will have low income labor
 They cannot increase labor income 
And then unemployment is also very serious
 It turns into social conflicts 
On the other side
 they take too much from the natural resources 
and the environment deficits are very serious 
So both the natural resource problems
 and social problems are created not by themselves
 but we are always criticized by western countries 
“It's because you're short of human rights
 you are not good at democracy
you are not good at social management, etc.” 
If you learn the western countries' system 
you will immediately fall into the trap 
That is the so-called paradox of developing countries 
So if one developing country accelerates into globalization
like China
 it is not easy to see the picture
 Even nowadays
 the mainstream still believe 
that China has benefitted from globalization 
but in fact China gives double supply 
and then have two kinds of problems
 environmental and social
When western countries upgrade their economic structures 
from physical industry production 
to financial capital production
they control this high-level position by QE
 making the inflation in raw materials market
 Most of the countries' raw materials markets 
are occupied by transnational companies 
also by western countries
So they can have a large return 
and the stock market index goes high
 It is only a few countries that can control 
have sovereignty over, their raw materials 
Only they can benefit and have a free ride
 That's Russia, Iran, Iraq, Syria, Libya 
and Venezuela 
These countries all somehow had revolutions 
to regain sovereignty over their natural resources
especially oil 
So when QE policy 
helped secure the US big investors 
the big investors invested 
into the futures markets to make oil price increase 
These independent sovereign countries 
controlled their natural resources
 They had large returns 
by means of the high inflation 
but both of these two costs went down 
to physical production countries like China 
and then made China's downturn 
So that is the new phenomenon 
since 2008 Wall Street financial turmoil took place
But very soon 
just 2008 to 2012, just four years 
the raw material price decreased 
because global crisis took place
This destroyed a lot of countries
and the demand of all the countries decreased 
When there was no demand
 the raw materials prices also decreased
 It means that these big institutional investors
 used a big stone to fling at themselves finally 
The growth of these so-called 
independent sovereign countries such as Venezuela
Russia
 and so on 
all of them had big troubles
because originally they could have a free ride
 They could have a big return
 But nowadays there is no return 
It has become a deficit
It doesn't mean
 these countries themselves had some change 
No, it's because the global situation changed
 We must understand 
that is a very important key point
 to do the analysis of these countries
 It's not because the president was bad
 or the government was bad 
A lot of people try to find
 if this was caused by some politicians
 No, it was caused by the global market 
So we can see that China now 
has become the biggest industrial country 
but its position in the world competition
 is still very low 
So China is not a strong industrial country
 It's a weak industrial country
China can issue a lot of paper money
 to have a big financial amount
but still not a strong country
 It's weak because it is not competitive 
So we see that the only possibility
 is do something inside
 It's social innovation
 Try to have the natural resources revenue 
and labor resources revenue 
and also maintain the sovereignty for currency
 Then you can have currency revenue
 By these revenues 
you can upgrade your position a little bit 
and avoid collapse
Since the beginning of the 1990s 
western countries talked about China's collapse 
for many years
 Every time there was a crisis
 they would talk about China collapse
 Soon you will collapse 
But up to now 
China has not collapsed 
because it has put in a lot of efforts
 in this revenue development
 and have a little bit upgraded its position
 China hasn't collapsed
 So we need to keep doing social innovation
 We need to have more readjustment 
for the national strategy 
Here these curves show textiles
plastics and electronics, etc
 All have so-called smiling curve
 For example
 the upper one shows the whole country
 That is the smiling curve of the state competition
 And the later one is different factories and industries
 All have such kind of smiling curves
 These industries in China all are at low level
China is not a strong industrial country
 but a weak industrial country
even though it has a big industrial capacity 
Here is the US economic structure
 Here the enterprises are physical production 
because physical production
 has transferred to overseas
 and then overseas profits directly 
come back to the capital markets
So these institutional investments 
have such a kind of circle 
The government QE subsidized 
these institutional investments 
So they have this circle 
But enterprises 
when they transfer out 
their employment will be reduced 
So the labor social security is also reduced 
and cannot contribute 
to the government redistribution system
 so that the government will have a fiscal deficit 
and debts 
The more deficit, the more debt 
and more government bonds 
The more government bonds 
the more paper currency 
to buy the government bonds
So that means financial capitalisation 
became larger and larger
This venture ball became larger and larger 
So the financial capital became bubble-ized 
and the bubble break will be tomorrow 
next month, next year
 Anyway
it should be and must be broken 
Because the government cannot do redistribution
 a large number of unemployed take to the street
There is a lot of street violence
And also because the benefits are only shared 
inside of this capital group
they have this kind of American policy 
to do the money strategy
The money strategy mainly relies on 
energy and grain 
The futures markets of energy
 and grain 
are controlled  by institutional investments 
 So the capital plays two other games
 energy and grain
 It has a negative impact on 
developing countries
 These show American QE 1, QE 2, QE 3
 and money flowing into the institutional investments 
to use the money strategy 
to have a negative impact on developing countries
 So we know the so-called international regulation 
the world order 
What is that? 
It's exploitation by financial capital groups 
of small numbers 
The large number of grassroots 
the marginalized population 
just take the cost
We have to make everyone
 understand the unfairness
the unfair regulations must be broken 
must be turned down 
We need a new world
Another world is possible coming from 
such kind of bad situation 
We believe an alternative, another world
must be implemented
Also because of moving out their physical production
 from the 1980s there is neo-liberalism
 The neo-liberalism 
is a soft power  
and an ideology
 It combines wih the financial capital
Here shows the double
 The financial capital 
since the 1980s to the crisis year 2008
 increased many times 
That is the world 
Here the bars show the global inflation
 was mainly caused by energy
 and food
Just now I mentioned energy and food 
 futures market prices increased mainly by  
transnational companies investing into
 these futures markets as speculation 
So they get a lot of returns
 they take the returns
but developing countries 
and poor countries take the cost
Now we talk about part 4 
China faced the new challenge 
led by the global mainstream 
But inside of China 
they did have the policies to carry out the rebalance
 Originally by the 1980s and 1990s
 by marketization and globalization 
China enlarged three gaps 
First gap is regional gap 
coastal China, inland China, income gap enlarged 
The second gap is rural and urban gap 
Rural people have low income 
urban people have high income 
The third one is poor and rich
So these are the three gaps
 And because of the global crisis
 especially due to the 1998 East Asia financial turmoil
 China faced
 the challenge of overseas demand decreasing 
and turned to overproduction 
That is the fourth overproduction 
that happened in China
Then 
China started to have regional gap rebalancing policy
That is a national strategy
China invested in different regions
 especially western China, mid-China 
and northeast 
And for more than 8 trillion yuan
 it's almost 1.1 or 1.2 trillion US dollars 
for the regional gap rebalance
 From 2003
 when China changed its policy
 to focus on rural regeneration 
it invested into rural 1.1 or 1.2 trillion US dollars
 So the regional gap and rural urban gap
 just by 10 or 12 years 
aimed to realize rebalance 
Such big investments make rebalance
Since 2015
China started to do the third rich
 and poor rebalance
 I've got to say that the rich/poor 
rebalance cannot be carried out 
because in the financial capital era
 rich means that they can take the benefits
 from the financial market
 Few people can do business in the financial market
Large number of people 
are still in physical production 
So it means that the rich become more rich
 That will be the long-term trend 
But you can do something
 to improve the situation of the masses 
of the large population 
which means the low class
so trying to do something for the lower classes 
is better than to announce you can bring down
 the higher classes 
Let them still be in the financial market
 to take these intangible returns
 These are just numbers
 But you strengthen the physical production
 to make it inclusive and ecologically sustainable 
So that is what the Chinese nowadays
 take as a domestic strategy 
They have then two rebalancings
 Many trillions will be invested
 for poverty reduction 
That will be the right choice
Here: the precondition 
When we talk about national strategy 
and Chinese readjustment in the new century
 we said there are a kind of twin pyramids 
it means that China economically 
and socially was still stable 
Economically
 these years 
because of the physical construction 
and infrastructure construction 
China has 5 trillion yuan in physical assets
Based on that
it has 180 trillion yuan in financial capital 
Above that there is 60 trillion yuan in government debts 
And these structures are still stable 
because they keep investing into
 the infrastructure construction
You can enlarge your physical properties
 and you can have more financial properties
 So the physical properties
 and financial properties enlarge
 which means debts can be reduced
 as a percentage 
Here, because of land reforms
 the low classes all have property 
so the lower classes are still stable
 Above there is a new emerging middle class 
and the middle class now is the main force
 in consumption 
to enlarge consumption of domestic goods 
So domestic demand can be enlarged
 by the rising middle class 
but the middle class have a very confused ideology 
That is the trouble
 The middle class in the world somehow is 
the main force to absorb these commercial goods 
And also the middle class want to 
have a green development 
They believe in food safety and anti-pollution 
social movements and so on 
So the middle class can also be a positive 
force to maintain stability.
Here is a very interesting thing. 
China, politically speaking or socially speaking
 is controlled by the politicized upper classes
 They control a large number of the assets
 both financial assets and physical assets
mainly by state-owned enterprises 
So the large number of properties 
was in name of the SOEs 
but in fact controlled by the ruling party
This one is more politicized
It doesn't mean
 that other countries' upper classes aren't politicized
They're all politicized 
but China's upper class is 
strictly  controlled by the political system 
 That is fully politicized 
Almost every big firm operating as an SOE 
or state-owned enterprise 
must be appointed by the Organization Department of the Communist Party of China
unit of the party 
If you're in the province 
and a big firm operates under the name of an SOE
 the president and the CEO of the firm 
must be appointed by the provincial Organization Department of the CPC
unit of the party 
So that's what you call fully politicized 
To give an example
 because of anticorruption 
we have four big banks 
all of them are among the world's top five 
These bank presidents 
and CEOs have an annual income 
of two million yuan
 and two million is not so big 
compared with the international banks
 and foreign banks
 just maybe ten percent of these international bankers
But in China
two million yuan annually is a big income
So the central government gave an order
 You need to reduce by half
 Nobody said no 
They very soon cut half of their salary
 down to one million yuan 
 Nobody could even complain
 That's because they are totally controlled 
by the central organizational department
 Even if they think this is unfair
 “We have done a lot more work 
than foreign bankers
Their salary's ten times bigger than ours 
Now you ask me to cut my salary in half 
I'll be getting one twentieth …
 it will be very low compared with others.” 
Anyway, they have to follow orders 
So that is why
 the Chinese government can use two hands 
to do the readjustment
One is the physical system
 and the other is the banking system
 Both belong to the central government
 That is, the strong power in the world can use two hands
 which means this head can directly 
use these two hands to do the adjustments 
That is also 
why when China was facing the crisis
the Chinese government 
always took counter-cyclical measure 
These measures are not like the free market countries
 or neoliberal countries 
which use pro-cyclical measures
That is the difference
That's why these foreign countries 
one by one
 fall into the trap of debts and deficits
 but China is still here, 
from the beginning of 1920s until now 
For more than twenty years a lot of western people 
have been talking about China's imminent collapse
 Now they change to talk about China's threat 
They argue
 can we allow the Chinese system to lead this world?
 They say no 
but they tolerate their own failures
 They cannot jump out from the trap 
They refuse to learn such kind of system
 I did not say it's a good system
I said it worked for countering the crisis
Even if my personal values may not be in line 
with such policies 
I think about the masses 
how a population of one billion
 cannot endure a collapse 
I have to acknowledge 
and accept the workable solution
 It is not because I share these attitudes or values 
it's just because I need to think about 
what is practicable 
Do you think this country is going to collapse? 
Do you think this country
 is going to join the global competition? 
We'll maintain ourselves 
not collapse
I don't think that this country's system is good
 I just think it's workable 
effective 
Here you see all the developed countries
 the total amount of their labor is just 430 million 
But in China we have more than 800 million
 Double! 
Nowadays we have 840 million laborers 
This means 
if you take the old western system into China
 can you solve the problem of unemployment? 
No way! 
Here the labor population will be 940 million 
It means that we're going 
to have the biggest labor force 
Can you give them jobs
 by means of the western system? 
No way 
Because in the western system of manufacturing
 there's less than 100 million laborers 
So if you know the situation 
you may know that nowadays 
we have 
not only the largest total amount of industrial laborers  
we also have 500 million rural laborers
If you tap into the rural labor pool
 you will have a big flood 
The labor is a flood 
they will flood into the cities 
So the system now in China can maintain stability 
by having the cities as a capital pool 
and rural areas as a labor pool
It is unfair 
but it is workable
 And we can see that this rural labor
 if they only work in agriculture 
they cannot have income 
especially cash income 
But you have to make them
 stay in the countryside
Because the urban areas are always 
where the crises happen
 If the cities in crisis can transfer out 
their costs to the countryside
 the crisis will get a soft landing in the urban areas
 If they cannot
 that will be a big disaster
So when I talk about such kind of analysis
 I'm very embarrassed. 
I don't want to say that 
because it's not politically correct 
according to the Euro-centric system 
according to their discourse
 But if we summarize the ten crises in China
we must find out
 “What is the background? 
What are the problems
 during these six or seven decades?
 What really happened in these seven decades?” 
So we can see that in the new century 
when China adopted the strategy readjustment
 the total amount of the infrastructure 
construction investment is 15 trillion yuan 
more than 15 trillion now 
And they have more than 840 million laborers 
to have a cash job 
and solve the labor surplus 
by a large amount of investments
 into the infrastructure construction
By such kind of construction 
you absorb this surplus labor 
by giving them a cash job 
But can China continue making 
such large investments into the infrastructure?
 Let's have a look 
Here is the pollution … and I don't want to talk too much
 At that time they said 
there'd be a seven trillion yuan investment 
to solve the pollution of the land 
just to clean up the land pollution
They said it's a big opportunity 
to boost the economy 
It means that investment drives economic growth 
Here are the government debts 
 most of these western countries 
are above the bottom line 
but China is still below the bottom line
This means
 that to use the government bonds 
to use the government's debt bonds
you still have room
Here the graph shows 
that when you're facing an economic crisis
the EU countries
 the OECD countries 
when they have an economic crisis 
physical investment decreases 
So it's the same
 the GDP decreased
 all the investment decreased
 under the pressure of the crisis
 Fixed investment is the key 
driving force for economic growth 
So just now
 I mentioned Chinese still can have the room
 which means they still can have the key events
 to drive economic growth 
And here you see these decades 
from the new century
only rural investments 
can bring stability 
can make the crisis have a soft landing 
This picture shows the investment into the rural areas
This one is the new strategy
 that is to say the so-called continental strategy 
whereby you make a lot of investments
 to build these three land bridges
 Here is the third land bridge 
Here from Hong Kong 
pass the south Asia and west Asia
 then to Turkey and then to Europe 
and also can go down to Africa
 So originally we have a land bridge 
that is Siberia 
and also from Lianyungang harbor 
to Rotterdam in Holland 
So we have two land bridges
 Now we need to have the third land bridge 
and the third land bridge mainly passes through
 these developing countries
 especially the labor intensive countries 
We believe you can create 
a large number of cash jobs 
for these labor resource countries
 and make them have a bit higher income 
and then they will have domestic demand 
 for the domestic industries
 especially the light industries 
and textile industries 
By means of these industries 
they can create more jobs 
Then step by step 
these areas will have poverty reduction 
If they carry out this third land bridge
 Africa, south Asia
and west Asia all can benefit
 Here is the southeast Asian peninsula
 They have built a railway network 
But now China's investing for improvement
China is working to improve the highways
 and the railways 
for a perfect network
 and to make people along this road 
have a chance 
Also remember the raw materials
 the land prices all can rise
 by means of this transportation network 
 physical property all can increase in value.
 If you set up the network
 think about these small landowners
 these small household owners 
their properties all can go up in value
The value of the properties can be increased 
by such kind of construction. 
 China is also trying to have 
a kind of citizen participatory agriculture 
which means making the middle class
 and lower middle class out to the countryside
and join with the peasants in cooperation 
to bridge rural and urban
 and then to have new room
 for these middle class to have their investments 
So we have a lot of cases
 to show these urban middle class 
going to the countryside 
and mixing with the peasants in the countryside 
and villages to improve the environment
 improve on traditional housing architecture 
and also having many ecological constructions 
to benefit both sides
 They have a lot of cultural regeneration events
 They have a lot of traditional techniques
 being regenerated
Many things will happen among the people
 They also can absorb a lot of investments
 but it's not big investments 
it's small and midsized investments
 If we do ecological civilization 
as a construction 
there'll still be a lot of space for the medium 
and small enterprises 
and also for implementing sustainability 
and inclusive growth  
These things we have had in China
 for more than 15 years are very effective 
Finally
we will give the conclusion 
 what we can summarize from these ten crises 
in China from 1949 to 2016 
It's a 67-year modern history 
We can have some experience
 I said without exception
any country 
all developing countries
 adopt pro-capital policies
 in a capital shortage stage
no matter what -ism it is 
it tended to be pro-people 
when capital oversupply appeared
Which means that 
when they are facing the challenge
 of shortage of capital
the governments set up pro-capital policy
And when they have oversupply of capital
 they turn to pro-poor or pro-people policy 
China is one case
 Before the 1990s
 China was extremely short of capital
From the 1990s into the new century
 China had a capital surplus 
and tried to set up policies that were pro-poor 
pro-people, pro-environment
pro-natural resources, pro-ecology, etc
It's trying to change step by step
 But it faces the block of interest group 
because for a hundred years
 there have been many interest groups profiting 
by transferring out the costs of industrialization 
They do not want to have a pro-people 
pro-environment policy 
they still want pro-capital policy
So there is a competition 
This is my first conclusion 
The second one 
with any overseas investment 
investors from transnational companies 
tended to be the institutional regulation setter 
or creditor for maximizing their capital profit
 I personally have facilitated a World Bank mission 
to carry out the transition rules 
in China in the 1980s to 1990s
 I know very clearly 
what the purpose is 
of these Euro-centric investments 
The investments change our institutions
 our organization 
even our political superstructure 
because the investors can't benefit
 if these aren't changed 
 If we don't follow this Euro-centric system
 it will be very difficult for them 
to get the kind of returns 
So any foreign investment 
they want on their investments into developing countries 
 must in accordance with this Euro-centric model 
 include efforts to change 
the developing countries' economic systems 
That is the kind of competition 
we're talking about
 That is also the contradiction 
between foreign investments 
and the local regime
 It's not about one system being
 better than the other
I'm just telling you about this 
very important phenomenon
 How you deal with 
it depends on how you analyze the situation
The third point
 if the developing countries 
can take up countercyclical measures 
only by holding onto their sovereignty 
over natural resources and financial resources
 this means that 
if you have sovereign control 
over your financial system
 if you control the natural resources 
of your own country
 you can benefit 
by means of countercyclical measures 
Just now
 I mentioned that 
when the US adopted the QE policy
 they can benefit
 the countries that have independent  
sovereign control over their own resources
 like Russia, Venezuela, Iran
countries that USA dislikes 
but still in order to preserve its own interests 
 USA got to let these countries 
get a lot of free-riding returns
So that means that 
they control their own natural resources
The Venezuelan leader
 Hugo Chavez
by Chavez's revolution 
took back more than 70% 
of the oil resources from private hands 
to the national oil company
 And Vladimir Putin in Russia also  
carried out a “Putin revolution” 
to take back control over natural resources
more than 70%
 Iran, by the so-called Islamic revolution 
took back their resource sovereignty 
So these countries 
when they control their own resources 
at the state level
 you cannot say that is a democracy 
that is statism 
or state capitalism
 but they still can benefit themselves 
They can at least distribute wealth 
to the lower classes
 I don't think that it's a better system
I'm just saying you should do something 
to maintain sovereignty over your natural resources
 and also your financial system 
This is our conclusion 
The second slide of the conclusion
 China had two kinds of crisis
 One is internally generated crisis
 especially during the primitive accumulation
 for state industrialization 
since the 1950s
 and for the expansion since the 1980s 
which means that the industrialization 
needed intensive capital investment
 When you are short of capital
that will initiate a lot of crises 
crises caused by primitive capital accumulation
 So that is internally 
Then the externally generated crisis, 
with import deflation 
or inflation by overseas financial bubbles in 1997
2008 and 2012
This means that when western countries
 especially western unipolar power countries
 the leading countries
 upgrade their economy from physical production
 to financial bubble production
they've got to transfer these financial bubbles 
to developing countries 
and physical production countries
 China took too much of the costs by these transfers 
The western countries transferred their costs to China
 mainly by means of the financial crisis  
When the first financial crisis happened 
in East Asian countries
that is East Asian financial turmoil 
it transferred a large amount of the cost into China 
causing China deflation 
and also a very decreased economic growth 
because overseas demand largely decreased 
Then China turned to the first overproduction 
That was caused by the external events
In 2008 when Wall Street had the financial turmoil
 at that time China had just gained very high 
annual growth, more than 10%
 Suddenly there was a decrease of foreign demand
 In 2009
 the global crisis immediately decreased
 China's GDP and brought China into the crisis
When the European debt crisis
 and global crisis happened in 2012
China had to face the challenge of de-industrialization
 because there was less foreign investment 
flowing into China 
and overseas demand decreased
 And then the current account 
and capital account were both in deficit
So overseas crisis pushed China 
into a worse crisis
 its second period of overproduction
and then de-industrialization 
and then turned its economy 
not into a bubble 
but, into an intangible financial speculation economy. 
The real estates and financial markets 
both went into crisis starting in 2012
From that point
till 2015-2016
China tried to change its economic strategy
 turn to ecological civilization 
to have more physical production
 and to not block but reduce the speed 
of financialization 
This means that the one economic way 
that is indicated by the leading countries is 
to follow them into financial capitalization 
That is the world mainstream
Then it became a bubble
When the bubble breaks, you collapse
That is one way with no U turn 
Another way is to try to find an alternative
 in the belief that we can have another future
 another world
That world is ecological civilization
We must have a mix of urban and rural 
 together towards ecological civilization 
and have inclusive growth 
Pay more attention to conserving your natural resources 
and your traditional culture
and believe that you can have a beautiful country
beautiful countryside
can have a rural area 
And by keeping your construction in the countryside
 while not destroying the environment
not consuming too much resources
 going to sustainability 
we may have a good future
So now we finish our summary of the ten lectures 
on the ten crises 
we hope that you can see 
that more than 70% of China is not arable land
It is mountainous area and grassland 
and so on 
not arable land 
China cannot really learn from the experiences
 of Australia, the United States, or Canada
 not even from Brazil 
I think that you can understand 
what I talked about
 I try to give you an explanation
not the mainstream one
 You can take it as a reference 
Thank you
