LSE SU China Development Forum 2016: "Navigating Complexity"

Session 1: January 30, 2016
Podcast: LSE: Public Lectures and Events
Host: LSE Film and Audio Team
Main Speakers: Raymond Lee (Director, BBC Chinese); David Snell (PwC London Clients and Markets Partner)

Episode Overview

This session of the "LSE SU China Development Forum 2016: Navigating Complexity" opens the day’s discussions with major thinkers providing their insights on the challenges China faces in 2016 and beyond. With a theme focused on managing complex change, the forum zooms in on political, economic, and social uncertainties—from cross-straight Taipei relations and "One Country, Two Systems", to economic slowdown, market instability, anti-corruption campaigns, and China's role on the world stage. Key talks come from Mr. Raymond Lee and Mr. David Snell, each sharing perspectives rooted in journalism and business, respectively.

Key Discussion Points and Insights

1. Introduction and Forum Context

Yan Wei Ge, President, LSE SU China Development Society

• Welcomed attendees, outlined the growth and purpose of the forum:
  • "The theme of this year's event is called Navigating Complexity. We seek to provide answers to complex problems at China that China is currently facing..." (00:34)
• Announced change in panel: Session on "Institutional Reasons for China Slowing Down" replaced with one on "Inequality in China" due to Professor Xu Chenggang's illness. (02:35)

2. Keynote 1: Raymond Lee, BBC Chinese

(07:27 – 27:46)

Six Key Questions Facing China in 2016

a. Cross-Strait Relations and Taiwan's New Leadership

• Tsai Ing-wen's historic election as Taiwan's first female president; DPP's parliamentary majority (08:03).
• Rising influence of new, more assertive pro-independence parties (08:53).
• Worrying increase in anti-China sentiment, especially in the younger generation:
  • “These people...are blaming KMT government for culturing too much to Beijing and also betraying Taiwanese people. They want to have a strong self identity of Taiwan.” (09:16)
• Call for more dialogue among youth across China, Taiwan, Hong Kong (10:17).

b. "One Country, Two Systems" and Hong Kong

• Growing discontent in Hong Kong toward Beijing (10:56).
• Concerns over the "real meaning" of the model:
  • “Many Hong Kong people actually now are shocked by the mysterious experience of some booksellers in Hong Kong and Thailand…” (11:42)
• Anticipation for the September Legislative Council election as a major indicator post-Occupy movement (12:08).

c. Economic Growth: What is the "New Normal"?

• Noted GDP growth drop to 6.9% in 2015, slowest in 25 years, and skepticism about even those figures’ reliability (12:53).
• Debate over what level of slow growth should be considered “normal”—6%, 5%, or lower? (13:56)
  • "Perhaps we shouldn't be too obsessed with China's GDP growth rate. Instead we should pay more attention on the quality and cost or price of the economic growth as well as the benefits it may bring to ordinary people." (14:39)

d. Financial Market Stability

• 40% stock market crash in previous summer, major volatility persists (15:36).
• 22% drop in Shanghai index in January (16:23).
• RMB depreciation and capital flight; concerns over further devaluation:
  • "The turmoil of Chinese stock market plus a weaker renminbi already caused significant capital flight out of China." (18:17)

e. The Anti-corruption Campaign

• Over 100,000 officials indicted since 2012 (21:32).
• Xi Jinping’s popularity—some compare him to Mao or Deng (21:54).
• Unpredictable investigations; recent public removal of Wang Bao, former Minister of National Bureaus of Statistics:
  • “He was chairing a media briefing...two hours later...he was taken away by the investigators and for corruption. Ironically… the news of him being investigated came out even quicker than the news of him giving the media briefing…” (22:50)
• Raises the question: will the campaign be replaced by systemic, transparent reforms? (23:26)

f. "One Belt, One Road" Initiative

• Xi Jinping’s diplomatic activism as a sign of China’s expanded global role (24:25).
• Success depends on “delicate situation of the countries concerned”; hope for a positive impact from the Asian Infrastructure Investment Bank (25:03).

g. Sino-British Relations

• President Xi’s UK visit resulted in £40 billion in deals, examples in nuclear power and film industries (26:08).

Closing:

• “I look forward to more good news about Sino British cooperation in the year of Monkey.” (27:29)

3. Keynote 2: David Snell, PwC

(28:10 – 38:15)

a. Dramatic Transformation of China’s Economy and Society

• Reflected on 30 years of business experience, starting when “communication with the rest of the world was really difficult...no email, no fax machines, no social media.” (28:42)
• Economic reforms have lifted hundreds of millions out of poverty (29:25).
  • "70% of the world's population lifted out of poverty between 1985 and 2010 were all Chinese." (29:25)
• Chinese GDP up 75-fold since 1980; rapid, visible urban and infrastructural changes, as evidenced by the transformation of Shanghai’s Bund and expansion of air travel. (30:12)

b. Pace of Change and Business Complexity

• Shared anecdote: dramatic mechanization and infrastructure in Jinzhou between 2010 and 2012—a microcosm of national change (31:30).
• Acknowledged the forum’s apt title: "Navigating Complexity" (31:50).
• Need for agility and adaptability in such a rapidly evolving business landscape.

c. China’s Long-term Policy Advantages

• Five-year plans and the ability for Chinese political systems to take a longer-term view than Western counterparts (32:30).
• Cited strategic importance of renminbi internationalization and cyber-economy (33:02).
• UK as a natural base for Chinese international expansion; London a key hub for “One Belt, One Road” (34:10).

d. Current Challenges for Business in China

• Referenced AmCham’s survey showing corruption fears have shifted off the main concerns list post-Xi’s anti-corruption drive (35:11).
• Downside: new caution among businesspeople, “fear of doing business to be seen in meetings publicly” (35:32).
• Labor costs rising, new international competitors, need to shift from heavy industry to high-tech and innovative sectors (36:12).

e. Cultural and Linguistic Challenges

• Broader business issues: language barriers remain—advocates for more Mandarin learning in the West (36:51).
• Cultural differences significant: “It took me a long time to really understand how different we were as people and cultures and how that impacted on the way we conduct business…” (37:20).

f. Looking Ahead

• “The golden age of business in China is perhaps drawing to a close. We heard about entering a new normal. I like to see this as the dawning of a new age and a new era where we see longer and more stable platforms from which to build business and global businesses...” (37:40)

Notable Quotes & Memorable Moments

• On Taiwan Youth:

  • "These people, they are not happy with the current situation...They want to have a strong self identity of Taiwan."
    (Raymond Lee, 09:16)

• On Hong Kong Uncertainty:

  • "Many Hong Kong people actually now are shocked by the mysterious experience of some booksellers in Hong Kong and Thailand actually in recent months."
    (Raymond Lee, 11:42)

• On China’s Slowdown:

  • "We should pay more attention on the quality and cost or price of the economic growth as well as the benefits it may bring to the ordinary people."
    (Raymond Lee, 14:39)

• On anti-corruption’s reach:

  • "...the news of him being investigated came out even quicker than the news of him giving the media briefing..."
    (Raymond Lee, 22:50)

• On era-defining progress:

  • "70% of the world's population lifted out of poverty between 1985 and 2010 were all Chinese."
    (David Snell, 29:25)

• On future UK-China links:

  • "Now it's a great time to be considering how China and the UK can work together."
    (David Snell, 34:20)

• On the ‘new normal’:

  • "The golden age of business in China is perhaps drawing to a close...I like to see this as the dawning of a new age and a new era where we see longer and more stable platforms..."
    (David Snell, 37:40)

Important Timestamps

• 00:34 – Forum introduction and theme by Yan Wei Ge
• 07:27 – Raymond Lee’s keynote begins
• 08:03 – Taiwan election and new parties
• 10:56 – Hong Kong issues and “One Country, Two Systems”
• 12:53 – Economic slowdown and the “New Normal”
• 15:36 – Stock market and financial volatility
• 21:32 – Anti-corruption campaign, Wang Bao removed
• 24:25 – Belt and Road Initiative
• 26:08 – Sino-British cooperation
• 28:10 – David Snell’s keynote begins
• 29:25 – Poverty reduction statistic
• 31:30 – Pace of change, Jinzhou anecdote
• 32:30 – Five-year plans and long-term policy
• 34:10 – London as Belt and Road hub
• 35:32 – Business challenges post anti-corruption
• 37:40 – The “new age” for global Chinese business
• 38:26 – Parallel session instructions

Structure & Tone

The speakers balanced a tone of sober analysis with optimism, each drawing on professional and personal experiences. Raymond Lee, as a journalist, provided a sharp, current-events-driven breakdown, while David Snell brought a business and historical perspective, rooting insights in decades of first-hand engagement. Both emphasized change, adaptation, and the complex web of political, economic, and cultural dynamics defining China’s future.

Summary Takeaways

• China is at a crossroads on multiple fronts: Political identity, economic strategy, and global role are all in flux.
• “Navigating Complexity” aptly defines both the challenges and opportunities for policymakers, citizens, and foreign partners.
• Anticipate volatility but also innovation and continuing dialogue, both within China and internationally, especially with the UK.