The Written Records of Nanjing Internationalization Development Forum

Kong Qiuyun: Distinguished guests, ladies and gentlemen, good afternoon. This morning, I listened to the keynote speeches delivered by Nanjing Mayor Lan Shaomin and other leaders, and also shared the Global Competitiveness Report released by Professor Ni Pengfei and Mr. Marco Kamiya. This afternoon, our first session is the Nanjing International Development Forum. We invited representatives of some major level institutions and planning advisory bodies of the domestic city internationalization to make further suggestions and explanations on the current situation and policies of Nanjing's city internationalization development. Next, may I invite the first speaker, Mr. Michael Hales, senior partner of Kearney, to speak on the topic: Global Urban Index Analysis and Nanjing City. Welcome!

Speaker: Michael Hales

Greetings! I work with AT Kearney, we are one of the oldest management consulting firms started almost 100 years ago, and I joined Kearney about the same time that we opened our offices in China in 1985. So I get to be one of the oldest consultants in Kearney, one of the oldest consulting firms. We have had a keen interest in globalization for the last fifty years. And we started to realize that as we did some of our globalization studies, we would look at global foreign direct investment confidence, as well as global services location indexes, so where would companies locate some of their shared services of locations. And we started to realize that companies didn't invest in countries, and they didn't locate in countries, they invested in cities and they located in cities. So about ten years ago, we realized that cities were going to start to emerge as a key actor in globalization. So we started the Global Cities Index based upon that instinct.

We learned a couple of things right away, we learned that the best invest is building superior capabilities, in their people, in their businesses and in their culture. But we also found that they did one other thing exceedingly well. They started to develop an international plan, much like Peter Taylor talked about earlier today. And in terms of some of the city pairs, they proactively look outside of themselves to see how they can continue to improve. We found that the key success factor in doing this was the extraordinary teamwork that emerged between the leaders of the city and the leaders of the businesses located in those cities. We then further took a step back and try to understand how the cities in China, how were they improving relative to cities and other regions, and we found that cities in China were improving much faster than cities in other regions and we'll take you through some of the evidence of that here later in the presentation.

Specific to Nanjing, as you've heard already today, is a leading city in China and also a global city. It's numbered 7 in China in our Global Cities Index. And it’s No. 5 in China in our Global City Outlook. This is just a little history of the global cities index in the Global City Outlook. We were designed based upon input both from people within Kearney but also academics and city government people. So from our perspective it’s the result of collaboration across all the key actors in the emergence of cities. And we find that it's used by executives to help them place where their regional headquarters should be, and in some cases, where to move some of their headquarter locations, and for mayors and leaders in the cities to start to develop their investment strategies. So it has a very significant strategic input. As I mentioned, there's two components. There's a Global City Index that looks at the performance of cities today, and then a Global City Outlook, that looks at last five years of data and then projects that forward to understand what cities have the most potential for the future.

Here's a quick look at the results of the study. As you can see on your left hand side the Global City Index scores, the first two columns are how those cities perform in the Global City Index. The third column is how that city performs in the Global City Outlook. So you can start to see whether or not there are correlations between how city performs today and how it will perform in the future. And as you can see, on the Global City Index of the cities in China are highlighted in red. China has a significant presence across the performance of leading cities today. When we then go to the other side of the page and look at the Global City Outlook, there is an anomaly here, there's San Francisco pops up to the top of the list. They have consistently scored as the NO.1 city in the Global City Outlook, largely due to their extraordinary innovation capability. The other cities at the top of this list are also cities at the top of the Global City Index, so there's a lot of reinforcement.

What we have found is that there are 17 cities that rank in the top 25 of both the Index and the Outlook. And those cities are in the top 4 of both of those, so we see these cities as the global elite. A lot of these cities, you look at this listing and no surprises, particularly those that are located in the Americas and in Europe. But the list in Asia, we see as showing that there is still a lot of opportunity and a lot of competitiveness for who will be the global city of the future. When we look across all the metrics for the Global City Index, there's 27 metrics, so we can create the hypothetical perfect city, but it takes 15 cities to make that hypothetical perfect city. So there's no one city or no couple cities dominate the 27 metrics for the perfect city. When we do the same thing on the Global City Outlook, there's 13 metrics or indicators we look at there, it takes 9 different cities to make this hypothetical fastest city, so, we see the opportunity for extraordinary competition. As time goes on, for which cities will continue to be the leaders and continue to rival the legacy leaders in New York, London and Paris.

Like I mentioned earlier, we then took a look back to understand how cities in each of the different regions have performed over time. Chinese cities have grown, have improved faster than cities in any other region in both the Index and the Outlook. The line in red is China. When you look on the side that talks about the index, the Chinese cities have improved 50 percent faster than cities in any other regions. When you look across the outlook it’s even a more aggressive story where the cities in China have been proved by 65% more than half cities in any other region. We see the reason for that as the extraordinary alignment that occurs in China, between the business, government and social activities. That alignment has allowed that cities in China to improve so much faster both in terms of current performance and in the future outlook, because they have a constancy of purpose across multi-dimensions.

Just a few reinforcing perspectives to substantiate that difference and that ability to grow so much faster. As you have seen, the number of global headquarters located in China continues to increase, and China starts to grow its own global corporate leaders. So the number of Chinese companies in the Fortune 100 and the Fortune 500 continue to improve. And importantly, the students who have left China are starting to come back and they're coming back and really augmenting the talent pool that's here. That will allow China to continue to improve. When we do the same analysis on the outlook, and you look at the governance perspective, the ease of doing business in China has made it possible for so many of these global headquarters to be located in China. Importantly, with China's plans to become one of the first commercially deployed 5G network, China will soon have the ability to not only be a leader in manufacturing, but also in services. And the services economy is much bigger than the manufacturing economy.

Lastly, when we look at the performance of Nanjing specifically, Nanjing had a stable performance in our index. It ends it up anywhere maybe between 86 and 88. You can see the various components here and how the city performed across each of the major components of the index. But it's relatively high score and human capital is really holding the key for the future of Nanjing. It’s your people and the extraordinary capability of those people that will power the city going forward. When you look at Nanjing compared to the other cities in China, you can readily see that it's one of the top cities. In this case it performs, on a very competitive basis, in both business activity and human capital.

Lastly, when we do the same analysis, looking at the Global City Outlook. Here you can see that the future really does look like very bright for Nanjing, whereas Nanjing is about around 88 in the Global City Index, on the Global City Outlook. It's in the mid-fifties, so it's really punching above its weight, when you get to looking at the potential and the outlook for the city going forward. Here it's improving almost across all the major dimensions: its innovation performance, its governance and economics are all doing well above average and starting to raise the potential of the city. So with that it'll turn it over.

Kong Qiuyun: Thanks to Mr. Michael Hiales for his speech. The second speaker is Li Xuesong, researcher and vice president of the National Academy of Economic Strategy, Chinese Academy of Social Sciences. We have been all ears to the report release made by the president of the National Academy of Economic Strategy, Chinese Academy of Social Sciences this morning. We also know that the Chinese Academy of Social Sciences, in cooperation with UN - Habitat, has been publishing the Global Urban Competitiveness Report since 2010. The report adopts such systems as environmental indicators and industrial chain indicators in comparing scores of cities around the world. Summaries of the impact on cities and the best practice city have been made for reference. This afternoon, Vice President Li Xuesong will give a speech on optimizing the business environment and promoting high-quality economic development. We welcome President Li.

Speaker: Li Xuesong

Li Xuesong: Distinguished guests and leaders, good afternoon, everyone! The theme of my speech today is: optimizing the business environment and promoting high quality economic development. I would like to briefly talk about four aspects of the problem. First, the current operation of China's economy; second, some of the main problems we face; third, our opportunities; and the fourth is how we optimize the business environment to promote high-quality economic development.

The first issue of the current economic situation. In terms of the real economy, firstly, overall economic growth is still within a reasonable range, but the downward pressure on the economy has been gradually increasing. Because we expect to grow at over 6.5% in the whole year, already a relatively high growth rate if looked from worldwide. But this year, in the quarters past, both investment and consumption growth were gradually moving down. Some of our coastal provinces also have been slowing down, so the downward pressure has continued to increase. The second aspect is that from the employment point of view, the overall employment situation is still relatively good, basically investigated unemployment rate in 5% or even less than 5%. Therefore, employment has not been affected by the Sino-US trade friction, but next year's employment pressure will be revealed, the third aspect is that prices are now relatively stable. The overall consumer price is around 2% or more than 2% level. Although it means that China-US tariff increase will push up prices for oil, as well as for hogs, there will be no significant increase as a result of weakening market demand; also in foreign capital balance, next year, there will be USD 200 billion tariff value added. Now imports and exports have not been significantly affected by Sino-US trade friction. It still maintains a relatively good upside momentum. But the balance of current account is moving steadily, because we may have a surplus of USD 300 billion, but China's trade in services is also 300 billion, the current account income and expenditure is in basic balance. By 2019, the current account trade surplus will decline, the trade deficit in services is likely to rise further. In this way, there is even a current-account deficit in 2019 years, which will put new pressure on the RMB exchange rate. Therefore, generally speaking, from the macroeconomic growth, employment, prices, this year's situation is still good, but there are still some pressures in all aspects.

If, on a financial level, there has been a relatively significant effect on financial deleveraging in the first half of this year, but at the same time we have moved from deleveraging to a period of steady leverage, although financial risks are still not to be underestimated. Our monetary policy is now moving from steady to loose, market interest rates are also lower, but the liquidity of money can be transmitted to small and medium-sized enterprises, this transmission path is subject to some constraints. Because in the commercial bank he is still accustomed to state-owned enterprises, such as real estate, like investment and financing credit, and small and medium-sized enterprises monetary policy transmission approach is also subject to some constraints. At the same time, now the financial risk, the local government investment and financing platform, the residents leverage rate is relatively high. Risks are still not to be underestimated. At a time when the Fed is raising interest rates, every Fed rate hike can create a crisis, and the transmission effect of these risks cannot be underestimated. This is the first aspect I would like to say, the current economic situation in general or smooth operation, but encountered difficulties are also increasing.

The second aspect of the current need to focus on some prominent issues, the focus of attention on the first Sino-US trade friction on China's economic impact uncertainty is significantly increasing. Now the import and export have not quite shown, but the performance of market confidence is very obvious, the stock market expectations are relatively large. And the impact on Industrial Division of Labor and on the industrial chain is relatively large, some manufacturing enterprises and multinational companies in the new investment in the hesitant, whether to expand production in China or transfer to Vietnam or other countries. Therefore, the investment also has a negative impact, the long duration impact on the industrial chain and employment will be more shown. At the same time, Sino-US trade friction will also have an impact on the RMB exchange rate, including some proposed by the United States, some pressure on China is not only on trade. Pressure will be exerted on, technology and other aspects, so our external environment is still not optimistic.

In the second aspect, the problems facing the real economy at present are more prominent, mainly reflected in the difficulties faced by small and medium-sized enterprises and private enterprises. The labor costs of these enterprises continue to rise, including the social security, exchange rate, revenue increase, reformed management oversight transferred totax authorities. We need to significantly lower the exchange rate. The second is enterprise's actual tax burden. We implemented tax reduction measures such as business tax reform, but after business tax reform, the tax base of value-added tax has obviously expanded, coupled with tax increase and strict control, so that the enterprise's sense of tax reduction is not strong, and the enterprise even feels that the effect of our tax reduction is still lower than that of our value-added tax base expansion, which can also be seen from the tax increase. So it is necessary to greatly reduce the value-added tax rate.

The third aspect is the rising cost of financing for small and medium-sized private enterprises. Under our various policies in the first half of this year, especially under the strong financial supervision, some channel businesses are blocked and some small and medium-sized enterprises rely on channel businesses to finance, so some well-run private enterprises are facing a cliff-falling narrowing of financing. Therefore, some listed companies that once have better products have recently felt that the capital chain was broken and the situation more difficult. Coupled with the drop in stock market prices, many listed companies have a higher pledge of equity, resulting in forced liquidation by financial institutions and securities companies, aggravating the situation of capital market decline. Outside is the increase in the price of raw materials for enterprises, that is, the increase in the price of raw materials upstream has squeezed the profit margin of enterprises. This is the second problem, that is, the difficulties of the whole current economy.

The third is that there are still great opportunities for China's economy at present. The opportunity is that China's economic development potential is still huge. Our current difficulties and problems need to be seen from a longer-term perspective or a moving one. Our development potential is manifested in several aspects: First, China's huge middle-income group is rising and the market demand is very large. Mayor Lan talked about the development of urbanization and the development of innovation this morning. In fact, many of our big cities are now in traffic jam. There is still a huge demand for infrastructure construction in this area, and our supply has not yet met such demand. In addition, the aging population will also create demand. And the high-tech industry cannot meet the demand. Nanjing will implement the “121 strategy”, which is also to provide a solution for supply. There is a huge demand for how to meet the shortage of technology supply. In addition, there is a great demand for green development. Therefore, we need to speed up the construction of a modern economic system regardless of industrialization, informatization, marketization and all potential.

The fourth question is about how we should optimize the business environment and promote the high-quality development of China's economy. At present, we have to prepare for the long-term and complicated Sino - US trade war. For that, we need to look back on the 30 years of the Japan-US trade war, which lasted from the 1960s to the late 1980s, and finally defeated Japan through the financial war. It was also a commodity trade war at the beginning and a trade war between different industries in the 1960s and 1980s. Because, faced with Japan catching up with the United States, we should be prepared. As there are negotiations and talks in Japan-U.S trade war, there will be in between China and the United States. But the general trend of the situations will become increasingly severe.

In recent years, China's business environment has continued to improve. However, there is still a huge room for improvement, which is also an inherent requirement for promoting high-quality development. According to the World Bank's Business Environment Report, China's business environment ranks 78th among the 190 economies in the world and is only at a medium level in the world, so we have a huge room for improvement. Our business environment of 78th is not commensurate with our position as the world's second largest economy. We are not only behind the top 10 economies like South Korea, Singapore, Hong Kong(China) but also behind Mauritius's business environment. For example, our enterprises have a heavy tax burden, public services have weak links, and intellectual property protection needs to be strengthened. For these issues, we should adhere to international standards, adhere to problem - oriented, demand-oriented and effect - oriented, take the promotion of the business environment as the starting point, and take the feelings of the market players as the evaluation criteria, so as to accelerate the creation of a business environment that is both internal and external and has international competitiveness. It is also an important aspect of enhancing the competitiveness of cities.

To improve the business environment group is mainly to improve the relationship between the government and the market, to reduce direct government intervention in the market, to liberate micro - subjects, to improve the efficiency of government services, to minimize the burden on enterprises and to continuously stimulate market vitality and social creativity. At the meeting of the Political Bureau on July 31 this year, it was proposed to stabilize employment, finance, foreign trade, foreign investment, investment and expectations in response to changes in the external environment. At present, it is a priority to stabilize employment and appropriately attenuate the overemphasis on GDP growth numbers. As long as there is no major problem in employment, it does not matter if the GDP target can be lower. We can focus on promoting reform and opening up, improving the business environment, improving the business environment, improving labor productivity and total factor productivity, and promoting high-quality economic development. Recently, a report said that Japan has always felt the challenge of population aging is big. But the report said that Japan's labor productivity growth has reached the highest level in the seventh country in the past four years, surpassing that of the United States and Britain. Therefore, the key driving factor for Japan to improve labor productivity is an interaction between labor and machines, artificial intelligence and robot planning and related automation technologies, fundamentally changing the nature of manufacturing not only in Japan but also around the world. Japan has long been a leader in factory automation, especially in the fields of automobiles and capital goods. These advantages of Japan need to be learned by China and the world.

Therefore, we just need to stabilize employment, vigorously improve the business environment, and to improve the business environment. The first is better delegation management and service-plus-market reform. Over the past few years, we have significantly reduced the approval items, promote the IPO reform to achieve positive results. Yet, the enterprise employment costs rise, tax burden, financing difficulty still are the impact factors. That’s why the sense of obtainment to enterprise should better be used as the baton of the business environment. In addition, we should continue to relax market access, vigorously breaking down barriers, and further relaxing the market access of education, culture and health care, all of which are with strong and higher demand among our people. Yet, such demands are to be sufficiently met. That’s why we need to vigorously break down market access barriers for science, education, culture and health sectors, to strengthen their docking with the international market.

The second aspect focuses on improving the property right system and the factor marketization allocation to accelerate the institutional reform. December this year will witness the celebration and commemoration conference of the 40 anniversary of reform and opening up. It will be an opportunity to introduce some substantial reform initiatives, especially in the reform of state-owned enterprises and the fair playing field of private enterprise, adopting neutral principles for reform and equally treating private enterprises and foreign enterprises. There are still unfair treatment to entities of different ownership in government procurement, science and technology projects, target standard setting and other aspects. Some monopolistic industries for their own interests are still resistant and reject competition. Private enterprises cannot enjoy tax, finance, talent and other policies fairly. The important position of private enterprises is self-evident to everyone. That’s why in this regard, we need to reform in the basic aspects. This effort must be significantly increased.

The third aspect is our industrial policy needs to be transformed into technology areas such as education and financing, rather than subsidizing specific industries, especially the backward capacity and industry. Industrial policies need to be selected as transferring to functional industrial policies. In the past, policies are made for specific industries and territories, etc. Such kind of policies cannot align to our own development needs. Instead, they often become easy targets of some developed countries in finger-pointing China for government’s market intervention. Therefore, we want to change industrial policy, from supporting specific industries to supporting specific functions. That is to say, by enhancing innovation ability, shoring up weakness, and promoting green development, we can implement specific industrial policy. But this industrial policy is not for specific industries, specific enterprises, specific areas. It is for the function. R&D intensity, safety, energy efficiency, pollution emissions can be used as the basis for the implementation of industrial policy. We need to improve policy inclusiveness and fairness. Regardless of traditional industries or emerging industries, private enterprise or state-owned enterprise, domestic enterprise or foreign company, it should enjoy equal enjoyment of industrial policy when it meets the standards. In addition, industrial organization policy should be carried out toward the anti-monopoly and anti-improper transformation. It should be transformed into innovation policy.

The fourth aspect is to create a business environment and optimize the business environment. It is ultimately up to the market to speed up the upgrading of technological capabilities, foster new momentum of economic growth, create a free environment in the market-oriented field, encourage trial and exploration. As a big country, China has enough diversity and activity in innovation and entrepreneurship, so successful enterprises will stand out. The government should play its role in the field when market fails, improve the allocation of financial science and technology funds, increase investment in human capital, improve performance evaluation and supervision and auditing, deepen the reform of state-owned enterprises and scientific research institutes, and make this innovative and dynamic splash out. At the same time, to speed up the protection of intellectual property rights and activate the intellectual property market are not only our own need, but also an area where developed countries keep putting pressure on us.

The fifth aspect is to build a higher-level and higher-quality market economy and an open system. It is the 40th anniversary of our current reform and opening up. We want to expand the opening up. What kind of opening up do we want to expand? In my opinion, especially the expansion of trade and investment liberalization, even though financial liberalization still requires some extra caution. Because we may have to control the pace of financial liberalization and prevent international financial shocks, trade liberalization and investment liberalization should be greatly relaxed. Recently, BMW increased its investment in Shenyang FAW from less than 50 % to 75 % and German BASF also increased its investment in China, which shows that China's market potential still has a great advantage in attracting foreign investment. China surpassed the US in attracting foreign investment in the first half of this year, and the US dropped 70 % at the same time. Trump claimed that the return of funds to the US but only to be disputed to see the opposite outcome. China's market advantage is still very great, and we have a great potential to open up more. At the same time, we should speed up the promotion of regional cooperation. Japan expanded its joint venture with China upon the Japan-US trade war. It expanded exchanges between China and Russia and resolved the impact of the Japan-US trade war.

The sixth aspect is that we should curb the rapid rise of house prices and better solve the housing problem of the citizens. We should take the lession of the Japan-US trade war, prevent currency drain and deal with the decline in foreign demand caused by Sino-US trade conflicts. Trade war will inevitably hit foreign demand. And to expand domestic demand will easily spawn a financial bubble. The Japan-US trade war broke out after the Plaza Accord was signed. It was a time when Japan's domestic demand was sluggish after 1985 and too much liquidity released into the market. We need to pay special attention to this. On the Political Bureau meeting summoned on July 31 of this year, it was explicitly proposed to curb the surging house prices. When the market interest rate starts to drop, we should insisted on cracking down speculation on housing products and support real estate companies cover market demand through new building and other ways. We need to effectively curb the rising house price and promote the steady development of real estate. In the context of the Sino-US trade war, we have short-term influence and we need to make long-term preparations. However, China's medium and long-term potential remains huge. As long as our policies are properly used, the business environment is constantly optimized, and the high-quality development of the economy is constantly promoted, we can change the external pressure into the driving force, and promote the faster and high-quality development of China's economy.

That's all I have to say, thank you!

Speaker: Ben Derudder

Good afternoon. I'm happy to be back in Nanjing. I have been here a couple of times and it has been a while. It's always good to be back. Now what I would like to do is to introduce some of the backgrounds of our analysis which has been introduced and that actually compliments some of Peter’s talk. Actually I will be giving some of the insight of the data that Peter has used as an evidential base in his talk. And the rankings we produce actually compliment some of the rankings that have been talking about. So the Global Urban Competitiveness Report, also the one released by A.T. Kearney, for instance, those kinds of rankings, we try to compliment them. We try to compliment them by developing what we call a relational or a network perspective. So, really important in my title is the word “Network”. And what that means is we have a very specific and complimentary focus in the sense that we focus on where cities are connected. So we're not going to sum up how many corporations are listed in the cities. What the quality of living in that city that's clearly very important and complementary to what we do, but what we do is really looking at where cities are connected. So to what degree is Nanjing connected with New York, London and so on. That is the focus of much of our research.

And what I would like to do today is to introduce the background of that research and focus on some of the research for the leading cities in the world, and also Chinese cities and being focused to the position of Nanjing in that. So the pursuit of a world or a global city is a high on the agenda worldwide and particularly so in China. So these are three examples which don't have anything to do with Nanjing. But if you look at Shanghai, Beijing, Chengdu and a couple of other cities, you see an allusion to a global dimension whether it is global, world or international. There’s an allusion to a city having a functional importance beyond its national borders. Now, that means a lot of different things, but what we do is actually looking at that international world or global dimension by looking at where the cities are networked. Then we do that systematically. So we don't use it case by case, city by city, but we try to develop a systematic indicator of where key cities in the world are connected.

So what I will do is to summarize some of our work that has been summarized in these books, so we've got a couple of books on this topic and the key book perhaps is in the middle here-World City Network, The Global Urban Analysis. And that's a key book because it's kind of summarizes our data approach and some of our findings, and the book you see to the right is actually the Chinese translation of that book. And I will use some of that work today to highlight Nanjing’s position in that world city network. So a little bit of conceptualization of methodology, I'm not going to be too theory-heavy, but I need to explain, at least a little bit, where our data and where our rankings come from because these are rooted in the concepts and theories about what drives the global connections of cities. So at GaWC, at our research group, we specifically focus, as I mentioned, on mapping and understanding global intercity relations. And the starting point we take in our research is the research of Saskia Sassen’s well-known research where she puts forward that global cities are essentially knowledge factories. Obviously they're much more than that, but one of the key elements of what makes a city global is that's a knowledge factory. This is where the knowledge is made. And who makes that knowledge? Actually, people are doing that, but much of the knowledge that is made by these people is pursued in the context of what we call advanced producer services. So advanced producer services also are commonly called knowledge intensive business services. These are financial and business services in advertising, law, accountancy, management consultancy, finance and they use cities as a basing point, as a platform to gather and disseminate knowledge on how to do business. So we've seen a ranking put forward by A.T. Kearney for instance, but A.T. Kearney itself is also a knowledge producer. So the ranking they produce is actually knowledge product about how our cities, are potential investment, locations, are potential innovation locations. So it's actually these firms in and out of themselves that use the city knowledge into city innovation, into city people being attracted to the city. These firms have actually produced the knowledge. There are many other institutions that produce knowledge: universities, other companies. But we use these producer services firms as some sort of indicator, because they've got all sorts of connections in the urban economy. They are used by other agents in that economy as the economy globalizes. So we use them as a very specific in a portion of the economy. It's only a portion of the economy. But the crucial portion of the economy as the city globalizes that will be our focus. The most advanced, the most specialized, and the most globalized of these firms have a network of offices centered on major cities, and we'll use that information to look at where cities are connected.

So once again, A.T. Kearney itself serves as an example. We saw a global map on where they were located and actually that location choice in different cities is a reflection on how important these cities are as cities globalize. So this would be a good example. This is a picture I took at the Amsterdam airport about a decade ago and it's an archetypical of producer services from Deloitte and the advertisement set out to people at the airport in basically all major cities in the world will have one thing in common and what do they have in common. They do have in common that Deloitte is there. Of course, this is a specific example but what we will do here is to look at the many Deloitte braches, Deloitte, A.T. Kearney, Bank of China, all the key producer services and firms. And we look at where they locate and how they organize their office networks; somehow deriving information on where cities are connected. Now this is location information. Deloitte in Amsterdam, Deloitte in New York, but what we're interested in, of course, is connections. So we need to do something to derive connections from location information and so there are two formulas on this slide. This explains you how we get from location information to how cities are connected. So how do we do this? Let me explain this methodology in very two different simple terms.

Connectivity is assessed based on co-presence of firms in cities. What does that mean? Well, if A.T. Kearney has a location in Beijing and shanghai, that opens up the opportunity to interact, to ask each other for advice, capital, people, information. So what we will do is to look at a shared presence of firms to posit the potential of connectivity. So actually our measures won't necessarily reflect real productivity. They reflect the potential of cities to interact based on firms co-presence. For Shanghai, Beijing, as urban economy starts to interact, because a key service provider like Deloitte or A.T. Kearney will have an office in both locations and that opens up the potential for interaction. Once again, that's idiosyncratic, that’s specific, but the idea is if you do that for a lot of different cities and a lot of different firms, patterns will start to emerge. In practice, how do we do this, while we do a little bit more than simply assessing locations, we assess the importance of locations as well. And we do that through a measure we called service value. In the service value as a standardized measure of importance of a city to affirm, and we need to standardize it to be able to compare different office networks because Deloitte, A.T. Kearney, Bank of China have different ways of organizing their hierarchies, their networks, and we need to standardize if we want to add them up. And how we do this? We will standardize them between zero and five. Zero is simple; a firm has no location in the city. Five means headquarters. So the global headquarters of a firm is located in that city. And everything in-between, some sort of ordinal measure: with “4” meaning a headquarter for Asia Pacific for instance; “3” meaning a national headquarter; “2” meaning a typical office. So for each firm, each city, we have an assessment of the importance of that firm to a city. Then we later talk a little bit about how we select cities and firms but for each city-firm pair, this is how we're going to do that.

Now the next and final phase is then how to get to the connectivity. Well, we use a very simple interaction model. CDC means city dyad connectivity so that the relation between two cities A and I for firm J. And that's simply multiplying the service value. So if you have a global headquarter in London, an original headquarters in New York, it's five times and the interaction potential is twenty. The twenty doesn't mean anything in office itself. It's an ordinal measure. It means it's bigger than fifteen and smaller than twenty five. And we're going to aggregate it. Then the final measured global network one activity, G and C mean the global network connectivity and that simply adds up all conections of a city for all firms “J” and across all cities “I”. So what is the productivity of Nanjing is simply the connectivity between Nanjing and all the other major cities in the world for one firm, and then adding once again all the connectivity between Nanjing and all the other cities for all of the other firms. You aggregate that, you standardize that and you get a measure of how well-integrated the city is in the office networks of globalized service firms. Now we have much more measures than these. I'm not going to point to the formulas and the details, but what you can do is not simply looking at global network connectivity.

You can do as Peter has done, looking at the location strategies for different kinds of firms, where is law, where is accountancy, how well are you connected to China, how well are you connected to the top ten cities, how well are you connected to New York and London, how does this connectivity, this GNC change over time. So there are more measures that can be drawn from this. This is the basic approach, looking at co-location of firms in cities, standardizing them and deriving information on where they're connected. So before running you to some of the results we have for the world, China and Nanjing, one final thing needs to be explained: where you get this data? Because doing this, you need to have those service values, the importance of firms to cities. Now, how did we do this? As mentioned in the introduction, we have been doing this a couple of times since the year 2000, changing a little bit but the overall approach staying the same. And in most of my results, I will focus on 2016. We have a new data set for 2018, but we still have to make some of the calculations. So I can't go into much detail now. I'll give you a glimpse later on, but much of what I'm talking about will be 2016. So we select 707 major cities. What does a major city imply? Well, every city that has been in our data in the past is still there, every city with a certain population size will be there, so every city with more than 1,5 million inhabitants will be there. We don't assume that they are well connected and we see if that are well connected. And we chose 175 major firms in 5 sectors: major law firms, major banks and major management consultancy firms. We look at where they are located. And then finally how did we get data? You've got 175 firms, 707 cities. We analyze the corporate websites. Because in this case, unlike with manufacturing, it's clear where they are because these firms tend to show off. If you have seen for a couple of those companies, we've seen for Deloitte, we've seen it for A.T. Kearney, they like to emphasize where they are. So mostly on the website, something called an office locator or a global map that gives you information on which cities they are in, which cities they are not in, and also some extra information on where are the global headquarters, where the regional headquarters, or for instance, for a law firm what level of expertise do they have, how many partners do they have. So that's circumstantial evidence to assign service values. So for each of the 175 firms, we look whether they're in the 707 cities, we sign some sort of standardized service value, we put that into our model and we have all sorts of connectivity measures, global network connectivity, regional network connectivity and so on. This is how the model works, this is some of the maps Peter has shown are derived from this kind of connectivity information.

And what I would like to do in the next ten minutes or so is to give you some glimpses into some of our results. Perhaps the most obvious thing to ask here is: what are the most connected cities? So these are the twenty most connected cities in 2016. Once again, look at the measure. This is global network connectivity. The number 100 doesn't mean anything, just means the most connected city. And all of the other connectivity measures are basically percentages of London. So what's the percentage of connectivity compared to London. So, one of the consistent findings we've had over the years and once again in 2016 is that London and New York are by far the most connected cities. So there's NO.3, Singapore. In the previous data gathering, it was sometimes Hong Kong. So Singapore and Hong Kong are quite close. But real story at APAC cities network is that London and New York are far ahead. So NO.3 comes quite far behind. What you did see is a mixture of mostly European, North American and Pacific Asian cities so the core of the global economy, with some other cities interspersed. So they got Mexico city for instance there, you also have Dubai and Mumbai but the majority of cities come from either Asia Pacific, North America and Europe. So beyond London and New York, we have Singapore, Hong Kong, Paris, and also as we will see the rankings have been changing. Also Chinese cities are clearly moving up. Clearly we have Hong Kong and Taipei, but cities like Shanghai and Beijing for instance are steadily appearing in the top ten now. What does this mean for a Chinese city? Not unlike some of the other rankings, we've seen Nanjing ranks around tenth. Ranking tends to be anywhere between eight, nine and ten because some of these connectivity measures are really close. So a small productivity change can imply a change in ranking. What we see for China is not unlike New York and London. They are really the three cities heading the rankings, so you got Hong Kong as the most connected city, closely followed by Beijing and Shanghai. And I compare them to New York and London in this sense that they are quite far ahead of the other cities in China. If you look at the first and foremost connected city which is of course a special case with Taipei, you go beyond that you can look at Guangzhou and Shenzhen. Those cities are quite far ahead, so Beijing, Shanghai and Hong Kong are really the gateways between the global economy and the rest of China. Many other cities are quite well connected by now, but the gap is quite sizable. So what you didn't see beyond the special case of Taipei is that it's above all Pearl River Delta cities with Guangzhou and Shenzhen, and then it's quite a scattered pattern with Chengdu, Tianjin and then as the first of the rest comes Nanjing. Alongside a couple of other cities in the region, it's on par with Hangzhou but quite far ahead compared to Suzhou. So that's the Chinese cities in the world city network.

What are the most connected cities in the most recent rankings? That’s some of the most recent research. What has happened in the last two years? The main story there basically is that the ranking order of Chinese cities hasn't changed. That's one thing you wouldn't expect in two years. You can't expect a major overturn in which cities in China are more and less connected. But there's a major shift nonetheless in how well connected they are. So, if you would look at Nanjing in 2018, it has a connectivity of more than 30 while in 2016 that was still in the twenties. The basic story here is actually that most Chinese connected cities, all Chinese cities actually have become much more connected and Nanjing is a case in point. It has been rising not in ranking, but in connectivity on par with some of the other Chinese cities. Now as mentioned in our approach, there is much more you can do than simply deriving a ranking of global network connectivity. What this ranking shows to you is where a city is connected. Because Nanjing is clearly connected to other cities globally, so what are the key connections? I can't explain the methodology in detail. But what you see for instance is that this ranking tends to be very regional. If you look at New York which is clearly a world city, its five most important business connections in producer service firms are actually with American cities. So its five most important connections are Washington, Boston, London (something Peter talked about London seems to be a very U.S. city in terms of its business connections), San Francisco and Los Angeles. So, London is a very clear-cut world city, it has connections with New York and Washington, but also with city like Boston and with cities like Paris and Hong Kong. This regionality reemerges if you focus on Chinese cities. So Nanjing, for instance, four of its five major business connections are with other Chinese cities, with Chengdu, Shenzhen, Guangzhou and Beijing, but also quite specifically with Luxembourg, which probably tells you something about an international financial center being housed. There is a lot of banking leading to financial services companies interlocking those cities. But what you see is that Nanjing is not only slightly less well-connected than cities like Shanghai and Beijing, it's also more circumscribed. Shanghai and Beijing have connections well beyond their borders. They are also well connected with Singapore, New York and London. And these are the kinds of names you don't see popping up with Nanjing. This is not to say Nanjing is not connected to New York, not connected to London. It most certainly is. But it's less well-connected than some of those other major global cities and some of the major cities in China. Not only less well-connected, it also has less strong connections with some of the key cities.

If you look at the overall geography of connections, this is something you can do right here. So this is a radar diagram. This radar diagram basically needs to be interpreted like this. The further out the line is, the more connected this city to cities in that particular region. If you take Nanjing to the right, you will see that it's actually quite well connected to Pacific Asia. You see, in the radar diagram, a spike going to Pacific Asia. What it means is that its global connectivity is basically quite regional. Most of its so-called global network connectivity is actually derived from being connected to other Chinese cities and to other cities in Pacific Asia. If you compare that to London and New York for instance, the story here is that you don't really see a pattern. And the fact that you don't really see a pattern simply means that it's well connected to all other world regions. So once again the story here is that Nanjing is not only slightly less well-connected, it's also much more regionally focused, less global in the geography of its connections. Beijing and Shanghai also have this dominance of Pacific Asian connections, but slightly less so than Nanjing. So once again, compared to the previous slide, Nanjing is slightly less well-connected than Shanghai and Beijing, and is also much more regionally circumscribed in its connections.

The final rankings I want to show you would be connectivity change. If you compare 2010 with 2016, you see that some cities have become much more connected than other cities. So this is the global ranking, and the measure of change. I will not go into any details. It's standardized change. It’s standard deviation. It implies that a connectivity change of two means, exceptional connectivity change compared to all of the other cities in the distribution. What you see here is a broader shift in the global economy in the sense that you see hardly any or no cities at all from Europe or North America, such cities in the so-called Global South and in China. If you see a city like Chengdu as a third most global connectivity gains between 2000 and 2016. And city scattered all across the world actually gains in connectivity. I'm not sure if this is the correct language to use but you might talk about catching up in terms of becoming more connected. You see Chinese cities scattered throughout this ranking so what does this produce if we focus on Chinese cities? The basic story here is if you compare 2000 with 2016, all Chinese cities have become much more connected. There's not a single Chinese city that has become less connected. They all had boosted connectivity gains, but some cities clearly have become extra connected compared to the other Chinese cities. Chengdu clearly standing out here. And Nanjing is being located in the middle. It means Nanjing has been gaining quite a lot of connectivity over the last couple of years, but actually on par with the other Chinese cities. It's not exceptional compared to the other Chinese cities in terms of the connectivity changes it has boosted. As mentioned, some new findings for 2018, you see Nanjing’s position is quite systematically the same over years. So this is 2000 to 2018. It roughly ranked tenth, but you see that nonetheless its productivity has been gaining over the years from13.5 to 30.5, but that's a change on par with the rest of China.

To sum up, what are some of the key findings of our research on China in general and Nanjing in particular? Nanjing is well connected in the world city network. It ranks systematically around tenth among Chinese cities. It has been boosting consistent connectivity gains, and is in parallel with some of the other Chinese cities. One of the things we have been finding is that the connectivity gap between Nanjing and Shanghai has been declining. So the Yangtze River Delta in general, it's not only a finding for Nanjing but also for the other cities in the region. This is something mentioned by the Mayor this morning. The difference between Shanghai and some of the other cities in the delta has been declining. This suggests that it becomes a more integrated city region, but still the question becomes to what degree Shanghai is actually taking some of the potential connectivity away from those cities. Because many of the global firms tend to locate in Shanghai and use that office to operate in the entire region. The idea can, of course be to what extent is Shanghai taking away some of the connectivity of Nanjing, or the other way around, in what sense are the cities actually creating something more by cooperating in the office networks of those service firms. It's not well connected to some of the other major Chinese world cities, and its connectivity is also much more regionally circumscribed in the sense that much of the connectivity of Nanjing is with Pacific Asia and China. There is much more than can be said, but that gives you a brief introduction to how we approach city connectivity and how Nanjing fits into the broader story. Thanks a lot.

Kong Qiuyun: Thank you, Mr. Ben Derudder. The fourth speaker is Mr. Zeng Zhihua, from the World Bank and Mr. Zeng is a senior economist. Please welcome Mr. Zeng Zhihua to give us a speech!

Speaker- Zeng Zhihua

Zeng Zhihua: Ladies and gentlemen, good afternoon, and it is a great honor to be here to focus on the issue of our city at the Global Urban Forum. I have been mainly addressing this issue from the perspective of the global value chain, and many experts have also talked to you about the corresponding ranking of cities in the world. I will share with you how to make our cities more competitive from an economic point of view.

Because most of the audience is Chinese, I now want to speak in Chinese. My PPT is in English. I mainly focus on five aspects. The first is what city competitiveness is; Second, let's look at the model we use to measure a city's competitiveness. I think this framework is very important. There are different organizations outside China that use different methods to measure the city's competitiveness, but on the whole, they focus on four aspects. Looking at the relationship between cities and global value chains, we are talking about the internationalization of cities and the competitiveness of cities today. In fact, an important aspect is whether there is an internationalized value chain and industries. It’s a very important aspect. Let's look at Industrial 4.0. It has actually changed our industrial structure with the new technology revolution. As an emerging city and a second-mover city, how to seize this opportunity and strongly reflect the city's competitiveness? Later in my presentation, I'll talk about how Nanjing should proceed.

By definition, what is a city? At it needs to have least 150,000 people living in it to be qualified as a city. What is a medium-sized city? There should be about 5 million to 10 million people in a medium-sized city. Mega - cities will have more than 10 million people. So, anything with the population size between 150,000 to 1 million can only be deemed as small cities. Therefore, cities are much diversified in their sizes. Generally speaking, we define urban competitiveness in four aspects: a regulatory framework and a legal system, this is one aspect and a soft thing. The second is your system construction, there are also enforcement agencies and so on, all of which are called systems. The third is hardware and infrastructure. Many guests talked about connectivity, this is quite important from the perspective of infrastructure. The fourth aspect is the connection from the software side. It’s the soft infrastructure, this aspect is also very important.

Let's talk about the first aspect first. Just now we talked about these four aspects. They determine the competitiveness of the city. This first aspect I want to talk about is our policy and regulatory framework. It is about what you want to do to make a city competitive. We know that the first option is fiscal policy: how to use fiscal policy and fiscal revenue to set the competitiveness of a city. The second is the business environment. Today, we talked a lot about business environment, which involves service, personnel, capital. How do they circulate and be allocated into the most effective fields? This is the business environment we talked about. We have a report on the global business environment from the World Bank every year. So apart from the national level, now we start to do the city level, and cities in China are now in great need in this respect, including Beijing, Shanghai and Guangzhou. They all want to entrust the west to do the city business environment, and we are also doing and discussing about such things; The third aspect is foreign economic policy, which determines how you are performing, including international trade, international finance, international value chain, foreign labor, foreign talents, how you deal with them, and how you position yourself as a city. It will then link to foreign policy.

The second aspect is mainly what we call the institutional framework and system, including many aspects. One policy also includes the legal environment, legal system, the relationship between the central and local governments, the relationship between stakeholders, especially between the government and enterprises. Such interaction and cooperation between the public and private sectors is also very important. In other words, personal leadership and the quality of leadership can also determine the direction of the city. Another important thing is whether there is a good vision. A good vision, as a city logo, the logo about yourself, or what is the brand of your city. We know that Beijing is mainly a political and cultural center, Shanghai is a financial center, Wuhan is a silicon valley center, Suzhou now also has high-tech aspects, Hangzhou has its e-commerce. Where is Nanjing positioned? So it is very critical to have a very important position and then build a city brand. The last point is to seize the opportunity. We know a lot about the situation. When we face challenges, the difficult times are also opportunities. To China, sometimes it is both crisis and opportunity. At the beginning, we started the reform and opening-up from Shenzhen, when China was facing economic reform.

The air route, the land route and so on, do not need much elaboration. During such period, they have been doing quite well in China. This index shows that China connectivity is doing quite well. Of all the port cities in the world, the top 10 highest cities in the future and the largest port cities in China are basically along the coast. And these port cities are also in the top 20 in the world. Then China, which we call the largest port in the world in terms of freight volume, accounts for 10 seats. And among the world's top ports, China accounts for 7 seats. So the link is very good. In the field of technological innovation in China, there are also technology diffusion and education training, where are still many gaps within international aspects. There is also an innovative ecosystem, especially for small and medium-sized enterprises, which are very important. In 2010, we had Promoting Innovation Chaired by Chinese Enterprises, and that report is mainly aimed at small and medium-sized enterprises. How to create an environment for them to innovate and start their own businesses is a very important aspect. There is also a culture of entrepreneurship, which is also very important. We know that among the major cities in China, Beijing and Shanghai are actually not the most innovative cities. Instead, so is Shenzhen. Majority of the most innovative enterprises are in Shenzhen. Although there are some in Beijing and Shanghai, Shenzhen still ranks first. Why? Because it firstly evolved from a special zone where people come from all over the world. It’s much like a melting pot. And enterprises here are least threatened. Also, intellectual property rights are protected here, especially today's big data, data storage, application, processing, etc. These aspects entail much intellectual property rights. Therefore, regulatory environment and intellectual property rights protection are very important. Another is livability, especially an indispensable condition for attracting high-end talents. We Chinese cities should do better in that, leaving still room for improvement in some areas. There is also a question of how to create a kind of mutual trust, whether it is good to do business or to get along with people. We should establish a kind of trustworthy relationship. There should be mutual trust between people, including the trust between enterprises and government, enterprises and enterprises, enterprises and banks. The last one is how open you are. China has created many free trade zones. One important purpose is not to increase the degree of openness, but to open free ports. Free ports are a step further than free trade zones, making it easier and more convenient for people, goods and capital to move in tandem.

Cities and global value chains are inseparable. Those cities possessing good infrastructure and good talent reserves can become good conditions for global value chain. At the same time, global value chain is helpful for cities to integrate into the world. They are mutually reinforcing. Just now, I talked about the relationship between cities and value chains, and now I want to talk about the challenges, particularly those brought about by the fourth industrial revolution. The cycles of the first, second and third industrial revolutions are relatively long, some even reaching 100 years. Yet the complexity is relatively less complicated than the fourth industrial revolution. The most important feature of this industrial revolution is that the complexity is much higher than before. The first, second and third cycles are becoming more and more difficult yet getting shorter and shorter. And a new industrial revolution will take place. This was followed by the adoption of machines in the manufacturing industry, that is, artificial intelligence. This is our latest report, the Future of Manufacturing, released six months ago. The use of artificial intelligence robots grew rapidly from 1993 to 2015, especially in the manufacture of such hardware as automobiles, motor vehicles, office supplies, particularly computers and so on. Then, about 3D printing, it’s also widely used in manufacturing industry. From 2013 to 2018, the growth rate exceeded 25 %, and the market will welcome in at least USD 8 billion by 2020. So it comes quite ferocious in momentum.

Based on such a new technological revolution, it is said that the situation in many manufacturing industries has changed greatly. The picture on the right shows you what it is. Some people say it's the New York Stock Exchange. This is not. It’s actually the cockpit of Boeing 747 airplane. It means that there are more than 300 parts in such a complex airport. It takes more than 300 suppliers to print them in 3D at a time. Therefore, the global value chain has changed and more than 300 suppliers can be reduced to only one supplier. This is a disruptive change. The intermediate value chain has become simpler, and it should be said that it is much shorter, and many intermediaries in-between have been removed. As a result, our design is becoming more and more complicated, the time for producing these parts is getting shorter and shorter, and the efficiency improvement also provides an opportunity. This is the competition in our manufacturing industry in the future, not in terms of economies of scale, but in terms of your efficiency and how quickly you can deliver the goods. In addition, how soon can we produce personalized products? This aspect is the core of competitiveness. Therefore, the future manufacturing industry is to say, automated Internet of Things + 3D printing.

Under such circumstances, what kind of competition and what kind of challenges our city faces? It will require better communication facilities, better connectivity, better skills and education systems. There is also a very important and very good legal monitoring framework, especially under the data ecosystem. Because big data is now the new gold, as everyone knows. So how to create a good new ecological environment is very important. There is also the need of intellectual property protection. Today many specialists see intellectual property protection as an important aspect of the future economic and business environment. What does the government do? It needs to create a good business environment to meet the requirements and challenges brought about by such a new technological revolution.

I would like to talk about how Nanjing has become an internationally competitive city. In fact, the most important thing is the urban internationalization in two aspects. One is the internationalization of people, and the second is the internationalization of industry or economic activities. This determines whether a city is truly internationalized and whether it is internationally competitive. For this goal, the following four aspects must be done. One is to identify, for Nanjing, the competitive strength influencing our future development. Based on the current Industry 4.0, what we can do? We must find out our pillar industries and know our comparative advantage or competitive advantage. There is no easy answer, as it requires scientific plans. One big drawback of Chinese cities is that they are very similar. In addition to being similar in appearance, it also has highly homogenous industries. Almost every city or park has new energy vehicles and new energy materials. It is hard to say whether such a competitive development orientation can become something in the future. Not every city can become a place for an automobile industry, e-commerce business, so it is important to find its own position.

The second is to showcase your business environment. Big international company mainly values a city’s business environment, already registered companies, social services, legal monitoring framework, and intellectual property protection and so on. We know that Nanjing has also been applying for the FTZ and have not yet succeeded up to now. But I don't think this will affect your business environment. Maybe this will be the driving force. It is important to make better use of this opportunity to improve the efficiency of your government and your legal regulatory framework so that foreign businesses and foreign-funded enterprises can feel more assured and secured when they come.

I remember when I was in Suzhou, Suzhou Industrial Park was very successful, but the ground for launching the industry was not very good. The story was very touching. Suzhou Management Committee wanted to compete for Siemens with Shanghai at that time. And finally Siemens decided to invest in Suzhou instead of Shanghai. Ultimately, it was the sincerity of Suzhou that moved foreign enterprises into giving them a sense of confidence to settle in Suzhou. At that time, Shanghai felt quite shocked since defeated by Suzhou. There is another example that you have heard of. Chongqing is actually not very good at its starting foundation, and it’s a mountainous city. But when HP finally agreed to invest in Chongqing, the whole mobile phone and computer industry chain followed in. And Chongqing therefore rose up into an international competitive city in that area. Therefore, if you look forward to some industries and believe you will assume advantages, you must really fight for it. You don't have to wait for others to come to you, you need to be proactive.

The third thing we call livability. It is measured by how many green spaces there are in this city. It’s measured by your air quality, whether it is crowded or not, house prices and so on. And another important thing is social medical services, medical education or so. There is also a possibility that everyone doesn't usually speak too much and probably didn't think much - language barrier. To the high-end talents or multinational enterprises around the world, Singapore and Hong Kong are the first choice in Asia. Of course, the two places are good in business environment. But why Tokyo, Seoul and Taipei are not their first choice even when there is not much difference in living conditions? One big reason is language barrier. People say that they speak English when they go to Hong Kong and Singapore. Although it is a very troublesome thing for us to adapt to different driving habit in Hong Kong even if the Zhuhai - Hong Kong - Macao Bridge is now opened, the language advantage wins there. That’s where Nanjing needs to see this point.

The last one is to attach great importance to the higher education system, especially to educational and cultural institutions, and to introduce large numbers of talents. China’s “One Thousand Talent Program” has been quite a big success. But one thing may be a little neglected - the introduction of managerial talents. Because in addition to technical personnel, management personnel are also important in a city, and the two are inseparable. You see, Silicon Valley is not just a gathering place for technical personnel. It is also home to many bankers, strategists and all other talents who know how to manage the incubator places like that. In this respect, I think Nanjing needs to learn from international experience to get improved. Thank you!

Kong Qiuyun: Thank you, Mr. Zeng. Our last speaker in this session is from Cushman & Wakefield. It’s a leading real estate service provider, providing value to customers through real estate solutions from a global perspective. Now let's invite Mr. Adam Rush, senior director of the Strategic Development Advisory Department, Cushman & Wakefield Greater China, to give a speech. Welcome!

Speaker- Adam Rush

Adam Rush: Thank you for Mr. Kong's introduction. Both my Chinese and English are not comparable to those of Mr. Zeng. Considering that today’s audiences are mostly Chinese, I'll try to deliver my presentation in Chinese. Today, my speech has three themes: firstly, what are the standards of international cities in the new era? Today, there are many experts already mentioned such aspects. So I’ll only skim on it. The second level is the case analysis using Boston in the United States as an example to see how an international city should be planned in the new era, how it implements and succeeds. The third part is in light of Nanjing city, I would like to share some of my own suggestions on how Nanjing can become a truly international city.

The first part is about what is the definition of an international city. Many experts have already analyzed it today, so I will only briefly touch upon two points. The first is the level of foreign economy and the level of open communication, the attitudes toward the outbound economic activities. President Li Xuesong also talked about two very important facets of liberalization just now. The first is foreign trade. The second is overseas investment. Therefore, we also use the foreign trade and foreign investment as an analysis of an international standard. We measure the proportion of foreign trade to the GDP of the entire city. It is now one-fifth that of Nanjing, a bit lower than that of Shanghai and Guangzhou. But we can also see that the proportion of GDP of Nanjing's foreign trade is already higher than that of Beijing. In China, if any city can outperform Beijing, it means you are already quite good. On the other hand, if we look at overseas investment, this is the average of overseas investment projects in 2017. Nanjing is not only lower than that of Shanghai, Guangzhou, but is also lower than that of Suzhou. That’s why there is still big room and opportunity for Nanjing to catch up in this regard. In my personal experience, from 2016 to 2018, the highest foreign-funded enterprises from 2008 to the present have entered the , we can seize this time and opportunity to improve an environment for foreign investment in Nanjing.

The second table shows the level of communication open to the outside world. We use four indicators. The locations of large multinational companies. In this regard, Nanjing is already doing well. Among cities in mainland China, Nanjing has already ranked second in the number of the world's Fortune 500 companies. On the other hand, finance is of course very important. Today, there are also many speakers mentioned that there is no international city without financial industry. Nanjing has already been doing quite well, ranking fourth in the entire China. I still feel Nanjing is still a little bit lagging behind in two aspects. The first is international tourism. We can see that Nanjing has only 70,000 international tourists a year, lower than Shanghai and Beijing, and lower than Hangzhou and Chengdu. I don't know if there are anyone of you may come from Chengdu. The slogan of Chengdu is “the headquarters of pandas”. I have been there 100 times and I didn't see one panda. Nanjing is the opposite example in this case. It’s really a unique city of distinctive Chinese characteristics. If you go to many Chinese cities, i.e., Zhengzhou and Shijiazhuang, even including Beijing, besides museums, the Forbidden City and the Summer Palace, you really don't know you are in China. Only with those Chinese buildings, it’s difficult to tell where you are. However, there is really a special feeling in Nanjing. It’s such a special and unique city. You can feel it when you get to this city. So I think it should be Nanjing's advantage. Chengdu selected a very attractive advertisement slogan. But Nanjing is really better. The fourth point is also the number of international conferences. Of course, the number of international conferences cannot be compared with that in Beijing and Shanghai, especially Beijing's political conferences. However, Nanjing only hosts 18 international conferences every year. I think it is really not much. Nanjing has a good foundation, with many large Fortune 500 enterprises and many financial enterprises. In Nanjing, there should be more conferences hosted here.

Secondly, I want to go through a case study to illustrate how Boston became the world's capital of innovation. Why Boston? In addition to its success, geographically speaking, there are many similarities between Boston and Nanjing. If compared to Boston’s positioning in US and Washington to Nanjing’s importance in China Yangtze River Delta, we can see Nanjing and Boston are very similar in the status.

After studying the history of Boston for nearly 20 years, we think that the process of capacity formation can be summarized as 3T. It is tolerance, talent and technology. What does it mean? First, Boston knows how to create a city’s culture. Make it inclusive and enriched with multiple industrial capabilities. When structured with diversified industries and inclusive culture, a city can go to the second step to attract a greater number of talents. And then on the basis of the inclusive culture and talent, it can then be developed into the high-tech, technologically well-known city of Boston that we can see today. The third step is to develop high-tech technology. Many cities now say they want to develop high-tech. But back in 10 years ago, 20 years ago, the city was supported by four major industries: education, tourism, finance and services, new technologies. These four industries were integrated to make such area the land of technology nowadays. And these four will not compete directly with Silicon Valley and New York, and will not compete too directly with New York.

How to implement? How can this process land? I think there are four very important features. The process lasted 15 years all the way from 1991 to 2016. It could be described as the biggest and most important stage of American traffic transformation throughout the history of United States. It built a TOD-based city integrated with public transport, bicycling and pedestrian systems. Now, we could see the results. In Boston, there are over 40% people there using rail transit, and nearly 15% people taking bicycles or walking to work or school. Today, experts from Singapore also mentioned this issue. There are no traffic jams in Singapore. And it took Boston 15 years to solve the traffic problem. Second, Boston has a very rich, biological development policy basis. Besides China, I also visited other developing countries in South Asia or Africa. All these cities will say, we can give what preferential policies, free land, and all types of preferential policies, but Boston does not pay attention to this aspect. It does not value much about free land. This is what it snuffs the other competitors. Thirdly, some experts mentioned that green environmental protection is very good. That protection will absorb excellent talent, attract brand new enterprises, which are also very important. Fourthly, not only the government welcomes talent but also Boston's famous universities and private firms also extend welcoming arms to the new famous business. In this aspect, I think Shenzhen has done very well. The business invitation slogan of Shenzhen goes: “Come to Shenzhen, Join the Big Family”. So I think it is always quite important to have a culture that welcomes talents and enterprises.

Finally, based upon the theoretical analysis or best practices of Boston at all aspects, I always feel like I can reach four conclusions. Conclusion 1 is business and finance. If you want to connect the world and welcome the world's capital, you certainly need a very modern financial services industry, including business ecology. I think Nanjing has done a good job in this respect. Conclusion 2 is that all the factors including government administration, the construction and policy environment, must serve to introduce innovative enterprises. Conclusion 3 is that the cultural industry, that is, the media, innovative enterprises such as art and design, or cultural and creative industries, is also very important for international urban agglomeration. And finally, urban tourism. Why we think tourism is so important? Because we are not talking about the simplest and most basic tourism, we are talking about the concept of “Travel +”. This concept can drive modern service industry enterprises. When tourism ushers in a new situation, so it will bring in investors.

We have made three suggestions for the future development of Nanjing's internationalization. They may not be absolutely right, but at least could give certain hints. The first suggestion is about the internationalization of the transportation system. I also mentioned in the Boston’s case the importance of transportation to the city's reconstruction. Nanjing is still doing well with its 40% share of rail transportation load. But if compared with other important cities in the Asia-Pacific region, such as Tokyo and Shanghai, Nanjing’s number is still relatively low, even if compared to that of Singapore. So we think it is necessary to set up a new transportation channel centered on public transit. The second suggestion is that we also think that low-carbon life, including some high-quality new energy industries, represents innovation, modernization and great attraction to talented people. We agree that it is also very important. The third suggestion is that transportation planning and urban land use planning must be done together. Speaker from Singapore highlighted such importance in his sharing of Singapore’s case this morning.

Then, another suggestion is to build the internationally famous city of culture and tourism. Nanjing already has a good foundation in this regard. This historical and cultural tourism card of Nanjing is already there and does not need to be newly built. Yet, let me tell you my personal story. I went to Zhongshan Mausoleum for the first time in 1993, I also went to Hangzhou West Lake as a backpacker later on. Back in that time in 1993, the tourist experience was not much different in West Lake and Zhongshan Mausoleum. Take a photo and you are ready to leave. Yesterday, I paid my second visit to Zhongshan Mausoleum, bought a ticket, drank a cup of coffee, took a photo and left. However, it is completely different for you to go to the West Lake. The West Lake has completely turned itself into a world-famous ticket-free tourist destination. People feel relaxed and are willing to stay there for half a day or a day, take some meals, chat and stay in a boutique hotel. So I think it can be better to offer richer tourist experience through those tourist attractions.

The third proposal is sustainable development. I think other experts have gone very deep into such topic. We also think that having a smart city is an important foundation for city internationalization. I don't say too much because I think many experts have already made very insightful presentations today.

The fourth suggestion is to say, I remember British expert, Mr. Peter said this morning that if you have unicorns, your industry development plan must have been very unique. That is why we also analyzed the unicorn enterprises of Nanjing. We found that there are three industries top on the list: medical health, new retail and automobile transportation. They are the unique advantages of Nanjing, so our initial suggestion is that these three industries may represent the important development opportunities in Nanjing.

Fifth, I personally think that this point is the most important. You might think the last is the least. I think the most important thing is that the most needed talent in the future city internationalization. Nanjing already has a good foundation. If we look at the number on the right side, it’s the number of college students now, we can see that there are 840,000 college students in Nanjing. This number is already higher than that in Shanghai. Yet, among this big number of college students, only a small portion of them want to stay in Nanjing after graduation. I would assume that some of these 840,000 people, if not all of them, are very excellent talents. If more of these people would decide to stay, Nanjing has to be very successful. Therefore, how to introduce these best talents is a very important issue.

The sixth suggestion is that if we want to strengthen international innovative cities, we need to strengthen international exchanges, including attracting international talents. Therefore, we also saw that in 2017, among the major cities in China, which cities are the most attractive to foreign talents. On this list, Nanjing ranked the 9th. So I made three suggestions to make the city more attractive to foreigners: the first is that it is very important to introduce international organizations and multinational companies in Nanjing. Besides this, now under " the Belt and Road Initiative”, Nanjing enterprises need to use this preferential policy to set up branches or offices outside China. The second point is that it’s necessary to bring in conferences and game events with international influence. It sounds simple but actually not. The third point is to leverage sister city platform to develop some international exchanges and cooperation. That’s all I want to share with you today. Thank you!

Kong Qiuyun: Thank you, Mr. Adam Rush. This is the end of the first session of our forum in the afternoon. The meeting is adjourned for 10 minutes. Let’s resume and go into the next session in 10 minutes.

Session 4 Roundtable Forum on Promoting International Influences of Cities

Host-Zhang Yandong

Zhang Yandong: Let's enter the dialogue phase. First, let's welcome

Zhao Jianying, President and Editor - in - Chief of China Social Sciences Press

Lei Ping, Editor-in-chief of National Business Daily

Zhou Songxin, Editor-in-chief of South China Morning Post Publishing Co., Ltd.

Zhang Jiamin, General Manager of Hong Kong Fengshi Group & Fung Development ( China ) Co., Ltd

Liu Shan, President of Phoenix Institute of Finance and Economics.

Because of the time limited, we may shorten the duration of this panel discussion a bit. Each panelist could start with seven minutes sharing before we enter into deep-dive discussion on specific issues.

The first question is for Mr. Zhao Jianying. Mr. Zhao comes from Social Sciences Publishing House, which has published a lot of content on culture and social sciences in recent years. So Mr. Zhao, from your published content, what aspects do you think we should pay attention to and how do you feel about going global to improve international influence?

Zhao Jianying: Thank you, chair. It's my great honor to attend this meeting today. I also listened to many experts' speeches in the morning and afternoon. It was quite a good learning to me. Because our publishing house has undertaken the Global Urban Competitiveness Report just released by Professor Ni Pengfei. The past two editions of 2016 and 2017 were all published by us. And the Domestic Urban Competitiveness Report was also published by our publishing house. As an academic communication organization, it is a great honor for us to participate in this process. During the publication of the book, we strongly felt that this achievement attracted great attention, from both home and abroad, onto the issues of development and innovation of the city. So we feel that this achievement is very influential as the outcome of think tank.

I may want to make a bit sharing here. I was educated in the study of philosophy. I thought I would be asked to make a speech, until I was told that it was not required. Reflecting on the speaking points by scholars in the morning and afternoon, I would like to talk about two points. Nanjing has developed rapidly in the past two years. I am from Hangzhou. In the Yangtze River Delta,Shanghai, Hangzhou and Nanjing have been developing very fast. Hangzhou has a clear development position of being the capital of leisure and landscape. The tripod economic pillars of the Yangtze River Delta have already taken shape. Nanjing's entry into the top 50 international cities and the top 10 domestic cities are very encouraging. The mayor also said that Nanjing is striving to move towards the goal of becoming a modern international metropolis. I think this goal is very good. At the same time, it has also been said that economic development should keep pace with the development of humanities and spiritual wealth. In the morning, Singapore scholar Mr. Liu Thai Ker said that it is of great value to have the heart of human scholars in city planning. It is the heart of human scholars that shapes the taste ofurban life. At the same time, the brain of scientists is a technical beauty of city planning. And the complex city structure should be lightened up by the brains of scientists. At the same time, the artist's eye is the style of the city. So I think Mr. Liu Thai Ker has made a very good point. He is a master of planning. I want to dwell a bit more on the previous point: the humanities scholar's heart is the value of planning. This also responds to the synchronization of humanities and economic and social development. Going back to Nanjing’s goal in moving towards a modern international metropolis. To enhance the influence of international cities, economic development has also been rapid in the past two years, but Nanjing does need to have more attention onto the first point. For this, I want to share two suggestions.

How to tell a good Nanjing cultural story? How to fully tap into and discover the deep historical cultural resources and profound cultural heritage of Nanjing? I personally feel that Beijing, Xi'An and Nanjingare China’s three greatest historical and cultural cities. They boast big reputation and deep cultural history. In the special case of Nanjing, I did some homework in studying its history. Nanjing is firstly the literature center for the Six Dynasties. From the Six Dynasties all the way to the Jin Dynasties (West Jin and East Jin) and the Northern and Southern Dynasties, it was the period of culture culmination. In Tang and Song dynasties, great intellectuals such as Li Bai, Liu Yuxi, WangAnshi and so on have written a lot of great poems and assays in Nanjing or about Nanjing.There were also other famous people like Cao Xueqinand many masterpieces of literature in modern times. So, Nanjing is indeed a capital of literature. Besides, Nanjing also witnessed the artistic life of many artists like Zhang Daqian and so on. That’s why Nanjing is also the capital of art. So I think these two characteristics are the privileges that other cities do not have. Nanjing is also the land where different cultures and geographies meet and mix. So these characteristics can be distilled out of our Nanjing City, the impact of contemporary culture over the cities. Just now, I was talking with some friends in private. They ask me to say something about Nanjing’scultural image. I think there is some aristocrattemperament in the city of Nanjing. It’s tinged with the elegance of royal family, a kind of mature temperament. At the same time, the city sometime is also sentimentaland somber-toned.I am not sure if it’s right in saying that. The contemporary Nanjing also has a quality that is inclusive, blended and innovative. I think these things, historical and cultural characteristics help to condense the cultural image and cultural temperament. Intuitivesymbolization is very important, it’s to be remembered and recognized and disseminated. To a culture, its symbolization, platformization and rhythmizationare a temporal dimension. Big events conducted every a few years, plus symbolization, platformization and rhythmization. How to innovate in history and culture? I think it’s very important to tell a story about Nanjing culture.

Let along international communication, our domestic people have not yet developed a good knowledge of Nanjing’s advantages, its historical resources and cultural characteristics. I personally like Nanjing very much. As for the example of symbolization, in the morning, mayor calls for building Nanjing into a city of love. That immediately reminded me about the "Rear-View of a Fading Figure" (by Zhu Ziqing). At the train station platform, the father sent off Zhu Ziqing to Beijing. The book made a vivid depiction about the limping fathertrudged up and down. With this scene in mind, I have tears in my eyes. This is what the city of love means. Can it be made the symbol of Nanjing? These cultural resources may be put into a good use.

Second, the contemporary Nanjing cultural Innovation should pay special attention to academic communication. To city’s international influence, besides the economic and mass medias, I think academic communication is also very important. The mass media communication and deep-dive academic dissemination needs to be bonded together. This is what is being done in our publishing house. Just take a few examples, the works of Mr. Ni Pengfei. The book has been translated into English, the world's largest publishing house. China "Belt and Road" mainly cooperated with a British publishing house in running a quarterly magazine. It mainly disseminate the major achievements of China's "Belt and Road", from the contribution of journals in UK. These disseminations are not big-scaled as mass media, but they are strong and important. Therefore, why should Nanjing pay attention to academic communication, because Nanjing is a place with a very large number of universities and scientific research institutions, colleges and universities, i.e.

Nanjing University, Southeast University, Nanjing Normal University, Nanjing University of the Arts and many others. In the study of philosophy, ethics, pedagogy, economics, art and so on, we can create a lot of possibilities. A lot of results can converted into platforms. Of course, the cultural innovation of these academic institutions will play a great role in strengthening the promotion of international influence. That’s my advice to preface much greater ideas. Thanks.

Zhang Yandong: Zhao Zongmade two very good points for Nanjing. From the perspective of history, culture and even art, how to highlight the city image with symbolization and branding. Nanjing is the ancient capital of the Six Dynasties and has a very deep accumulation. Mr. Zhao also talked about the in-depth dissemination of academic knowledge, which is also very important. Because Mr. Zhao have to leave at about16: 30 p.m.Let's ask him another question. You are from Hangzhou and I am from Hangzhou. I just think Hangzhou also has a great historical origin. It is very strong in this regard. What do you think is the difference between Nanjing and Hangzhou?

Zhao Jianying: You got me with this question. In terms of historical and cultural base and inheritance, I think Hangzhou is still largely continued from the line of Southern Song. In light of the complexity and diversity of the history, Hangzhou is no comparable to that of Nanjing. Hangzhou is less equipped with the historical cultural resource, temperament of being a hub city between south and north China and geographical features. Hangzhou is more influenced by Wu and Yue culture. Nanjing has the exquisiteness typical to Wu culture but also has the temperament of being inclusive, generousand chivalrous. Nanjing's future or prospects are still very good.The future or prospect of Nanjing is still very promising. Nanjing is the home to many great colleges and universities, large state-owned enterprises, quickly rising privateenterprises, the big military base such Nanjing Military Region and many other advantages. Thank you.

Zhang Yandong: Thank you very much. Nanjing's accumulation and the positioning of being a north-to-south hub make it much differently from the positioning of Hangzhou. Thank you very much to Mr. Zhao The next question to Mr. Lei. Just now, Mr. Zhao also mentioned the importance of the dissemination, especially the in-depth academic dissemination. It will be about Nanjing but not limited to Nanjing. It also needs attention to other cities. May I ask Mr. Lei what do you think of the media and the promotion of the city's international image? As for the relationship in this respect, what do you think?

Lei Ping: I want to thank the organizer for inviting me here. Thank you professor Ni Pengfei for sending out the invitation. We are a mass media and we are also a financial professional media. Since the Guangzhou release last year, we have become the Chinese publishing media for the Global Urban Competitiveness Report, so it is a great honor to attend such a forum at the conference site again today. As a mass media and a professional media, I think today's topic should be said are very meaningful. As a media, how do we view the city's international influence? I want to talk about my own views. First, media itself is naturally a very good carrier of communication, so we are now all telling Chinese stories and promote Chinese business well. For city in China, how to tell your own stories?I don't think it is possible without media. Therefore, as an important carrier, the media is naturally a very important carrier of enhancing the influence of city brands and then raising the visibility of the city. At the same time, the media itself is also an agglomerationof resources. He can gather such resources through his own right of voice and influence, up-lifting the popularity of the city. For example, we hold various specialty forums, large and small, every year. Through such forums, we gathered many expertise, academic and enterprise resources. It is also a very good carrier for telling good city stories on the city platform and enhancing the city's influence.

Thirdly, media itself is also a very active subject in a city. Living in the city, whether it is global, such as new york, London, Paris, Tokyo, Shanghai or Beijing, there is a very active financial media. When New York is mentioned, it’s the name of Wall Street Journal that comes into people’s mind. Similarly, it’s FT in the case of London. Those medias are the city's business cards and a convincing logo of the city's cultural soft power. If a city has such an influential media, naturally its story will be disseminated very well. I think the media and the city naturally have very close ties. A city’s administrator should focus on cultivating such a thing. As the media in the financial and economic community, we used to focus on capital market reportwhich is more about the companies. Later, we felt that China's urbanization development, competition between corporates is very intense. The competition between cities is also getting increasinglyfierce. Cities started the talent war last year. In order to retain quality talents, cities chunked out many incentive policies on Hukou and via financial rewards, launching a new round of competition between cities. We also paid close attention to the change of every city’s performance in the report. Since last year, we have set up a special urban report department. We also specially dispatched a reporter to London University College to study this urban plan, sending post-graduate students to study and set up a special urban report departmentwhen they come back to China. At the same time, we also opened a city report column, so as to delivery better story-telling about the city and uplift city’s influence.

To facilitate the dissemination of city’s tory, we have opened a bilingual channel and a client terminal in traditional Chinese to echo the "Belt and Road" initiative. We also launched a client terminal in traditional Chinese for Hong Kong, Macao and Taiwan. It was well received and welcomed. A city needs to maintain a very close relationship with the media. Therefore, as a media, we also hope to help our media and help our city tell their own stories in the process of city development and urbanization. Therefore, I do agree with such a kind of relationship between city and media.

Zhao Jianying: Thank you, Mr. Lei. In fact, the media has a relationship with the city, including the influence of the city's brand. From this, we can see how the media can do something to improve the influence of the city, not only as a carrier but also as a body of the city's development. Let's welcome editor-in-chief of South China Morning Post, Mr. Zhou. Based in Hong Kong, we would invite Mr. Zhou to talk about the competitiveness of Hong Kong and "One Country Two Systems".

Zhou Songxin: Hello, everyone. It's a great pleasure to come to Nanjing. Hong Kong is a very special city in China. What is special is that the core competitiveness of Hong Kong's is based on “One Country Two Systems”. It means that Hong Kong is different from mainland China or other domestic cities. It can play a very special role in Asia. First of all, Hong Kong can enjoy the dividend of China's reform and opening up because of such jurisdiction setup. Then, Hong Kong might have earlier knowledge and faster access to some domestic preferential policies;and thanks to the “One Country Two Systems”, Hong Kong is the most dynamic region in economic development, more dynamic than the Pearl River Delta. In the context of great development for the entire region of greater bay area, Hong Kong can fit very fast into the bay area is now under the big bay area. As being in the same country, Hong Kong does not need to make massive investments on many other things. Singapore spends 10 % of its GDP on national defense. But Hong Kong does not need to do that. And Hong Kong's financial resources can be concentrated on developing cities. Most importantly, being also under the same China, Hong Kong is certainly different from the domestic cities in essence. There is much room of flexibilities underthe “One Country Two Systems”. One thing is the rule of law. Because of the special political structure and historical reasons, the domestic legal system has its own particularity, while Hong Kong's legal system was structured in its years of being the colony to UK. I remember, when I started my career as a reporter, I worked as a court reporter for a year. I felt very shocked. Because only when you were able to audit the court cases hearing every daycan you find out how intricately refined the Hong Kong's legal system will be. It functions like a precision clock and moves onits own logic.Therefore, Hong Kong has its reputation in the international arena. Many so-called arbitration cases will come to Hong Kong. When China proposedthe "Belt and Road" initiative, in fact, the biggest competitiveness, or the greatest business opportunity for China and Hong Kong is to become the arbitration center for the "Belt and Road” initiative. There might not be many companies in Hong Kong planning to made out-bound investment in “Belt and Road” countries. However, many domestic companies want to invest in“Belt and Road” countries. There are more often gaps and differences between the local legal situation and the China domestic legal situation. To everyone, Hong Kong can become a trusted arbitration place.In this way, they can set up joint ventures in Hong Kong and then raise fund. This rule of law is an important part of Hong Kong's core competitiveness.

Second, I think the most important thing is the flow of information. Hong Kong is the most developed place in the world in terms of information flow. First, Hong Kong's Internet and smartphone penetration rate should be top 1 or 2 in the world. Plus, as a Chinese city, Hong Kong boasts unique press and speech freedom. As for the Chinese mainland,as you know, it has its special political environment, political needs and historical reasons. That is to say, our leaders often say that China has 140 million people. If timed by 140 million people,any trifles can become big things.

In many cases, the media also functions as a magnifier of those trifle issues. Therefore, under this framework, in this development stage of China, I believe the censorship of media information will continue for a period of time.However, Hong Kong is different. Hong Kong is a very small place and has a history of free media. Therefore, the information in Hong Kong is extremely developed. What good will it does to the competitiveness of the city?

The first point is that Hong Kong has become an ideal platform for foreigners to understand China because of its advanced information infrastructure. Actually, I regret to say that Hong Kong people unfortunatelydo not know much about mainland China. But there are many Chinese experts in Hong Kong who use Hong Kong as a platform to read， collect and analyze China's development. Many think-tanks are based in Hong Kong. There are 59 formal consulates in Hong Kong. These consulates are actually different from those peers in Guangzhou and Chongqing because they report directly to the foreign ministries in their home countries instead of reporting to the Beijing embassy. One of their important tasks there is to leverage more open environment of Hong Kong to learn about China. They will also hold various seminars in Hong Kong so that investment into mainland China can have a first stop in Hong Kong to learn about China.

The second point is the media or this entry & exit freedom can help Hong Kong attract many first-class talents. Hong Kong is home to eight universities, many of which are quite well-knowninternationally. One of the reasons for this is that such relatively open environment helps universities to attract some well-known scholars and experts to do research there.

Thirdly, this year is the 115th anniversary of South China Morning Post. When it was founded, Qing Dynasty hadn’t come to Hong Kong yet. The biggest readers in the past 115 years were in Hong Kong. However, with the development of the Internet, we have now increased the number of visitors five times compared to two years ago. Hong Kong has only such a large population. The United States is our biggest reader source market in five times. In fact, 30 % of our readers are from the United States and only 20 % is from Hong Kong. Southeast Asia is also the second largest market with almost 30%. For example, the South China Morning Post such as Hong Kong now has media influence not only in Hong Kong, but also in the United States and Southeast Asia. The reason why this can be done is inseparable from “One Country, Two Systems”. Because it has created such a space for the South China Morning Post.

Zhang Yandong: Thank you very much. Mr. Zhou stressed that the competitive advantage of Hong Kong is closely related to the rule of law and the circulation of information and the opening of the media as it helps to boost Hong Kong's competitiveness. At the same time, Mr.Zhou also talked about this conditions not only applied for Hong Kong but also for the United States. Do you think that the mainland is still a little different in this respect due to historical reasons? What good suggestions do you have for mainland cities to enhance their competitiveness?

Zhou Songxin: I think that although there are institutional restrictions, mainland cities still have many options. For example, I have been staying in Shenzhen for some time. I was a reporter of the South China Morning Post to Shenzhen from 2003 to 2005. If compared to itself back then, the Shenzhen nowadays are already dramaticallychanged. What enabled Shenzhen’s change was its vibrant so-called culture of maker. It has gathered a large group of young people in the world, hoping to develop the Shenzhen’s localmobile phone brand through bringing in those high-tech talents. Their team is not only made of people coming from China. Actually, there are people from different countries. Why did they go to Shenzhen, because Shenzhen gives them the opportunity, and the Shenzhen government has done a lot to facilitate their development in Shenzhen. I remember now that it was back in the year of 2000, if you go abroad to make any introduction about Shenzhen, people outside China will not know what city Shenzhen is unless he/she already had direct business relation with Shenzhen. It is already quite different now as many people now know Shenzhen. And Shenzhen is becoming more and more outstanding. There are also many such cities in the Yangtze River Delta. I think the Yangtze River Delta has a greater advantage. Whether it is Hangzhou or Nanjing, they may have a richer and more profound cultural background than other regions in China and more understand Chinese culture. As China's national strength rises, although China is fighting a trade war with the United States, Trump's granddaughter is still learning Chinese. As China's cultural power is rising, the Yangtze River Delta will also rise.

Zhang Yandong: The ecological environment is also very important. Shenzhen and Hangzhou actually still have quite nice ecological environment now, making them not same as the other cities. The following questions are for Mr.Liu, Dean of the Phoenix Institute of Finance and Economics. Considering our topic is about enhancing international influence,do you think it is easy to enhance international influencefor a city?

Liu Shan: Thank you, Host. I find it difficult to enhance the city's international influence. Relying on a localized city will hardly help to enhance the city's international influence. If you want to enhance the city's international influence, the media may not be able to enhance a city's international influence. If you want to enhance the influence, first of all, it has to be a city with potential influence. A few days ago, one of my friends, an American investor, talked about the new phenomenon in the United States. So what did they say when Americans were talking about cities? The United States can be divided into three regions: New York, Silicon Valley and others. That is to say, where is America's most famous place? It's New York and Silicon Valley. From the same economic point of view, what does this mean? A city's international influence has its historical reasons, geographical reasons. It might be determined by its scientific research ability, cultural background and industrial chain distribution. There are hundreds of thousands of cities in the world. How many cities do you manage to know through the media at ordinary times? Probably not much.

We often knowtwo cities most: Beijing and Washington, what are they? They are the international centers of political powers. These two cities are born with international influence already, in international politics and international governance. When it comes to economy, so many cities want to increase their influence. Finance or media, what does our government care about? NewYork is a financial center. The pricing of exchange rate, commodity, and crude oil is done in New York. London is also a foreign exchange trading center. Pricing of insurance is done in London. There are also Chinese cities like Shanghai, Hong Kong and outside China such as Singapore, which are the cities determining the price of elements. Those cities tend to have international influence. What else cities have influence? That is the innovation center such as Silicon Valley. InChina, there are Shenzhenand some special cities known for supplying energy or raw material. For example, the thought of oil reminds the Middle East cities, the thought of copper mines may be Latin America, iron mines may be Australia, and some other important cities are important cities participating in the international division of labor in the industrial chain. There are other cities with unique cultural traditions, such as Vienna, for example, when it comes to art. So if a city wants to have international influence, first of all, it is itself an important node in global economic, cultural and political life. If you are not this node, you cannot have international influence, nor can you enhance the so-called international influence.

So, how can a city have international influence? First of all, I think we should try our best to participate in the international division of labor. In the international industrial chain division of labor, if a Chinese city can occupy a position, it can then become an important and influential city. We have a meeting in Nanjing today. When it comes to Nanjing, it is obviously has less international influential than Beijing, Shanghai, Shenzhen and Hong Kong. But is it possible for Nanjing to increase its influence? Yes, we all know that important economic news this year is that China's chip manufacturing is vulnerable to international control. Nanjing recently attracted China's biggest investment, that is, 200 billion chip investment, because Nanjing has become the node of the important division of labor between China's communications and semiconductors industry. It will not only affect China's semiconductor industry, but also enhance the influence of the city in the process of the world's attention to semiconductors. So, my simple conclusion is that the media can't help you improve your city's influence. He can only help you expand, helping you scale up. The development of a city must rely on its own efforts to improve its popularity and reputation, and more importantly, to enhance its competitiveness. Through your promotion of competitiveness, you will occupy an important position in the global urbanization life, and you will have the possibility of international attention. Then, you can reconsider whether the international influence of the city may be enhanced.

That's all I want to say. Thank you Host.

Zhang Yandong: thank you very much, dean Liu. Youmean that the influence of a city is not only the result of media propaganda. Media only expands one thing, but it does not enhance the influence of a city. What you mean is that, in fact, the media's dissemination, influence and competitiveness are not synchronized concepts. They are not the same concept, and actually have different meanings.

Liu Shan: Yes.

Zhang Yandong: You think it is a very important point to enhance the influence of a city. In another word,a city must participate in the international division of labor and become part of the industrial chain. Or that a city like New York is indispensable in global finance. OrLondon is indispensable in global finance. In fact, it is an improvement in strength that can really enhance the influence. Is that what you mean?

Liu Shan: Yes, from the point of view of several so-called city centers, it is almost impossible for you to become a political power center. There are only Beijing and Washington. And even Moscow is not possible. Brussels is also declining now, because the EU's disintegrated policiescaused many problemsand made EU less likely to become a financial center. Often, it will take a few hundred years of hard work to forge out a few financial centers. Hong Kong and Shenzhen are still trying to become China's financial centers. It will be a little difficult for them to become a global innovation center. In addition to scientific research capabilities, I think there are strong scientific research capabilities in Beijing and Shanghai. But why it’s not them but Shenzhen being crowned as the city of innovation?

It has something to do with its culture, internationalization and inclusiveness. Then from the perspective of other cities, if they want to better integrate into the world and become an attractive city, the most likely way is to actively participate in the international division of labor and become an important link in the whole industrial chain and value chain. The Yangtze River Delta city has its own particularity. Except for Shanghai, we see that the Yangtze River Delta is a cluster of cities different from other cities in China. Cities from elsewhere of China are relatively independent infunction agglomeration. Only the Pearl River Delta and the Yangtze River Delta rely on the development of the city cluster to drive regional development. Therefore, if you want to integrate into the city division of labor system, cities like Nanjing and Hangzhou must join in Shanghai in making one unified city agglomeration so as to acquire more international influence.

Zhang Yandong: Thank you very much. Liu's point of view is very clear. Mr. Lei, what do you think?

Lei Ping: I think I understand what President Liu said just now is that a city's influence is not equal to its popularity. You might be high in popularity and reputation, but the city's power, its decision-making power and influence is often reflected in two aspects.Your power is equivalent to being a political center. And a city’s dominance and influence is reflected in the city’s economic function. In the present society, internet industry values traffic flow. In fact, sometimes, traffic flow can also be power. In internet related business, whoever has bigger traffic and louder voice will for sure acquire some dominant power which I believe can also be converted into influence. The influence of the media on a city is not the main root cause. If a city is lousy, whether it is a political center or not, regardless of having or not having a strong economy, or despite tons of window dressing campaign from the media, it cannot be a central city after is impossible for the media to become a central city. The media can be a plus, which is the work president Liudo for sure. Media can't describe the bad as the good, but we can make the good thing looks even better.

As for the media itself, if you have a very powerful and internationally influential media in the city, it may be able to help the city do better publicity, by leveraging on the traffic flow ofthe media, including the volume of issuance, all of which can also enhance the influence of the city. I think it is not absolutely impossible. They are reciprocal, concomitant or mutually reinforcing to each other.

Zhang Yandong: Thank you very much. We heard the direct response to this question from representatives of Hong Kong. The last question goes to Mr.Zhang. Mr.Zhang, it was mentioned by Mr. Liu a moment ago that a city’s influence can be produced by being involved in the international industrial chain. How would you take this argument? What do you think is the relationship between the influence of the city and the adjustments in the global industrial chain?

Zhang Jiamin: First, I want to thank Dr.Zhang and Professor Ni Pengfei for inviting me. I'm from Fengshi Group. We have 300 companies all over the world. I think a city has a lot to do with the change of industry. So I came to this meeting today and felt that I had learned a lot. I will discuss three main aspects today.

The first one, as Dr. Liu said just now, you need to peruse the relationship betweencity and the development of industrial clusters. Then, secondly, I want to see is the relationship between the future industrial cluster and the city; On the basis of my study, I also hope to put forward seven specific suggestions to increase the influence of the city.

We all know that there are many industrial clusters in the world today. In fact, if we look at the industrial clusters in Asia, it was directly related to the continuous transferring of some industries into different cities. Such transfer was facilitated by the United States after the Second World War. It firstly went to Japan and then to the Four Asian Tigers, rippling through other Asian countries before reaching China mainland. If we look at the mainland of China during this process, we can see that the industrial transfer actually started with a particularly great impact on the layout of processing areas in China. At the beginning, when China's reform and opening-up policy was initiated. We said that his major industrial cluster career was developed in the Pearl River Delta and Yangtze River Delta regions. As time goes, we found that the cost of these two clusterswere also one the rise. More interestingly,these cities are not only a production base but start to acquire some consumption capacity with the increasing incomes. Secondly, if take Shanghai as example for the cities in the Pearl River Delta and Yangtze River Delta. The development trajectory of Shanghai was just like Hong Kong. When the cost is high, it started to transfer the labor-intensive production part to the neighboring regions. It became what we called a place of production service and supply chain management, just like Hong Kong.

This is not only the case in the mainland China, but also in the entire Asia where there started to have a lot of labor divisions. Everyone knows China's trade surplus with US products. However, there is a spread in trade between China and many different Asian countries. They are in the process of industrial chain transfer. Intermediate products were produced in different countries and regions, shipped to China for assembly before they are loaded up the ships to US. So in the process, we can see the impact of this industrial transfer on some cities and their relationship with each other. The development of a city greatly echoes the theme of our conference today-the transfer of industries.

What will the future be like? That’s the second point I want to say today. We found that the world is getting faster. We used to produce in Asia, consume in the United States and the West. Now many middle-class people in Asiahave enormously huge purchasing power. Citiesare connected with new and convenient transportation into the city agglomeration. Therefore, the competition now is not a competition between one country and one country, one city and one city, but a competition between one region and another. Its geographicboundarynow expands to the mature urban agglomeration, including its hinterland. In this case, the region is a market because of its relatively strong purchasing power. It became one single market which is very important. Now the world has transferred from “produced in Asia, consumed in Europe and US”into “globally produced and globally consumed”. Asia, especially the mainland China, has become a consumption center because we have a strong market. Take the mainland of China as an example, you can see that many U.S. enterprises want no trade wars not only from the perspectives of purchasing, but also from the point of being in the same market. It’s is very easy to understand but quite important. In fact, China's current market has important development potential and is the very important core competitiveness. You have a market to move a lot of supplies and many designs. Now there is a market in Asia, and all the parts and components of design will be moved back. So the change of global cities will upgrade the Asian consumer city agglomerations.

The second big change is that there is now a very important source of products in the trade war. A speaker said just now that there are many returns on investment in the mainland. The competition between our two countries is not only a competition in trade but also a competition in overall national strength. We don't know when the next trade war will come when this ongoing one is over. So now many entrepreneurs have to shift production to areas with better trade agreements and lower tariffs with the United States. The global industrial chain is completely reshaped. Sointo the future, it can be seen as a new beginning in the age of quotas 30 years ago. And many people will move out their industries. The network of new industries will be formed around the world. In addition, the Internet of Things now greatly strengthen and sharpens the consumer requests. That’s why the place of production in the future is likely to be a place closely related to the US and European consumer markets faster. Therefore, the second change is that the whole production network will change around the world.

Third, we can see that in the future the cities will become more and more globalized. As we often see, there will be a leader city in many city agglomerations. The center of consumption is also a center of production coordination. In this case, if we look at the mainland China again, we think it will happen very quickly. Many important cities will start to vacant the nests to attract new birds, bringing in more business in high-end technology. As a leader city in urban agglomerations, it is a mustto be ready for competing on the higher value-added. China's development now pays more attention to domestic demand.

Today, I learned a lot about the city related specific domains. The theoretical framework is very good. I think it is very enlightening. I am looking at the scholars who studied the city's competitiveness and put forward several important views. I think it is very appropriate and consistent with the research framework of many scholars, including the local natural resources, its industrial cluster, business environment and the market. I want to make fairly quick points about a city’s influence on the basis of theories and city agglomeration, from the perspective of enterprise.

The first must be to improve communication with other cities in and outside the country. This can be done through advanced communication means, which is very important. The second is easiness, not only the easiness of business environmentof course, but also the easiness of taxation and trade agreements with some advanced developed countries. Thirdly, what kind of industrial cluster isa city agglomeration be built with? The industrial cluster in this city is also very important. Without a comprehensive industrial cluster, a city agglomeration must communicate well with other different urban agglomerations to form a complete industrial cluster. This is very important. So the connection between the industrial clusters to city agglomerations is very important. The fourth thing is that nothing can be born out of thin air. To build a strong industrial cluster, you must start with your natural resources, education and technology. The fifth point, of course, is about the relationship with the government, whether in terms of business procedures, local taxation, IP and fair competition. The sixth, market (environment) is actually particularly important; The seventh is the livable environment, including local living conditions and tourism. All these seven factors added with well-deliver media publicitycan help establish the industrial competitiveness. Thank you.

Zhang Yandong: Mr. Zhang, thank you very much for your speech. I think it is also very enlightening. He stressed that an industrial transfer is a very important factor. From the perspective of industrial transfer, you look at these cities. And then you talk about the future, which is not only the competition between countries or cities, but also the competition between regions and cities. You also talk about the production network, at the global aspect, it’s about the change of leader cities in the global city agglomeration. Finally, you mention seven suggestions: the transportation between a city and an international city, in fact, the basic environment, including facilitation, intra-city industrialization, education and technology, business environment, fair environment, and market environment, and so on. Inspired by this, I can continue to communicate with Mr.Zhang in private. He has made a lot of sense.

Due to the time constraint, we have concluded this dialogue session. Before the end, please ask each of our guests to summarize their understanding of the topic in one sentence.

Lei Ping: The media can play an indispensable role in enhancing a city's competitiveness and influence.

Zhou Songxin: What I want to talk about is a first-class international city must have a first-class international media. A first-class media may not be able to create a first-class city, but their relationship actually complements each other.

Zhang Yandong: Very good.

Zhang Jiamin: The competitiveness of a city cannot be created out of thin air. It must become a cityagglomerationwith the surrounding cities and generate their synergy.

Liu Shan: If the city becomes the best of itself, you will be full of influence and competitiveness.

ZhangYandong: thank you very much. This is the end of our afternoon forum. May I invite you to give our four panelists a little applause? Thank you very much. Thank you all.