PKU Guanghua 19th Annual New Year’s Forum


Peking University, Guanghua School of Management’s 19th Annual New Year’s Forum 

Sunday, December 17, 2017 (Beijing, China)- Peking University, Guanghua School of Management held its annual New Year’s Forum at the Peking University Centennial Hall this past Sunday.

A significant year, 2018 will mark the 40th anniversary of China’s Reform and Opening Up Policy and the 120th anniversary of Peking University. Against this backdrop, the 19th Annual Forum reflected on the rapid economic development and social progress China has achieved since the implementation of the Reform and Opening policy and looked ahead towards the new ideology that will define its future growth.

As Guanghua’s most anticipated annual forum, over 2,000 business leaders, renowned scholars and friends and alumni were in attendance. This report provides a window into the forum, distills its eight core themes and gives commentary on the forums discussions and debates.


The Key Takeaway

*China can no longer depend on the traditional investment mode and now must take a different, more innovative and market-based approach to development. Innovations in science and technology will be new economic drivers in China’s future economic growth. Reforms should focus on shifting towards a more market-based economy and promoting innovation.

?*In order to address the challenges China faces due to globalization, it should create (1) a new investment model, (2) develop its outbound foreign direct investment model and (3) internationalize the RMB.

*In order to solve the contradiction of the global equity debt problem, China should strengthen the source of equity and increase its debt, or in other words, engage in a debt to equity swap. 

*On the micro level, entrepreneurs will drive future economic growth. The government should enact reforms that supports them and provides a more market-based structure.

*The future of service is Internet-based. Firms must have a deep understanding of their industry and offer quality, Internet-based service in order to compete in China’s future economy. The government should enact reforms that supports this future.

*Global sharing-based business models, increased ease of communication and mobile payments will redefine global industries and provide vitality for the Chinese market.


The Morning Session 

The forum’s morning session focused on four core themes: (1) The Global Expansion of Wealth is a Bubble, (2) A New Development Ideology for a New Era, (3) Peking University’s Mission: promoting national development and societal progress, and (4) The Road Ahead: the Path of the Reform & Opening Policy.


Welcome Remarks

HAO Ping, Party Committee Secretary at Peking University, opened up the forum with remarks on the significance of 2018 for China and the university. He also discussed the role that the university will play in China’s new era. HAO said, “2018 is an important year with special significance…this year’s theme ‘New Era, New Ideology’ not only embodies the spirit of the New Year’s Forum, but also China’s future direction.” 

The Global Expansion of Wealth is a Bubble

CHEN Yuan, Vice Chairman of the CPPCC National Committee and the Deputy Director of the China Center for International Economic Exchanges, discussed monetary and financial policy’s role in China’s development and the issues facing the economy in the new era. 

Some of China’s most significant achievements after the Reform and Opening Up policy are a direct result of financial and monetary policy and reforms. In fact, China’s monetary and financial policy has had a significant impact on China’s economic development, international financial status and the internationalization of the RMB.

Now, in this new era, China and countries around the world, are faced with a new problem- the imbalance of share and creditor's rights, which is a global problem that is more prominent in China. A shortage of equity in an economy causes serious issues in terms of economic movement.

We can see that short-term equity will become creditor's right, and long-term creditor's rights will also become equity. This is a process of transformation. CHEN offered a possible solution to the contradiction of the equity debt: strengthen the source of equity and increase the debt, or in other words engage in a debt to equity swap.

Looking towards the future of international development trends, we can see that global wealth, including capital, real estate, land, etc. is expanding rapidly and forming bubbles. This problem must be solved urgently.


A New Development Ideology for a New Era         

Prof. LI Yining, honorary dean at Guanghua and renowned China economist, discussed the issues facing many developing countries. While foreign investment and open markets increased the GDP rate, it has not fundamentally changed the system. Thus, Prof. LI Yining argues that without systematic changes, these countries become stuck in a low-income or middle-income trap.

Why? He argued that leadership in those countries stick to the ‘old path,’ which is insufficient to address social and economic disparity, instead of taking the risks of forging a new development path. This is what he defines as ‘path dependence.’ Prof. LI Yining argues that path dependency is dangerous for developing countries.  

In the case of China, the country can no longer depend on the traditional investment mode and now must take a different, more innovative and market-based approach. However, this is easier said than done. The new development model does not have a defined structure and important reforms must be enacted in order to ensure that businesses are the main drivers of the market, the basis of the new development model.

Further, Prof. LI Yining argues that the reform of the new development model must rely on innovations in science and technology. Innovations in that space can produce new products, as well as increase capacity and functions in the economy.

Reforms cannot be implemented slowly. The economy is moving forward and new firms must compete, at home and abroad, or be eliminated. The transformation in the new economy is about competition. Thus, firms must rely on cultivating talent and increased efficiency in order to forge the new path ahead.


Peking University’s Mission: promoting national development and societal progress

President of Peking University, Prof. LIN Jinhua, looked at ahead at the future of Peking University and the role it will play in the nation’s development.

“Peking University has made significant contributions to the development of China’s economy and the growth of its entrepreneurs,” Prof. LIN Jinhua said. As a world-class institution in China, the university sees its role as an integral part of the nation’s economic and social development and progress.

During the 19th Party Congress, the government defined a clear future- to become a powerful, socialist modern nation by 2035. Against this backdrop, Peking University has also defined its future path- to become one of the world’s top universities by 2035. In order to achieve this, Peking University will need to draw from its advantages, which Prof. LIN defined as: the great rejuvenation of China, open and inclusiveness of the Chinese culture, and China’s significant human resources.


The Road Ahead: the Path of the Reform & Opening Policy

Under the theme, “The Road Ahead,” the speakers discussed three subthemes in the morning session of the forum: (1) Reform of the Economic system: liberating society’s productivity, (2) Economic Reform: promoting market vitality and (3) China’s Entry into the WTO & the Awakening of Internet Consciousness.

Reform of the Economic System: liberating society’s productivity

GAO Shangquan, Former Honorary Chairman of China Society of Economic Reform, and SONG Zhiping discussed the reform of China’s economic system. In their discussion, they emphasized reform as integral to business survival. As SONG Zhiping put it, “the market doesn’t believe in terms, who is the first to reform is the one who will survive.”  

Economic Reform: promoting market vitality

XU Xianping, Counselor of The State Council of the People‘s Republic of China and Distinguished Professor of Practice at Peking University, Guanghua School of Management, CHEN Dongsheng, Chairman and CEO of Taikang Group, and YU Minhong, Chairman and President of New Oriental Education & Technology Group, discussed their entrepreneurial journey. 

XU, in particular, discussed promoting market vitality in the context of local governance. In his former post as the Changsha City Deputy Mayor, he shared four insights from this posting, as they relate to the relationship between business and government: reform is at the core of progress; the cost of reform must be shared; the government must create a market environment; and reformers must have the courage to take risks.

An important element to promoting market vitality also comes from the micro level- entrepreneurs creating new business models, products and services. Their activity spurs economic development and progress. As YU said, “after the Reform and Opening Up policy, the government allowed people to explore, which stimulated market vitality. In the future, the government must promote entrepreneurs, as they are the engine for future growth.”

China’s Entry into the WTO & the Awakening of Internet Consciousness

In order for firms to compete in the new era, WANG Jianzhou, President of China's Listed Companies Association, Former Chairman of China Mobile, argued that they must have confidence. This confidence, he believes, comes from a deep understanding of their respective industry and engaging in forward-thinking strategic decision-making. When asked about the future of the telecommunications industry, WANG emphasized open communication. The distance between people will become less and less, as the ease and diversification of communication methods continues to develop.

SUN Taoran, Chairman of Lacarra Group, was similarly positive about the growth and development of mobile payments. SUN pointed out that China is the global leader in mobile payments and increased innovation in this space will further strengthen its pervasiveness throughout the society.

YAO Jinbo, CEO of, discussed the development of China’s new service market. He characterized the future service industry as being increasingly Internet-based and defined by quality.


The Afternoon Session

The afternoon session focused on four themes: (1) The Nexus between Thought Leadership &

Prosperous Development, (2) Globalization & International Opportunities Under Reform &

Opening Up Policy, (3) The Past 5 Years of Rapid Development: Overcoming Challenges &

Seizing Opportunities and (4) China 2035, the Chinese Dream.

The Nexus between Thought Leadership & Prosperous Development        

LIU Wei, President of Renmin University, discussed the ideological process behind the Reform and Opening Up policy, which he defined into three great discussions.

The first discussion is regarding practice. Practice is the only standard for testing truth, which he argues prepared the country for reform.  The second is the discussion regarding the preparation for reform and the mobilization from a planned economy. The third is finally defining the socialist, market economy.

LIU argued that these three discussions formed the basis of the Reform and Opening Up policy and are the process in which China transitioned from a planned economy to a market-based one.


Globalization & International Opportunities Under Reform & Opening Up Policy 

LI Keping, Former Vice Chairman and CEO of China Investment Corp, believes that in the process of economic globalization, China faces a number of challenges. In response, he put forward three suggestions: (1) creating a new investment model, (2) developing China’s outbound foreign direct investment model and (3) internationalizing the RMB.

CHEN Xiaojia, Chairman of CITIC Construction, expounded on LI Keping’s thoughts by discussing Chinese firms global development. As an increased amount of Chinese companies go aborad, the competition is becoming increasingly intense. How can we develop a long-term plan for these firms?


The Past 5 Years of Rapid Development: Overcoming Challenges & Seizing Opportunities

Under the theme, “The Past 5 Years of Rapid Development,” the speakers reflected on the last five years and how innovation has resulted in significant growth and development. HUANG Min, Vice GM of China Railway said, “the past five years of China’s development has seen the most scientific and technological innovations.” In his own industry, China has become the global leader in high-speed railway production.

CHEN Zongnian, Chairman of Hikvision, echoed hat sentiment. He pointed out that for Chinese firms, innovation is an important norm. He also suggested that all reforms must be centered around real entrepreneurs who are driving innovation in the country.

GAO Yunfeng, Chairman of Hans Laser, discussed how innovation relates to the manufacturing sector. He argued that although the sector has declined. The upgrading of manufacturing, including automation and robotics, is promising and lead to significant opportunities to fulfill the needs of China’s consumer group.


China 2035, the Chinese Dream


Welcoming a New Era in Chinese Sports 

Looking towards at China 2035, LI Ning, Founder and Chairman of Li-Ning, talked about the future of the Chinese sports brand. In his opinion, two elements are key: (1) R&D in sports and (2) the application of new technologies in sports products. LI Ning’s company has already began innovating to that end. They established their own sports research center and have strong R&D capabilities. As a former Olympian, LI Ning is passionate about the future of China’s sports industry and believes that people in the city will increasingly engage in sports activities. Thus, the Li-Ning brand will continue to invest in the industry and promote sports development in China.


Defining a Better Life for the Future

LI Bin, Founder of NEXTEV, discussed the future of the car industry, particularly in the emergence of autonomous vehicles and the increased integration of technology in cars. He posed an interesting question during the forum: Is a car a product or a service? In the future, the line between products and service will be blurred. As tech giants, such as the BAT and Google, invest millions in the car industry, there will be an emergence of the ‘new car,’ which will be the integration of products and services for the consumer. Thus, fundamentally changing the way in which we use and interact with cars.


Global Sharing & the Travel Revolution

In DAI Wei’s, CEO of ofo, talked about the future of the global sharing industry as it relates to what he coined, ‘the travel revolution.’

DAI Wei argued that people have always had the same relationship with transportation- whether it is a bike or a car, or a train or a plane. People want transportation that is fast, cheap, confortable and safe. 

The travel industry, DAI Wei believes, is ripe with opportunity.

In combination with the sharing model, transportation has experienced increased efficiency. In China, a single-owned bicycle was used for an average of 5 minutes per day. Under the new sharing model, a bicycle can be used on average for 80-100 minutes per day for a total of 20 trips. This eliminates waste and increases the efficiency of the transportation mode. It is also convenient for the consumer.

It also has increased trust among consumers. When DAI Wei first started, many people were skeptical. They told him that the site would be a ‘tragedy,’ as people would not care for a shared commodity. Yet, this hasn’t been the case.

Now, ofo has become a part of a global sharing revolution with service in more than 20 countries and 50 cities around the world. As of today, they have provided more than 10 million trips abroad.


China’s Economy in 2035

What will define China’s economy in 2035? Guanghua Dean, LIU Qiao, discussed China’s future economy in his keynote speech at the forum.

Based on his conservative estimates, he pointed out three key figures: 5.5% GDP growth per year, 200 trillion RMB, 20,000 RMB per capita. In 2035, Prof. LIU argued, China will lift itself from the middle-income trap and enter into the ranks of other modern countries.

In order to do this, Prof. LIU argued that quality growth, rather than rapid economic development, is what’s needed. The future growth model will be more inclusive and balanced between investment and investment capital gains. Efficiency is a key element, particularly as FDI declines overall. Further, business efficiency/productivity and innovation will ensure that China’s micro foundation is strengthened and the future economic growth is bright. 

Despite the challenges that China faces, Prof. LIU remains optimistic.