>> the indications are that since they began to introduce all sorts of administrative restrictions on the ability of households and companies to buy

apartments, since april of last year, that isn't showing off. the property market has cooled it down enormously. the difficulty is to know by how much and what prices are really doing. the worst that could happen come in my opinion, is a precipitous price decline across the board in urban china. if that happens, 20, 30% over relatively short period, your going to see a lot of bankruptcies in the developers, amongst the developers. they will pull a lot of bankruptcies in the construction industry and in the thousands of supplier industry, all the construction materials. that has not happened so far. could happen, and if it happens it will be bad. it will be hard to stop. my sense is that beijing feels comfortable that they can keep this under control. they're first line of defense would not be to reopen the

monitory spigots as they did in 2009. the first line of defense, if they fear a precipitous price decline in the property sector, now would be to undo some of the administrative restrictions on house purchasing to introduce april last year. both beijing and shanghai, to largest, have decided in recent days they won't do that. they will keep all these administrative restrictions in place. to me that suggests that they are not worried about a precipitous price decline. at least not yet. since that is the most important domestically engineered source of the slow down, i feel that the chances that china will drop down to a hard landing, limited, look at the other cause of the slow down that's on the external side, mostly european, american

demand for chinese exports, particularly european demand has dropped a very shortly. but exports on the whole are still growing. and as yukon was saying, they still have a large trade surplus but it's more than a few months ago, but still large. for the year as a whole, this year 2011, they expect a trade surplus of $150 billion compared to $185 billion last year. they will of course have preferred a much stronger export picture than they are confronting right now, but again i don't see any panic. they allow companies where, that are affected by the slow down in exports to go bankrupt. there are hundreds of bankruptcies in exporting zones, and beijing is allowing that to happen. according to my impressions of beijing lastly, there's a strong sense among them that this is an

opportunity to push the industrial restructuring towards higher value added production patterns, which is in the long-term interest. so they are allowing this to happen. they are allowing the growth to come down, and the economic work committee in beijing last week concluded that the main priority remains domestic stability, and that can be achieved by approved monetary policy. so it is going to be a policy response as there will almost certainly going to be to prevent the growth rate from falling too far below 8%, they will use cisco means which is a very important policy difference from what they did in 2009 when the emphasis was very strongly on monetary. so again on that score, without being totally confident in my own predictions, i am inclined

to think that those who feel that beijing will be able to keep this under control and prevent a hard landing, they are likely to be right. >> hans, you obviously follow china, among others. i'm interested in your reactions to this, but also your are a quantitative guy. how serious would a big slow down in china be for asia and for the rest of the world? domestically induced. >> for me, the question is not so much whether china will collapse. for me, the more important question is whether if the situation in the world economy deteriorates, china can play the same positive role as it did after 2008. because you have to think through now more negative

scenarios. you can't exclude a deeper crisis. and then we are empty-handed in many countries. and the rich countries you don't have fiscal space anymore. you hardly have margins big that many of the other countries, fiscal position is determined also. what happened after 2008 is that china put basically a floor in a freefall of the world production by stimulating their economy. and the conclusion is they can't do that in same way as they did in 2008 process of because what pieter said, that it was done through the banking sector, by creating a lot of credit and liquidity, and you can't replicate that because that is very dangerous because it creates a lot of liquidity in the shadow banking system, and they don't want to do that. the alternative is you have real fiscal stimulus which is indeed a better way to do it. but then the question is, cannot be as effective and as large as

what we've seen in 2008. that's where i'm not completely sure. so i see china more as like many other countries, reaching some of the limits of stronger action possible downside scenarios that you have to think through. and then the final remark to what yukon said, the issue is not so much that china will unlikely achieve negative growth rates, because you can have a real crisis in china with a small positive growth rates. it is quite possible that a lot of the financial stability is all based on growth rates, seven, eight, 9%. you create all kinds of nonperforming loans, inadequacy in the capital base of banks and all kinds of problems, then

you're right, the government can step in. but you can have financial tension in china with low growth rates. >> so, the message is that just like everywhere else, the safety net so to speak of policy in china has also eroded. that makes the containing even more important. and so my question may be, yukon, you can take it on, and is how does china view it now? will china, should china help europe? will it help europe? >> before i get have your crisis let me make one comment. if you look at china, suppose china's growth goes down to eight, down to five or six or seven.

and in some way china's economy will not collapse because like the united states, the domestic economy. so it's not as trade dependent as other countries are, although the public image of china is the export driven economy, it's not exactly an export driven economy. the countries which may be more vulnerable our countries like south korea, japan, taiwan, the philippines, malaysia, singapore. they had been expecting in getting 30, 40% increases in exports to china in the last four or five years. so they are quite export trading depend, more so than people realize. so there's a dramatic decline in china, from 8% and the seven parsecs, and let some of these financial problems that hans mentioned, it can probably manage it. there's a ripple effect in east asia which is probably larger or not focus on as much as one would normally suspect. that ripple affect acts as

secretary chu, whole growth are rapidly so we don't know exactly what the totality of fact is on the world and i think it's a known which is worth pondering about. going to europe, the euro zone, europe is excellent important to china, of course. eurozone, europe is china's largest trading partner, $480 billion of trade last year. europe is china's largest export destination more so even than the united states. china gives a tremendous priority to europe because, frankly, speaking, it sees it as sort of a hedge against excessive dependence upon the united states. china is very interested in a strong europe, and it will try to help. although public statements coming out of china is not quite negative. why statements coming out quite negative or tentative? the issue is that you as the average person in beijing and you see it on tv, g go to some construction worker in shanghai,

they ask what you think about your problems? should china help? the guy says i don't quite understand this. why should china use its hard earned savings to help lazy people in europe whose incomes are 10 times the mine? that's the dominant view in china. the government is very hard-pressed to explain to its people what it means to help europe and why it is in china's interest to help europe. but the key policymakers realize that under the right conditions, right conditions be a framework for the europeans are taking the bulk of responsibility helping themselves, a framework which is globally agreed upon, a framework in which the u.s. is involved either explicitly or implicitly, which is not discussing to which publicly today, and i think that's a very important requirement for china, china will participate. and i think the imf vehicle is the most logical one for them because it gives a greater

assurance, spreads it around, gives them a voice, and multilateral voice which is what they want. so my view is that under the right circumstances, china will help out, cannot afford not to. europe is too big to fail in china's if you. >> pieter, what do you think? >> what i think is less important. i agree with much of that. i think china would assist in the rescue for the euro situation, if they knew how. after the last summit in brussels on the mr. plow strickland was the head of the european stability fund was sent to asia to export with potential -- to explore how they might support. the first port of call was of course beijing.

it was a receiver will by the ministry of defense. they're very detailed discussions and then left a tokyo without a press release. evidently the objective of these discussions was to see how willing chinese would be to support the leveraging of the european stability fund him 440 billion euro to a trillion euro, and answer evidently was not now. we have to understand more detail. the chinese realize that in essence this euro problem is not a financial problem. it is essentially a political problem between north and southern europe. and that china by making available hundreds of veterans of dollars cannot solve the political dimensions of those problems. nonetheless, my sense is that under the right circumstances the chinese would wish to

support europe because europe is very important to china. in our u.s. senate or the world we don't realize that from china's perspective, it is more important trading partner than the u.s. it's also a very important source for china of technical assistance which is almost all the member countries in the european region have technical assistance program in china, which is of course not possible from the congressional law of the u.s., very limited. for china's perspective, europe is also the most important source of new technologies to china. that may surprise many in the audience who believe from china's perspective, that is not china's perspective. but china would wish to assist in a solution for the euro if they could, but they all realized that ultimately it is a regional political problem between north and southern europe. they have the financial means to

come in and a big way, if they were to come in, which is highly uncertain at this point, most probably they will do it through the imf. i think everybody is encouraging the chinese to think in those terms. is in addition to chinese would wish to purchase equity and european banks and foreign direct investment and european companies, they would do that directly not to the imf so it would be a two-pronged approach to the imf and directly. >> let me ask this. when you found itself in terrible trouble at the summit of october 27, president sarkozy of france picked up the phone to president hu jintao of china to ask for financial support. he did not call president obama. he called president hu jintao.

am i reading too much into this, that this mark a change in global, international relations? is this like the beginning of a new era? would any of you want to pick this up, hans? >> yeah, i think we are already in a new era. and just to go back to a slow down in china and the importance of that. you shouldn't think lightly about the impact of slow down in china. not so much because domestic consequences but because of the consequences on the rest of the world. we are of the view the world no longer depends on use consumer. the world depends on the chinese investor. and what gdp slows down a couple percentage points then investors will slow down much more that has enormous consequences for the rest of the world and the high income countries.

so in that sense, the economic importance of china is already very, very significant. but then to go to your question of china and europe, i think there are three reasons for china to support europe. first of all, they are in this big economic player, and they will help to prevent collapse of the the world economy. so if that is needed to prevent the collapse of europe, that is one reason for them to help. the second reason is they want a broader international financial system and one that is just based on the dollar. so for that reason over the last five years, they have diversified away from the dollar into the euro. so it makes a lot of sense to support the euro to at least have a more balanced system in the international financial markets. and thirdly, and you touched upon that already, for them it is a way to get a seat at the

table of international covenants. and that's indeed why i agree that they want to play this through the imf, but they want to see something back for the. and that is i think for the world economy very helpful that this enormous economic power will have -- that's what the program is very slowly, because they establish country, the high income countries are not that willing just to give them a little more space. >> yukon, what do you think? >> it's an awkward position. i think sarkozy phone call recognize the reality that china is becoming a global financial power, and should be involved in these financial issues. but from china's perspective i think they found it kind of embarrassing that they're being put in such a focal point, and they don't like to be drawn in to animal with airplanes what i called a leadership role. they like to be part of a group.

i think hans is correct that they would also like to play a more active role. they haven't sorted out how to do that, consistent with the historical policies. i think that sarkozy's appeal, and generated negative across europe. he gave a sense -- indeed, a sense about what china would want condition alley and what the conditionality would be. traditionally china does not like to be in a position, did not like to see formal conditionality to its financial programs begin without conditions. but they also feel of course that when they provided this to friends, and friends help friends. they're looking for something from europe in a way that would help their skin and global committee. ways which are not specifically tied to something like a european bailout package.

>> pieter, your views? >> the relative shift in the global economic power from the west to the east is happening and is accelerating as a result of the current situation. china is at the center of the east, and is by far the largest economy that they will be coming increasingly prominent in the global economy. this is a painful shifts for the western countries but it is happening today. i think mr. sarkozy's legendary phone call is a no station of the reality of the power shift of the financial and economic shifts. if you look at it from a global perspective, you might call the current situation, gordon brown did in his recent book, the first crisis of globalization. what has happened is that in terms of output, in terms of production, there's been a significant relative shift from

the west to the east already. the east now accounts for about 55% of total global output, but it's still not accounting for more than about half, maybe 45% global consumption. most of the consumption is still in the west. most of the production has shifted to the east. that is, according to gordon brown, the first crisis of globalization. and sorting out these production consumption imbalances globally is the challenge facing the global economy. >> before they open it up for questions from the audience, i have one last question of the panel. and it's about china-u.s. relations. we have this turning of europe towards china. we have on the other hand a pivot of the united states announced at the aipac meeting in hawaii towards asia.

so it seems like, you know, everybody is pivoting. [laughter] towards china, to a degree. but how do you read the state of u.s.-china relations with the dispute, now the announcement on automotive imports? what are the risks for china coming from the u.s. china economic and political relation? yukon, do you want to start with that? >> let me start with your pivot. having, european i think is brought the welcome by china. they see europe giving china

more attention as positive the americans did it for china as was discussed at carnegie a couple weeks ago has raised tensions. basically this is a potential resurfacing of u.s. objectives to stuff and more greater return to its dominant role in asian in the future and not quite sure that means in security and military sense. so these two pivots i think of a different kind of perception within china. now, this is an election-year year, coming, the transfer of power in china to the next generation of leadership next year. these political events are going to complicate what i call the financial economic discussions. it begins with what i call the anti-currency bill in the u.s. congress. china feels are negative about and it showing up in trade protection action on both sides. you mentioned tariffs on the g8 engines going into china, as being looked at very negatively on the hill.

and yet another effort of china to protect its sector and causing alarming problems. china sees this as tit-for-tat in terms of the tariffs which were slapped upon china produced tires exporting to the united states. a very significant, other larger significance to many chinese actually is the barriers or prohibitions that are restricting u.s. exports of chicken feet. chicken feet account for $300 billion in exports to china, a delicacy. and chicken feet are not used in the message that china is basically trying to strip those. what china is looking for our examples they can hit at but which are not exactly what i would call it issues, because they are protecting and open trade regime. they are concerned that many negative sentiments which emerged during this very heated

political process both in china as well as the united states is going to cloud what i would call the trade finance relationship between two countries. the big issue today, this technology transfer, ipr property rights, the tensions which are showing up in that area are probably more important in the future, the solyndra solar panel? no, in terms of what extent should usb promoting development technology here, to what extent is it being subsidized here? to what extent is china subsidizing the department of the green technology industries in china in a big way. the competition, the fallout, i think that would be a big issue. it's going to be a big issue because not only are many u.s. companies something, but you will see 40, 50, 60% of the capacity wiped out in the coming year. it is a problem that produces and governments on both sides

and they will start to see that it's actually a problem shared rather than a problem which is only one side or the other. >> pieter, china-u.s. relations? >> i think both sides i think realize how incredibly important these financial relationship is. it's not a subject in which i climbed up a lot of expertise, but it's obvious that the relationship is not only extreme important but also extremely stressful. it is so stressful because there is a basic lack of trust between the two giants, the united states and china. one of the biggest failures of the 2008 financial crisis, i fear, is the chinese respect for the american economic system, particularly the financial system. that's hard to measure victim of the crisis, but it is important

because there has been a very subtle shift i think in chinese perceptions of the united states prior to the crisis, almost, although that was never explicitly expressed. it was very clear, the exception of the political system, the american economic model was china small. that's what they aspired. my sense is that has disappeared to, that china feels that their model isn't so bad after all, and maybe they have already done enough in terms of economic reforms. that's a very dangerous conclusion, if it takes hold of the decision-making process of the top leadership. i'm still hopeful that that is not the case. during my recent visit to beijing last week, i was actually presently surprised by how many people kept searching the need for further financial sector reform. that was a big surprise to me.

another encouraging element is that just prior to my visit, you have fairly high level bill to build discussions in beijing. after the announcement they would go forward with a big arms deliveries to taiwan at the beginning of the year, china's reaction was let's cool it on the mil-to-mil relationship. which i believe has to be a pivotal part of the relationship. fortunately, for reasons i don't claim to understand, the situation evolved a more positive direction than fairly serious mil-to-mil discussions were held in beijing just prior to my visit last week. >> do you have anything to add? >> yeah, i think the trade friction and we discuss, but also the discussion on the currency. they illustrate that the rise of china is not a smooth process

and the fact that the united states has to give up some of its dominant is not -- and looking forward, that can become worse i think because it can go into more areas. if more and more chinese companies want to invest in the united states, which would be a very natural process, there are other potential sources for disputes. if chinese companies to start competing more directly with u.s. companies, then you have more frictions. if china becomes more dominant player in financial markets, then you have more conflicts. but i think at the same time you should overemphasize the importance of the bilateral relations between china and the u.s. sometimes you think that's the only thing that matters, that we have a g2 in the world, only to

countries that are done. that's actually not true. we're moving to a multipolar rule but if you look couple decades ahead, then the importance of developing countries outside china is more important than all countries together. there's a lot of growth polls are coming up. for china it's important not to continue to focus only on its relationship with the united states, not even with europe, but to think also about its relation with the other emerging countries. >> excellent. i'd like to open it up now to the audience, please. introduce yourselves, affiliation name, before you ask your questions. the gentleman there in the middle. >> thank you. >> please stand up and tell us who you are, please. >> thank you for organizing this timely event.

with china news agency. my question is really two additional resources for ms, for the panel. recently as the britain is reluctant to give share to 200 billion euros, additional resources to imf, the european countries hasn't got the 200 billion euros for the mf. so should the united states and china step in or step out for additional resources for the mf at this particular time? as for the united states, due to the strong opposition from republican senators, we haven't given the 108 billion euros that were promised, and for countries like mexico and china, they have their analysis, additional resources is not related to

voting share. so, this is my first question. and secondly, there is also differences among the important players for countries like germany. they want their resources are going to the general resources account to force other european nations come and for countries like the united states, they want money going to special account to reduce the contagion across. so how should countries solve their differences? thank you. >> let -- good question. let me take a couple more and then we will come back. the gentleman here in the front. and after that, the gentleman just -- >> thank you. i'm tom with a world affairs council.

i know the panel basically things that a hard landing is unlikely in china, but if there is a hard landing, what do you think would be the political impact on china? you already talked a bit about a lot of bankruptcies. with bankruptcies would come and a lot of unemployed people. this is a time when there are a lot of protests in china about heavy-handed activities of various kinds. would we see some political ferment in china? >> and then the gentleman there who had stood up before. >> i'm retired. >> you are with what? >> i'm retired. when i see the topic that you have chosen their, global economic outlook, i wonder whether you can really exclude countries like brazil and india? pitcher mentioned the

multi-global development, so i'm wondering whether you can really ignore them. and the second thing was i was surprised that you did not at all, even not once, mention employment are coming, and one other countries, the united states as you mentioned, there's no doubt that the next election will be heavily influenced by the quite significant unemployment. the shift in consumption and production, how can you did not really also mentioned employment patterns and changes because they are so important? >> okay, let's take these three questions in reverse order, and if it's okay with the panel i will ask hans to answer the gentleman, and yukon and pieter, the question about the impact on politics, and i'll give a stab at the europe question into well.

hans, please. >> i couldn't agree more with the last question. that indeed a lot more are important and we're able to discuss here. i briefly mentioned the slow down in brazil and india, but it is a very important sentiment in both country. and crucially important for the global economy, we see a sharper slow down in the last, say, four months. to a large extent due to domestic policy also, two large extent the reaction to very sharp increase in domestic demand in the periods before. and those are independent developments that should be considered and are considered when we are doing a global economic prospects. then the unemployment issue is also incredibly important. i think even broader, when we

talk about the high income countries, we have to realize that we're not talking about just a normal recession or normal downturn. that there is fundamental structural problem in high income countries of lack of growth. and you need fundamental changes to come out of this situation. and already four years we're talking about the fact that it will take many years before you undo the damage that was done in 2008, which by itself is a problem. but it not only takes many years, it takes also structural reforms and political system is not ready to take those steps. so that's important and very difficult problem. if you're looking at the moody's and what is happening there, of course you have your link with unemployment but you have a link with structural changes also. i agree there's a lot that should be thought about. >> link between economics and

politics in china and? >> well, papers are full of discussion of this really in southern province, for the 13,000 residents are protesting and the top leadership is trying to negotiate what i call a fair out. this is indicative of what i call very large increase of social interest in china. so if every so-called -- it would make things worse. but from a common viewpoint if you try to ask what are the so called economic factors which are likely to engage upon politically related sensitivities or social unrest, i would probably slide probably are the example over the bow of land rights and land rights and how lands are used and developed, can it be taxed, who owns it, major issue in rural areas and urban areas, china has

not been able to do with it. this is a source of many instances of what i would call political disputes in china. the second issue is what would happen if you have a collapse to what i would call china's concerns over disparities? disparities in china, income inequalities are largely spatial in nature. it is not unlike what it is in united states, singapore, malaysia so that's not any quality that matters but the inequality that matters in china is the urban rural one. the urban rural income inequalities through in half, the highest in the world. that is a source of tension between what is happening in the countryside, cities, and how you deal with this. i will say the third issue has to do with what i will call the social protection programs in china. are they going to be strong enough if we have a collapse and social protection in china are not as strong as they should be.

if you have a collapse just ask what is going to increase the tension over resources, access to resource. and the answer is it will because revenue to everyone, and income and a buddy, incomes collapse you'll have some problems, everyone. any quality will increase or not? not? it on who will be hit most by the. will can't have social programs that can do with this? i think the programs are in a state of development and there are some vulnerabilities there. >> thank you. pieter? >> specifically on the question of social unrest becoming more politically endangered, in response to a hard landing, i think that was your question. it's important to realize that there's a lot of social unrest in china today, how much of that social unrest is politically in nature is hard to ascertain.

myself is that most social unrest in china is focused on local grievances, unfair competition for land, local pollution problems and things like that. if the growth rate were to drop too hard landing situation, 5% or so, it's very likely that social unrest would intensify in china, and that what is a more political nature. but i cannot answer that specific question, what will happen after that. this government for 30 years has been able to maintain high growth, and in spite of that social unrest is on the rise. the micro-blogging which has become so prevalent in china in the last 12 to 18 months is surely, well, on the one hand a source of greater grievances because they can be more easily shared. on the other hand, the micro-blogging is also a safety

valve on the system. people cannot express their feelings more safely through the internet. it's very hard to say, my overall sense is that china is politically stable. much more stable than most people realize enacted. let me take a stab at your question. first point i want to make, i think it's good news that the eurozone has committed i think it's $200 million, if i remember correctly, just in the last few days to increase imf resources. imf agenda resources. i think that is the good news. u.k. has not said that they will not contribute. they have said that they will consider a contribution early in the new year. they would prefer to do in the context of a broader g20

initiative. and here again, the u.k. is a little bit -- in europe for all the reasons that you have been following. and, indeed, the u.s. congress is undergoing difficult on the previous agreed expansion of imf resources. and im, with one or two others across the street, amongst very small number of people who are actually daring to propose that in the event of the european crisis that would threaten the stability of the global financial system, in that event increased imf resources should be directed to europe, and that

requires a u.s. contribution as well as chinese contribution. there are very few takers on this view, but i guess that's why i work in a think tank. [laughter] so, you know, i'm paid to thank. and i think that if italy cannot repay its debts, that's the united states problem as well as germany's problem. and so, therefore, that's the view i maintain. and i think the chinese out to be following the same logic. there is a big coordination problem, but in the end you cannot say we will rescue portugal, but we're not going to rescue italy. that just doesn't make any sen

sense. >> my name is randall doyle. i work for the state department i'd like to ask a geopolitical question and i think that connects with what you guys were talking about. china historic as always looked internally for injuries, potential problems with the recent death of kim jong-il, the americans announcing a military base in darwin, a part of australia. a huge energy resource pouring into age which they see as a quasi-threat. i think to myself that with all these pressures on the government, how is china going to react? because it's got huge domestic problems, and even though we talk about they have the money, they has been a lot of that money domestically and yet i think we are kind of shaking them with what they see as potential -- maybe not an aggressive or over encirclement but it does appear to many people that we're having an encirclement policy. i'd like to ask, how do you

think the chinese leadership when they sit there and do with all these domestic issues and in the military comes in and to listen, americans are redesigning the security architecture in the region, how are we going to respond to that? i think this is a huge battle that can take place in the leadership of the chinese. the chinese will go to a leadership change in the midst of all this so i think it is actually sensitive. >> thank you. we will come back to that. take a couple more. let's have a lady, the lady there at the back. and i will come to you as well. >> thank you. with china's 21st century, this is newspaper, as yukon said, china ought to provide financial assistance to help with the european countries if the conditions are right. and if i understand correctly, one of the conditions ought to

be that u.s. also contribute. however, so far the u.s. government is very reluctant to even talk about the possibility of providing resources, not to mention that in the congress already a few members raised their eyebrows even before this issue, fully engaging issue in the congress. so my question is, do you think now is the time for the u.s. to seriously consider providing financial assistance to european countries? thank you. ..

2 promoters of the planet. are there ways to work together in this position, many at least in this country, more competitive rather than cooperative terms. are there alternative ways to work together? >> good. maybe we will take more and come back to the panel. the hand at the back. yes? >> thank you very much. i am just wondering if the panelists could comment on chinese bilateral engagement with individual european countries, specifically on the periphery. there has been some investment

deals with greece, spain and portugal. how will this affect or how do you foresee this affecting overall e.u. policy towards china in the areas of human rights, the environment and p r protection and jump the gun a little bit but how do you see european high-technology transfers towards china? what does china want in return? is it too far to jump the gun to say they're looking for weapons or arms? do you see that possibility of opening up? this was an issue with chinese e.u. relations in the past. how do you see this playing out in the future? >> okay. maybe you want to start a soft, pieter, on the situation of the geopolitical situation,

u.s./china the basis of how do you see that? >> the area of great concern to the united states and the whole world, global shifts about which we were speaking also reflected in the strategic sustained changes in strategic deflation and you mentioned some of them. i am not so sure the chinese know where their heading themselves. they see it as expressing concerns -- whether they are as worried about public pronouncement seems to suggest i don't know. only 30 years ago these questions were completely outside -- nobody gave it any

thought. we should be careful not to jump to conclusions about china's attitudes on these changing strategic patterns. my sense is they wish to become a global power. they wish to become not only a global economic and financial power but military power, strong regional military power. those are enormous challenges for the u.s. more than any other country in the west. a lot of patients -- hastens -- patience to deal with these challenges to challenge these energies in a stable direction that these challenges are facing china as they are facing the u. s. >> on the geopolitical -- this is a tough issue for china.

increasing tension to the region. they also seek something that they actually inadvertently encourage because they could relatively hard-line the last several years. i figure the government should realize the best way to deal with this is security issue -- to try to soften china in ways you are seeing in collaboration and encourage more of these and particularly in a year when china is going through a leadership change they don't want more stress. in the long term it is more complicated. the long term depends on what the u.s. reaction is, in new government in china and what their priorities are. on the climate change issue a

want to emphasize, in the united states we have seen things about china -- climate change's implications. there's not a debate in china on this. the reason is 95% technocrat -- scientific information. the economic change is not a problem. united states, our leadership are not -- they like to debate a lot and have more personal opinions. the field china is very committed on environmental goals that they are hung up on issues of targets liberal to be treated the same as developed countries but the commitment is certainly there. there's also the dividend of public sentiment in the united states. there should be waste to collaborate. the form of that collaboration, technology aspect and large aspects are here but you have a

problem because the manufacturing aspect of that policy are likely to be done in china. the question is is very potential for a collaborative relationship? that is a strong example of yes, there is. apples technology, everything develop in this country, 65% of the apple revenue sales worldwide, things are spurring the economy. that -- is manufactured in china. that is a win/win in some way. that is a big issue in technology. natural values in the way that both sides feel they are getting something out of this. politically certainly in the united states, the u.s. is not gaining unnecessary share to make this a true partnership. >> to follow-up on the climate

change issue and how you achieve more cooperation to solve those global problems and provide more cooperation between the united states and china but more generally more cooperation between high-income countries and developed countries. what is needed is there will be a fundamental change in that process. until now it is always the high-income countries can up with a global solution and given to developing countries and they're looking at it and they say that has too much of the characteristics of the centrists in the climate change proposal -- very good example of that. stalin not interested and these are your problems so thank you very much. in many other areas you have the same kind of dynamic for high income, thinking globally but in there and vested interests and

tried to push it through other countries. what has to change is developing countries start thinking globally. not just about their own economy but think about a global problem and some vested interests of developing countries but you still need to grow, global solution would be. and put that on the table. and high-income countries should start reacting. the small staff in that direction, much more committed than before and other developing countries are good enough to think through the global solution, venue change the dynamic but we are not there yet for two reasons. many developing countries including china have not found their voice yet to think

globally. the high income countries are not ready -- it is absolutely necessary to get those global solutions. >> does anyone want to pick up on the european investment? chinese/european investment? >> the way i understood the question is what is the chinese relationship with european countries, in addition to china's relationship with brussels. my sense is the chinese are playing both sides and have very active relationships certainly to major european countries. the european institutions in brussels. there is a high-level strategic dialogue in brussels and beijing which precedes the strategic dialogue between the united

states and china by quite a long time. this was instituted already in the late 80s, the dialog was started by secretary paulson in the george w. bush administration. that is an extremely important one. but again from china's perspective europe is important. the most important trading partner and important source of technical assistance and that comes from brussels which is a large program for china but also from the individuals in the countries. >> other questions? the gentleman in the middle. >> alex kaiser. just got back from two week in beijing and want to get the panel's view on something that disturbs me. has to do with younger people.

for the first time i heard descend. they were expressing their irritation at the controls put on them on the internet, and was wondering whether the panelists view that as an exception or something new that is starting to happen. >> to the lady there. melissa? >> thank you very much. i have a comment followed by a two question this. the tremendous shift in china and how well the government has been able to deal with this issue so my first question is we see this risk increasing. my question is to what extent the consequences of coming elections is the reaction.

the second question is we see the general systemic thing we personal success of the system -- at the same time tremendous crisis in these democracies having trouble dealing not just with the china factor but fundamentals of the economy and big social changes and the population coming out of the fiscal crisis. when will the west get real about dealing with this? this is focused on four or five years and politicians don't want to talk about the belts tightening that is necessary to deal with this long-term fiscal financial issue coming on to the crisis. what is it going to take? >> the last question was related to china? [inaudible] [talking over each other]

>> not doing very well -- market-oriented democracy having a lot of trouble dealing with things that have to be done, better to deal with the fallout of a financial crisis in an independent global economy and we see lack of reality in washington and europe in dealing with this issue. what is it going to take for it to sink in and deal with it? >> there was a lady there. >> margaret from the university of maryland. i wanted to go back to the euro zone crisis and push a little bit on your assertion about the coordination problem. today we have heard tremendous evidence that there does seem to be a great coordination problem. everyone seems to think the europeans don't do banks, maybe

towards issues that are the solutions that the same time that the u.s. needs to stick in, chinese need to step in but the chinese are waiting for everybody else. the u.s. is caught in its own problems and the imf is sitting back and waiting for europe to be the central motivator for this as well. my question is looking for a sliver of hope about how these court nation problems can get solved by of if europeans goat to greater extent than they have so far to solve the problem and if they're not doing the problems that seem to unravel more and more, where is this initiative going to come from beyond europeans doing what they need to do to get this multilateral power coordination process? >> we have a question on quotas

and the internet and the question about protection for china. we have other questions? yukon? >> very quickly on the use tissue, concerns about restrictions on the internet--generally outdated. you have to realize this generation has no direct contact or context of the cultural revolution and the aftermath, basically saying we have dealt very hard with problems -- they don't see that as a necessary aspect of their country. the government coming down

harder on these restrictions -- also going to decrease employment opportunities -- seriously in coming years than coming out but the general sense in the university -- >> good. protectionism. at risk of protectionism under the new government, pieter? will it make a difference? >> we don't know how the government is going to look. some key figures will play a central role, how the government will change its policies and attitudes on trade. hard to predict at this point. you have a wholesale change in the central committee coming of of the congress in the fall of

2012. if anybody feels confident predicting what impact it will have i am not one of those. i came away from my most recent visits very keenly aware of the importance of china -- they of course would like to resolve the recent introduction of duties on certain heavy vehicles, i don't know how important that is. i am inclined to think it is not so important but the prevailing opinion in beijing is to go for an open trading session as much as they can to benefit from the open trading session and from the wto membership more than any

other developing country, who question that. there will be trade friction specifically with the u.s. but on balance i would expect china -- >> you want to take a stab at the second question, the reforms that are needed long-term -- reforms needed to reflect this global change and why they are not happening? >> we link it to some of the other questions also, coordination issue in europe. to some extent a structural change also. the observation that it is a core mission problem and not everybody agrees with that. many analysts say the problem of europe is too much coordination

and you don't have the flexibility in individual countries to do your own currency and react in your own way to problems and i would agree with you that actually it is a coordination problem. the fundamental problem in europe is individual countries are too small and too integrated to deal with the problems. one of the big problems in europe at the moment is you have to rescue banks and supervise banks and it is still done at the individual country level and that creates all sorts of problems that have to be solved and goes back to the banking sector and because it is organized in individual countries it is difficult to get the work nation because there are different interests in different countries. a ultimately i am optimistic that european leaders but also

ultimately the european parliament understands the only solution is to have certain issues more centrally organized and in that sense i must say that europe is the head of the united states in attacking the currency issue because in europe at least the for the european union steps are taken to solve long-term issues and if you look in individual countries like italy and portugal, if you look at the reforms they're looking at, on lot of these long-term elements are there. that is ultimately what is needed and the big problem in high income countries is all the discussion about now and backward looking is not based on a division where you want to be. the final question on the point of social unrest and the inability of government to deal

with that, peter said it already. it is interesting to observe that that is not just the problem of where there are adverse developments, when you have a success story so in china you have the educated people who are in a different way educated than ten years ago. in china the emerging middle class wants to have a say but in the middle east not just poverty but the fact that a lot of people came out of college with higher degrees than in the past but couldn't get a job yet many of those examples where it is difficult to deal with the consequence of progress, the ultimate example in high income countries, you have a lot of programs but the politics is no longer able to take the next step so you are stuck and --

losing the rest of the world. >> on your question, the first step has made progress in the last week or two. first step of the progress, first step of the process is the europeans put in significant additional chance of change. european central bank stepped up its support to the banking system issuing three year loans, less demanding collateral. this is part of the safety net and everybody knows also is not

official, european central bank is acting to stabilize the bond market. for very good reasons. there is no explicit policy on that in order to maintain pressure on countries in the periphery. the first step is there. the second step would probably come through some type of g 20 coordination where one serious discussion took place and the message that came up from the last meeting was the europeans first have to get their house in order and come up with a credible plan and put money on the table. i don't think they have done that to the extent that they

should but they have made the extension so far. to be perfectly frank, i doubt whatever process you put in place that you are going to get a very large involvement outside of europe unless the united states enters the lead. you place your bets. how might it happen? unfortunately, it might happen under address. just like this old program was resisted and caused first rejected by the congress and caused a financial panic and then accepted by the congress a week later. that kind of circumstance might develop. then i think the treasuries of the world are going to be -- the key senators are going to be

called and then the situation might change. i don't know. i don't know. but i do believe that it is very unlikely that large packets will be negotiated without the u.s. involved. any other questions? we will take one more round and close. if there is one, the lady there. >> thank you. i am with china television bureau. i am chinese but i will ask questions on the u.s. economy because in recent months we see annual economic indicators that the housing data and lower rates and prone to be released tomorrow, promptly be positive

as well so my question is can we take these signs of u.s. economic recovery? you mentioned the upcoming -- what efforts do you think the government should make to process the u.s. economy? >> we will take one more and then turn it over to the panel and i am also going to ask them to make any final 30 seconds intervention. >> with vietnamese americans. i follow up her questions and would like to link a few other points. we talk about global. touch on the euro asia and you touched on the shanghai cooperation would that be -- and also touch on the issue of the

approach of the u.s. and tcp how china reacted to that and related to energy and jobs and questions about the economy, howell you see the future investment of china in the u.s. in creating jobs in this country? >> that is a large number of questions. unless you to pick a couple of them, pieter and yukon but first, hans liberal do you want to comment on the question of the united states and also give us your thirty-second parting message? >> the positive news is good news because it shows that the

u.s. is not sliding into recession. it is not good news because of the problems are over. this is the rebound that comes after a week first half of the year. so you should look at it in cyclical terms, almost technical changes but not the fundamental problems that have been solved. in the u.s. legal investment in the housing sector is 1-third below where it was before the crisis and probably should remain very low. you can't get a recovery -- small recovery in the housing sector. you get a recovery from restructuring the economy and we are far from that. i am seeing it in a positive way but i am very worried about high-income countries including

the united states. my last 30 seconds very much in line with the question of all the other events in the world and i am always surprised -- touch on africa. fascinating developments. many countries are growing 66 per year. fundamental reforms in their economy. they combine the original chinese interests. something happened in africa. this situation, fundamentally different from what it was ten years ago. they play a different role in the global economy and that means for me that any

discussions, we are too much focused on what is happening in high income countries. >> thank you. yukon? >> one quick comment, whether there is the shanghai cooperation conference in east asia, or whatever -- is getting confusing and they have overlapped their responsibilities weather on trade or financial responsibility. but how much is a sensible overlap? they have some views that some things are not working out as they like. my personal view would be the objective are sensible ones. hard to see where you can

address those objectives without china's participation. that is what china is asking itself. this is as a grouping what we are encouraged to participate in and the shanghai cooperation, central asia and soviet security issue in that particular region. last comment i would make, has come up in the course of the discussion, very much in favor of open -- want to increase the capital flow. not so much the money coming in but how to i actually take the flow out. not only does that establish more direct relations but the flow is the likeliest boundary to pressure for appreciation.

you want to encourage more flow out of china and you look at the former soviet union when it opened up the trade capital account, soviet currency collapsed, not because -- soviet citizens realized they diversify their holdings so reshaping the portfolio changed the value of the r&d in the future with big issues coming out. >> 50 seconds. >> the answer to those questions. take your pick. >> global economic outlook is extraordinarily uncertain and complex. it is so uncertain because three major economic pillars.

united states, europe and china are facing difficult positions. the u. s is unable to come to terms with longer term fiscal issues, very hard to be optimistic about the u.s. outlook if europeans are unable to come up plausible solution is hard to be optimistic about europe. china is the least troublesome of the three in the sense that the economy is going very fast at the moment. of the layoffs in the manufacturing sector that we are observing don't translate to high levels of unemployment. china and manufacturing, still rising. shows you something like a fast-growing economy in spite of the slowdown which has been

going on and will continue for the next 12 months. i don't want to discount the risks. i cannot assess the economic side. there's a high probability china will manage the slowdown in such a way that they will benefit in terms of economic restructuring. we see the external imbalance is coming down. the surplus as percentage of gdp is unlikely to be above 3% compared to 11% in 2007. domestic consumption growth rate, at least the data suggests the extreme imbalance between china's share of consumption in gdp, the lowest in the world,

the last three months suggest household consumption going faster than gdp which is needed to bring about restoration on that side. the concern i have is the leadership change is in 12 months. the new team will make big mistakes and not correctly assess the nature of problems and if china makes big mistakes in their policy framework, then all bets are off. there is nothing that is currently china's success. >> la thirty-second is to resonate with natural comments. this is to washington audience now. hans said the world is getting bigger. this is one message.

the world is getting bigger, with china, the duplicity of growth policy in emerging markets and that is a huge opportunity for the united states. in many ways the united states is the economy best positioned to capitalize on this, its innovative capacity, openness, establishment of the rules under which the global economy operates. there are very big risks that the world is getting bigger. that was a form in which it is getting bigger too and none is bigger in my view at the moment.

for a washington audience, been more opportunities are out there, politicians here need to be much more aware of the risk coming from overseas. it is remarkable to me how insular these policy debates and how concentrated on the question the policy debate has begun in this city and -- this is from a global superpowers, of the risks that are out there and the opportunities. i will leave it at that. i would like to thank on behalf of carnegie and all of you the panel, they did a terrific job. thank you very much. [applause]

[inaudible conversations] [inaudible conversations] >> michele bachman is here, i understand, and she is thinking about running for president. which is weird because i hear she was born in canada. this is how it starts. >> it is amazing to be watching all this history, these amazing buildings and yet here we are at

the hilton. it was amazing. who are you wearing? what does it matter? i am going into a hilton. >> nine million views of president obama's appearance and two million higher. c-span coverage from the white house correspondents' dinner ranked among youtube's most viewed political videos. watch them on line on the youtube channel youtube.com/c-span. up next, ceremony to mark the 20 third anniversary of the bombing of pan am flight one 103 which exploded over lockerbie, scotland, killing all 259 people on board and 11 on the ground. two libyan intelligence officials were charged with that bombing. we will tear from attorney-general eric holder and counterterrorism advisor john brennan at arlington national cemetery. it is just over an hour.

>> we remember them. john michael gerard aherne. sarah margaret acre. jon david akerstrom. robert e. lee alexander. thomas joseph every. eme emery. martin lewis abelbaum. rachel mary azerleskie. judith ellen at concern. william garrett atkinson iii. elizabeth nicole avondnia. jerry don average. claire louise baccioci.

harry michael bainbridge. stewart murray barkley. been married go. julia mcburney benello in. lawrence ray bet. theodorea eugenia cohen. >> philip vernon bertram. alastair david -- michael stuart bernstein. stephen russell burrell. nil --battia. kenneth john isset.

diane fuller. steven john bowlen. gwen john buckley. paula mary alderman buckley. nickel boulanger. france's boyer. nicholas bright. daniel solomon browneer. colleen renee broader. timothy merriman. gary leonard colasante. >> michael rowland gupta. roland buddha. steven bulow.

martin can. sylvia beconuena. holland nagawanmer. scott mosh carry. ronaldie kennedy. is daiquiri --zachary zupposi. timothy cold will. ronald collasen. richard anthony chichawney. frank chula. eric michael coca.

jason michael coca. bridget egonanin. shannon econannin. thomaskinkonnan thomaskinkonnanin. >> tracy jane corner. winless larry corti. patricia marie quote. john coming. joseph patrick kirby. william allen daniel. gabriel delarisa. joyce christine demarro. geogzanka denato. alm dixot. chancia dixit.

michael joseph doyle. edgar howard eggleston iii. bin ula angstron. teheran at brigham. charles thomas fisher iv. >> correction choice dater. joanne flanagan. kathleen mary flanagan. thomas braun flanagan. clayton lee slick. parter -- arthur angelo. tracy denise franklin. paul stephen matthew freeman. james ralph fuller. elubiiah geloer. amy beth gallagher.

matthew kevin cannon. kenneth raymond burgenstein. paul isaac get. kenneth james gibson. william david geebler jr.. andrew christian gillus right. >> shannon davis. david j. gould. andre nicolai kolorgin. leonardo gordon. linda susan gordon. ann madeleine gorgax. lormac and gorgan. lorena francis halsh. lynn carroll kardintian.

anthony lazy hawkins. dorr up and rihanna henry. maurice peter henry. pamela elaine and overt. rodney peter gilbert. alfred he'll. catherine augusta hollister. josephine lisa hudson. >> john patrick flynn. melinda christina hudson. sophie hudson. roger elwood hearst. elizabeth sophie penell. khalid jafarrobert check. carl jefferies.

rachel jefferies. kathleen mary german. mary lincoln johnson. timothy barrett johnson. j. joseph deegan. patricia ann klein. gregory kosmoski. elka isconsuse. mary lancaster. >> karen leigh hunt. ronald albert riviera. maria beavis lercachiva. martin lip burger. william j. flavor. when the lincoln. lloyd david lowe.

maria theresa murphy. william john mcallister. lily beth macalully. william edward back. james bruce mcmurray. douglas eugene malachot. wendy forsyth ballot coat. elizabeth lily merrick. louis anthony moreno. no george martin. diane marie maslowski. >> beth johnson. daniel and it mccarthy. robert eugene macaulay. charles dennis mickey.

bernard joseph mclaughlin. chain susan gilbert. on row. suzanne maria. joseph kenneth miller. jewel courtney mitchell. jane morgan. eva morrison. have a gut rachel mosley. in good elisabeth morrow way. john nowak. john kevin mulroyt. geraldine murphy. been at can murphy. jean afton murphy. >> christopher andrew jones. karen elizabeth nivens. daniel m. o'connor. mary denise o'neill. lindsayo'tennedsi

lindsayo'tennedsick. guana yvonne mark hurd and owens. robert tagnuco. more abigail owens. martha i've owens. robert owens. sayre and rebecca owens. chrost chrostosmichael papadapolis. michaelpaskato michaelpaskatori. sayre buchanan phillips. frederick phillips. james andrew camelsic. >>gerianne frances kelly. david platt. walter leonard porter. pamela lynn posen. william pugh. osamao krikan.

omo ritan. suruchi rutan. anita lynn reeves. mark allen raines. jocelyn macarena. diane marie ranchnanik. at the ruler. yano scabor ruler. suzanne roller. maria routes. salt mark rosen. >> alexander leva and steamed --levfinste --levfinstein. andrea rosen fall. daniel peter rosenthal.

myra josephine royals. on or david rubin. elyse jean farenstinin. scott mr for saunders. to reset elizabeth jane saunders. yoda and --jonahnnis chanlmers lindsay lohan thomas schalten r schaltenger. sally elizabeth scott. amy elizabeth shapiro. rudullah shawstein. joan chin chang. of irving it stanley eagle. martin bernard christopher simpson. uria sinoa scabo.

>> richard paul many --minetti cynthia smith. in grade anita smith. james alan smith. mary edna smith. john somerville. lindsay somers delfts -- lindsay somerville. roslyn haiti somerville. james ralph scope. geraldine stevenson. connell louise stevenson. john charles stevenson. rachel stevenson. charlotte stinnis. michael barry stinnis. stacey stennis. dahlia stratich.

>> roger carson -- anthony swan. flora macdonald margaret dwyer. mark alex paget. andrew alexander john. david william trevor. arvo anthony thomas. jonathan ryan, as. rwanda, mark lawrence cohen. alexia kathryn. barry joseph valentino. thomas hinholden than.

thomas this sunni. nicholas renia. peter loco. >> les rogers. raymond wagner. janine wyedu. thomas edwin walker. kisha weeden. jerome weston. jonathan wind. bonnie lee williams. britney lead williams. eric john williams. george williams. stephanie williams. miriam levee wolf. chelsea marie woods. edra woods.

joe nathan would. joe nathan woods jr.. mark james zenberg. we remember. [silence] [silence] ♪

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[silence] >> we are going to go a little bit out of order. we are going to have bob mueller but we're moving up the attorney general. probably because he has to leave and can't stay. he will stay as long as he can. the attorney general, if there is a job in government that gets more criticism than transportation security administration is it is the attorney general. i just want them both to know that that is not true here. you are both among friends here. we are very grateful for what both of you have done to keep

this country safe. the attorney-general, a number of people called and said how did you get the attorney general to come speak. we didn't invite him. we didn't invite bob mueller. they wanted to come and talk to us. the attorney general and bob mueller worked on this case 20 years ago when they were in the u.s. attorney's office. no one knows this case with the exception of brian murtagh better than these two gentlemen. we are honored that we have friends so high in government that knows this case and care so much about it. it is fair to say it is not a professional interest but personal with these guys. we know that -- the letter fbi director mueller sent to the scottish justice minister when

he released the prisoners on compassionate grounds. an unprecedented letter objecting to it. we also know that john brennan called me gaskell on october 19th, 2009, and said do not release this guy. eric holder called the castle in june and said the same thing and said that if he was released it would be an outrage and it would be a hero's welcome which is exactly what happened. we don't talk about politics here because this is to memorialize people who died here but the best way to honor the people who died is to continue this quest for justice and that is why we are interested in the case and we are honored that eric holder and other people

will come. we know our government and the scottish government will continue this investigation. . i don't want to know. i don't want to know the evidence. i don't want the world to know what goods we have on some of these guys so that others will start already making excuses that it really wasn't a fair trial. we just want to know our attorney general is continuing to help us in our fight for justice so we are honored to introduce attorney-general eric holder. [applause] >> but afternoon. thank you, mr. duggan. it is an honor to stand with you and it is a privilege to thank you for the work you and other members of the families of the victims of pan am flight 103

have led in your search for healing and dancers and ultimately for justice. on behalf of my colleagues in government and law-enforcement, please note that in the search, you are not alone. today along with deputy national security advisor john brennan and robert mueller and justice department national security division lisa monaco and so many dedicated leaders, i am proud to reaffirm our ongoing commitment to ensuring justice for the 270 innocent victims whose lives were violently cut short exactly 23 years ago today. for the family members and friends whose lives were forever changed on that tragic day. i also would like to recognize frank mulholland and his excellency, ambassador ali suleiman aujali who have gathered with us as we mark this

anniversary and reflect on its impact. none of us will ever forget that terrible moment when so many lives were stolen and others shattered by a shameful and senseless act of cowardice. the losses that resulted in the air and on the ground, not only to families of passengers, crewmembers and innocent bystanders who were killed on december 21st, 1988, also shocked the world and had a dramatic and far-reaching influence on international affairs, committing a new global community of mortars, supporters and advocates. more than two decades this community has been bound together by shared grief as well as a common resolve. each year on this day you have signaled your determination to carry the memories of your loved ones forward and keep the story not only of how they died but

most importantly how they lived. and keep that story alive for future generations. each day of this nation's most hallowed ground we remember and paid tribute to each one of them. this year we also honor those who have sought justice on their behalf including longtime colleague, brian murtagh. prosecutor for two decades led the fight to bring those responsible for this horrific crime to justice. throughout his career he has demonstrated a deep commitment to integrity, the highest ideals of our nation's justice system and the aggressive pursuit of terrorist threats. his leadership and his unparalleled dedication to this investigation have been an inspiration to all of us. in the months ahead, his examples and contributions will continue to advance his work. let me assure you this work will

remain a priority for the united states department of justice. as we pledge ourselves to this critical efforts that affected the lives of those no longer with us, let us draw strength on the fact that what has guided his community through the past 23 years let a summoned the spirit of unity that allowed this nation and our international partners to whether cal was storms and let us do everything in our power to ensure that in our time, in the lives of our children and in the work of future generations, the story and memories and legacies of those we lost will never be forgotten. thank you. [applause] >> okay. here i am trying again with this microphone. first of, i want to thank all of

the readers. some of them are family members, but there were eight from syracuse university, remembered scholars and one lockerbie scholar. they came down and we really appreciate it. they were not even born yet in 1988. thank you. i would like to now introduce robert mueller, director of the fbi. he is the sixth director of the fbi having served for ten years. he was asked by president obama to serve for an additional two years. director mueller has spent the better part of his life in public service. he has served as a litigator and u.s. attorney and acting deputy attorney general for the department of justice. for about his career director

mueller has been a champion of justice in the rule of law. he has been a tireless advocate of those we lost on this dark day 23 years ago and a strong source of support for those of us here today. please join me in welcoming robert mueller. [applause] >> thank you for your kind words. i am most particularly thank you for the work your organization continues to do to seek truth and justice for the victims of pan am 103 and their families. i am most humble to speak before the loved ones of those we lost on that terrible day 23 years ago. the events of december 21st, 1988, opened a wound in your hearts that will never heal. no words we speak today can

lessen the grief you have lived with since that day. nothing can make a pretty enormity of your loss. there is never closure when one so cruelly loses a beloved husband or wife, father or mother, son or daughter, sister or brother. and yet while fair never can be an end to your loss and your pain, the families of pan am flight 103 know the pain and loss are not the end. you know that those who committed this do not have the last word. we have chosen to remember your loved ones, you have chosen to seek truth and justice and to worked tirelessly to ensure that others will never face the same experience. you have helped us to improve aviation security and to

increase the support we give to victims's families after such devastating events. all of these ways, your courage and perseverance have inspired us, have inspired every public servant who has worked in some way on this investigation. your example has become more important to us in the decade since the attacks of september 11th. you have shown us how free peoples can and must respond to the surge of terrorism. we must always seek justice and no matter how long it takes. we must remember those we lost and we must live without fear as we work for a future that is free from terrorism. may your loved ones rest in peace. may god grant you peace in your hearts and may we never tire in our efforts to build a world that is safer and more secure.

thank you. [applause] >> frank mulholland has the lord advocate since may of 2011. he was solicitor general for four years before that and prosecutor of some 30 years standing. his first year as florida advocate, he has committed to attending this memorial service. he has a longstanding interest in the lockerbie case. following recent events libya, steps along with u.s. colleagues to gather evidence to bring others to justice and demonstrate his sympathy and support to family members. [applause]