raising of interest rates so i asked you do we even have the wiggle room if you will in terms of he cutting rates where they are? >> no, i think you could look at the -- level of interest rates, and compare that to zero. and think about that times duration of the assets, and that is the power that you can have in having financial assets impacted by easing monetary policy then to have you ask in terms of balance sheets how much can balance sheets be creased what would with be purchased, so on. so we what scares me the most, longer term, is that we have limitations to monetary policy our most valuable tool important limitation to say the effect at the same time we have greater political and absorb antagonism, the next o downturn in the economy

worries me most i think there are a lot of parallels with late 1930s, 1929 to 1932 a debt cries interest rates hit zero then a lot of printing of money purchases financial assets drives prices higher creates poll are aity populism antagonism we had phenomena of rising power like china dealing with conflict of existing pour these political issues are very connected to economic issues in policy so i think that that is the character of the environment we are in. >> you were ran bundes bank for a time i want your take on central bank policy your assessment of china in december your firm announced you can in fact own a bank in china you announced in december so we will get back to that assess the story as

you heard ray discuss in terms of of traditional banks the ability to react to a slowdown, at this juncture. >> ray made very important distinction between structure and business cycle i think that is important. structurally interest rates most western world as we bounce back from the -- you know financial crisis, were very low very long, markets got used to that i think actually rates for at least for the better half of the last five years are have been too low for the environment economic environment we have been in ray mentioned the other point congressional banks waited very long time keeping rates low, because they were not gearing he monetary policy towards expected state of economy rebound of growth but in kind of insurance policy, where they want to mitigate any risk are there kept rates longer just to eliminatate to economy

whether they started lifting rates tightened in late cycle stage the impact of that is that you look at monetary policy easing if you look at room to maneuver the only central bank that has any room to maneuver is the federal reserve, if you look at traditional policy moves by fed lower rates, very frequently, relatively largesteps 50 basis points fed can do a number of interest rates steps down if need be so i am not worried about room to maneuver short term but as ray also said given that we have had so low rates long the hashth has not prooifd in higher rates if anything towards neutral not quite neutral but close to it so going back down, is an emergency measure they can take i think more likeable the year ahead on course now i think going through a soft spot in the economy, and numbers have weakened, both in

emerging markets and dwellevelod first quarter continuing into first quarter this year after middle of the year hope that that might be behind us, that is not the point formont policy moves from tightening, to easing that is the point monetary policy takes a pause data dependent move into wait and see attitude i think think expect onor two rate hikes by fed this year but i think will take pulse look at data if and when they resume in my view won't be before mid year then i think rest very much depends how current conflicts that we haven't talked about the trade war, some of the other tails risks brexit how that affects globe economy spillback into u.s. how monetary this affect that in united states the downside of being on hold ecb

will in every leave negative territory if they don't start raising rates this year we still think there is some expectation that towards the end of the year they might do a 25 -- 20 basis point rate hike chances with european data weaker french weaker german weaker eurozone dent look very strong expectation is more likely to postponement that into next year so i think, in general, monetary policy normalization is not an issue for this cycle, it is for the next cycle they won't get it done this time because the economy is weakening, so i think it will be mission aaborted look at normalizing rates in the section cycle and react to slowing economy over the next year or two by a more muted cautious more data driven approach. >> should fed slow down on unwind 50 billion dollars a month fed signaled in terms of selling securities. >> i think the unwind is less an issue in the united states than it is in other

constituencies structurally the fed used to have a balance sheet 750 billion. long term i don't think the fed will go back to old size of balance sheet the central bank balance sheets much more central part of financial markets and may be a multiple of what we saw in central bank balance let's see then i think what the fed needs to do is really look at sort of is that different role that central banks now have in global economy where markets are looking very much for monetary policy as very often only game in town the position banks want to be in chinese friend said the right thing if you look at macropolicies monetary policy can react quickly, by committee, elected bureaucrats the bigger impact you get from fiscal policy reagents slower, parliament -- ath longer much more impactful the structural policies don't moreget supply-side china at the

moment is reacting with measures easier fiscal policy the more important that china is taking supply-side before open markets creates growth potential creativity announcements, so along what ray said we are too focused on managing demand and managing sort of you know cycle movrment we should be locality more focused own longer term central issues getting those right because i think if other stuffy is very much a distraction, you can't spend time and money to pushing the economy against the downturn but much better to enhance growth potential downturn doesn't lead to such big reset every time it happens and it happens time and again. maria: let's stay on this point in terms of china central changes that we're seeing the impact on the rest of the world your thoughts? >> show the let us be reminded that only two years ago, china

was considered to be a ticking financial bomb. so what we're seeing, as recent slowdown, is since a consequence of the governments governments very successful effort to deleverage, so we look at the kind of deleveraging difference sectors financial delefrmgdz successful most debt to assets staib lived, debt very low one can argue too low for a while in china efforts have made china financially much safer, as a consequence there will be a slowdown that economic growth, part of it is, of course, kind of triggered by external factors much is deliberate effort of the government to slow down credit growth, now, of course, growth has not become more of an issue, the government is always treading between, the

line between financial risk and economic growth now they are shifting their focus more on revamping the growth as you know mentioned china has a set, whole set of tools, that are not normally available to other economies whether it is a massive assets on government balance sheet or huge amount of savings, in china or just simply coordination, coordination of state owned banks state owned local governments, all these things matter. that said, despite the fact that there are a lot of the instruments to work with i think china's main challenge is really how to unleash the real potential of the real economy. right now, monetary policy is expanding ingesting more liquidity pushing for proactive fiscal policy reducing taxes stuck in

financial sector if you go in real economy confident big forces of positive changes for chinese economy whether entrepreneurship innovation the fact services are rising service productivity rising organizations the trouble is really financial system how to match investment and savers and give the household more ability to consume if you are if the real interest rate on bank deposits most saving is stock is earning zero in last 10 years 20 years economy growing at 6 to 8%, you are not using that potential to the household to private sector so it is all about unleashing latent dynamism ins private sector. >> do you think opening of markets do you think the trade issue, with the united states, will in fact impact the real economy in china. >> i think that trade war has come as a benefit in disguise

the external prern for china to undertake important reforms as i mentioned financial services has opened up whereas really kind of on schedule to open up a vastly, consumers are now able to purchase many more goods from the u.s., and from the rest of the world, china needs competition, so the financial sector neithers competition to be inwith new blood opening in general consistent with china longer term goals, is simply accelerated by the recent trade war. >> you want to say something. >> yes, dr. weber, had a very good point that is as china right now seems to focus on you know, macromanagement the surprise side policy, supply-side policy not stopped we continue to push forward for supply-side because

supply-side structural reform i give you example open up financial sector for international competition one example, and manufacturing sector basf was given the opportunity one hundred percent owned massive petro chemical plant in china, they used to be ab 50 -- requirement now this requirement is gone china has reduced, input duty in substantial way so more competition in the consumer market. so you know, the supply-side policy continued, that is very important point. and you know just to this audience i want to say in other words, that china vision for the economy is to make it open, and large and competitive. so it is not only an opportunity for the chinese companies but, you know, also a huge opportunity for all the companies from the world.

maria: but have been in china 30 years you have been visiting there 30 years, actually your firm just announced you now own a financial institution that you own 51% of that right. >> yes we were the first bank that was offered a 51% stake, in a joint venture, and we have executed that in december, and we now are majority owner already had management control, and we are now free to increase that stake further. and i think eventually as we invest in china, and since our major partners are the municipalities of beijing and shanghai likely going to have deloougs we are looking at raising locally so there is welcome discussion between chinese authorities, much as with hong kong on the shanghai composite bond connect discussion with london i know that the the doctor is talking to swiss authorities the more we can connect stock markets the more we can actually be

super connectors of international finance institutions to bring international investments into the chinese economy and help chinese investors invest in the rest of the world it is absolutely right what our chinese colleagues have said the chinese economy needs competition. and they are working i think on three legs of that first is state owned enterprise reform i think that is very important, and we've gone through that in europe were in 90s having former official sector como con dplamrates to private sect the second one competition between say it enterprises in china and third open you are chinese economy for international competition that will really be a major contribution to increasing the competitiveness of companies we as international experienced investors can help in that process, and actually can help chinese investors,

internationally and international investors in china banks like ubs we have 24% share on about asia market in hong kong shanghai composite so we are kind of go-to bank, for a quarter of the investors into mainland china internationally our market share for chinese investors southbound is one percent not go-to bank for international investments for chinese citizens, and as we are granted majority rights as we are investing in our business, we just doubled our head koubt in china last few years, we will become a major go-to partner also for chinese investors, in in global economy but that will happen at a more measured case because there is some concern in china, that this will impact on the exchange rate so opening up process, is more controlled, but it is happening you know don't mistake speed for direction. the direction is very clear. the speed i think has been really sort of increased recently actually i was in

china first weekend constructive dialogue on totally different page than few years ago i am very confident about this -- >> let's not forget of top 20 banks in the world top five are chinese. >> you mentioned, i have been there 30 years watched it evolve two types of things going on short term and long term, right as i said productivity is the big thing in the short in the long term that is raleal big thing then short-term debt cycles two things happening short term, is that you are having dee leveraging you dealt with there was overleveraging and development of financial markets. when i not long ago it was really, five or six years ago, five major banks loaned money to state owned enterprises the money was clogged at the top then the development of the shadowed banking system and

liberalization of that and now put into place regulation, whenever you are having a deleveraging that is something that makes the country healthier cars you are deleveraging but has short-term effect a long term positive so there is deleveraging happening short-term thing, and then there is the trade issues associated with that also a short temperature thing but if you take productivity growth, if you take the approach, i think it is it -- really has to beed a mirerred admired chinese are characteristics top down a cultural challenge for the west but there is a top-down way of setting a mission for 2025 plan or a plan and working those things in the top-down way, with unique resources available, that has produced in the time that i have been there, you know, increase of 20 times in

incomes the movement of used to be below property level 88% population below poverty level today less than 1 percent there is an ability to produce productivity but it is a culture clash with the west, in some ways, because there as one of leaders described to me united states is a country of individualists, individual is working that up, china is more of a country of that is an extension of the model of the family, and you described you said there's the word country, in china, represents state family if you go back to confucianism, top-down, that is where there is an element of a culture clash. at the same time when you look at that productivity, and the policies and things, it is a very effective place so i would say it is important to

dwaish short term influences from longer term productivity influences recognize we are in a world where there is a competition, and that could mean conflict in different he dimensions between two countries that means i think trade issue is a manageable issue i think the way of being issue is a challenging issue because you can't expect americans can't expect chinese to operate in a way that is different from that or vice versa so i think that is the bigger long-term issue but i think you have to be very optimistic when you think of -- even a five or six percent great growth rate with a that is going to mean the world will look like 10 or 20 years quieted a different world in which china is goinging to be i think a lot stronger let's nots confuse short term with

longer picture. >> how worried should we be about debt particularly u.s. has to sell dent china one of the biggest significant holders of the u.s. debt are any of these issues, in terms of the trade spat in terms of slowing growth in china are they impacting capital flows? >> you know china will continue to be a what we call savings surplus country for sometime. although the saving is us declining, but will be a saving sur+ country we have to invest abroad u.s. bond market turned out to be good place to invest i don't think china will in any way significantly reduce if you asked me into u.s. government bond market. on the other hand, in terms of capital flow, you know we do

open up, we want more companies from different sectors to come into china. so that should increase capital inflows, you want increase both way, and i want maria at one point what ray said about cultra shock china has different approach to economic management i think at this world, perhaps we should learn from each other, a little bit. i want to give you an example how we manage our financial risk, over the last 40 years in china hasn't had -- various -- for example, that is very rare among developing world i used to work for the world bank, you know we have financial crisis in developing countries a lot. and how time has been able to avoid financial crisis, in the last 40 years, we have a very

kinds of top-down approach to financial risk management. and that is the a central government constantly is in touch with financial sector, information from financial sector in timely manner and risk accumulating the system government will step in, and order the risk to be reduced. now, of course, sometimes we will still miss something right so occasionally we have financial -- in the market once we have that financial jittery our system is able toll react to jittery in a very quick way and we move quickly to contain the risk so that the risk does not spread into the entire system, and does not create panic in the system, and then as the economy grows, right the risk you know, is diluted going forward, so that is how we have been able to grow our economy, by so much, and grow

the financial system by so much, without you know, incurring a major financial risk so there is some lesson there, i think that you know the rest of the world should take a look at. >> i think if i may there is a points of no return in this whole thing about opening up the china -- because you have to look at china's in global economy has increased massively china is bordering on at least 20% weight in global economy exports global growth still today most of the growth that we see globally is generated by china inclusion into world economy that is reflected by putting china a lot more into portfolios you can't just have a big part of the global economy be chinese investors haves exposure to that growth in portfolio, china gets inclusions into -- equity indices bond indices

like bloomberg does our estimate is over next quarters there will be 250 billion, of capital inflows into china. just by 4% tolerate china will get so far rates absolutely ray china debt not a problem domestic policies redistribution of debtor can be reengineered international investors if they invest in china death or equity want different standards accounting they want very clear, solid products vested so what is happening is that will raise in bars for equity markets in china because you need to bring international investors in, and also need to allow because you just don't want a big inflow into chinese economy that puts upward pressure on exchange rate you need to open up and think international investments for your citizens, to invest in the rest of the world, so you create capital outlo in future

debate about about qe, will be more interlinked large banks like us compete at top level will have to do both if only action not just one-sided bringing international capital in pgs having chinese reinvest abroad will not have impact what we do on policy prefrngs, no impact on exchange rate i think there is a point of no return, where you simply want to open up, included you get drawn into global economy where i think you really need to supply-side he reforms to do that in more resilient manner i am not worried about sort of credit cycling at the home the chinese central bank can create more monetary stimulus without touching interest rates, 23% i think last month i saw you can massively reduce requirements for domestic banks create

credit origination without doing anything. >> this point of no return opening up -- the main reason that is opening up is good for china. you know you he mentioned, the asia inclusion into the index, and the effect of that inclusion is already felt in chinese market in terms of raising the quality of the market because do not have to respond to demand of international institutions investors so give you a very concrete example in shanghai stock exchange we used to calculate the closing price of a stock, by its last trade, that is not very good. for international investors now we according to their request we have a changing of that into average price of the last three minutes in trading manner now much better according to the international investors so this is very small example of how opening up, has been good for china,

and we will continue to do that. >> a i would like to push back on a little bit at this point. if we look back, you know maybe 200 years back this century financial history might well be by china -- now, not just a question whether china is ready or a not. for epg up talking about opening up to trade but opening up capital accounts, the question is is the world ready snp let us be reminded that china is still in developing country with financial system with a whole array of issues. because of the weight it has in economy because even so far it hasn't opened up in other financial link average es aifrj this will turn in growth proportions 201520, 17 small movements in china in jitters to financial markets now imagine a really open chinese

market. the point behind this is should china not consider domestic financial reform sort of domestic issues first before thinking about really wide scale opening up in which case the financial link is stronger the second he largest economy in the world the one transmitting volatility is still a developing country that is the first point. the second is we talked about how most agree debt problems in china are within you know management i would agree would i say definitely the same but it is really about how this debt view how credit is used. since 2009 -- renminbi stimulus led to growth misallocation of resources not so much the level of debt the

economy but where it is going is it going to big soe's low productivity firms infrastructure projects or is this credit channeled to productive parts of the sector? now if in research can be used there is normal poerm for china to potential for china to continue to grow. >> laflt i want to point to two factions that that we the recently seen for the first time, in decades, in first 2018, china is now importing more from the world than its exporting, that has huge implications, now two gentlemen on my left have talked about low interest rates, about you know, challenges to monetary policy in europe and u.s., china will source serve as a main source of aggregate demand as we have seen very lacking in rest of the world inflation was not

come up interest rates record levels china will potentially be an important source of aggregate demand going forward now that i am putting more pushing for a divorce with china not necessarily good idea. >> i just want to say, reminded me of responsibilities as china draws more capital into financial markets, the jitters inside china can have huge impact in international world we have great capability to do a better job. i. >> i think we also have to look at what is happening in the light of the rises and declines of reserve currency in the world normal patterns, if you look at it, from the dutch gili d, british pound u.s. dollar china how

countries evolve patterns over series of history, we know that first of all, technology is leading reason for the developments we know that each of those countries has to go global, with their currency and banks, we know that they have to be develop financial markets every one of those has had a financial center amsterdam, london, new york was, and now in china they must have their financial markets, we know that that opening up helps their balance of payments and it will also helps the development of the development of renminbi reserve currency he growing global of china inevitable part of development simultaneously we have to look at united states we have to

think, of its implications there was a cycle, that this happens the rises of these reserve currency happen because the countries become more competitive technologies all those things balance of payments they go global, the declines of world reserve currency happen quieted of an because they have reserve currency there is a lot of lending to them, and in the united states, we have to talk about the united states and the united states debt, about government debt, that we're talking a lot about china, but and that is part of that puzzle big part of that puzzle but we also have a real problem in terms of of the quantity of debt that we're going to have to sell to the rest of the world over the next few years. we have experienced a lot of stimulation because of combination of the tax cuts and stimulation if you do the projections the pro forma projections think who is going to apply that amount of buy that amount of debt the amount

we have to sell i think that is going to be an issue so when talking about balance i think nor willal evolution globization i character china as basically allowing very free markets in many ways within boundaries and then not to let it go outside of that boundary of volatility, so are foreigner exchange policy you will have more freedom boundaries can't go beyond those boundaries you are going to have that globalization you are going do have the development in the currency, and there is a -- a problem or a challenge, in terms of debt which relates to the currency issue, because a bond is a promise to deliver a lot of currency. it just basically a pile of currency spread over a period of time i would say if you were to take lodgeer term perspective two or three or

four years that is going to be an issue, so i do think the capital flows and nature of that balance of payments issue is going to be a factor in the years ahead. >> you want to comment on that before we move on? i want to get questions from the audience i do want to turn back to europe, first can you respond to what what ray just presented. >> yeah, essentially what ray said chinese economy is large whatever happens in china has a lot of impact on the world, and as we draw capital in there will be capital flowing out i think one of the lessons china learned over the last few years that we know that we are a large economy impact on rest of the world is something that we have to take into account. we make policies. so want to make sure that the policy change in china, as well as the economic variable changes in china is not so

large, in terms of big or kind of speed, it is going to have very big impact on the rest of the world we understand that. >> doctor let me ask you before we close the loop on this subject obviously opening up the markets in china appears to be a priority. for the chinese leadership, to the rest of the world. >> yes. >> how much of a priority is the forced transfer of technology and ip theft. >> i am not an expert in this area. you know. the there again forced technology transfer and ip theft, of course, not something we would like to see. we can sit down talk about these things. >> would that be something as far as part of a deal with united states that you would try to make progress on those issues? . >> we are waiting to talk to the united states on every issue that u.s. raises.

and overall objective to have a cooperative relations economics as well as in other areas with the united states. >> this is such a rich topic we can continue talking about it but i want to hear from all of you, because we have such informed experienced group until the audience yes, sir right here. >> please say who you are this is live-streamed on top link world economic forum as well as fox business you should know that i wanted to say that from the beginning. >> -- -- mission driven financial fund investment bank analyst. title of the session rethinking global financial risk, in the west survey came out of global risk three or four out of top five is climate change why was hasn't c word or double cword come up in this is this what

marconi said the tragedy of the horizon of bank of england we had last week pg&e congressional utility company in chapter he 11 to frequent. >> when talking rethinking global financial risk the community that makes up west thinks that is one of the issues of threw or four in the world why haven't you raised that as part of the conversation. >> i think there are a number of issues that we have not raised that limited amount of time and there is a -- i mean, of course, that is going to be a big business issue, i think that is correct we didn't deal with the wealth gap didn't deal with technology we didn't deal with artificial intelligence we didn't deal with a whole laundry list of important things, limited amount of time i guess we became more focused on china but it is an important issue.

>> we will touch as well on brexit because this is another uncertainti uncertainty in europe how much of an issue in europe impacting the rest of the world quickly. >> i think an unfolding story last year i remember when every one sorted of felt that the sky was limit a huge sort of common belief that things could only get better, issue this year i think the moody too gloomy i still have firm beliefs that policy makers are elected to provide solutions. sometimes it is a winding road sometimes there are setbacks, so this has been a pretty volatile o he evolving situation i think ultimately not in anybody's interest to have an unorderly brexit without rules of the game being defined if that requires because they started late didn't gain traction that requires more time to negotiate the rationale thing to do, i think creating p domestic acceptance for a deal

you are about to sign is as important as having the other side agree to that deal with you. and so i think the commission every one should give themselves the time in order to what is a risk for europe i don't see calendar basically triggering exit without really having a solution as wise strategy i didn't think it was a wise strategy at the time, i think we are starting to see that the clock is running out the thing to do when that is the case you are not done is should you stop the clock stop negotiating only then when you've got a deal, i think unorderly brexit is in nobody's interest i take some reassurance by the fact the british parliament is more deeply involved now in these discussions because ultimately the parliament has made clear that we want to move to a new stage, we want to do that in orderly way not doing it without a deal is not something that is the preference of -- >> you any britain leaves european union but dplot in a hard way will do it with well

thought-out trade situation with partners? >> i have been in so many financially rescues 10 years ago, always look very difficult situation 1:00 at night by 2:00 japanese markets opened we needed a solution usually that last hour most things moved, so i am still -- we're still for the almost 60 days away, from that marcher end date i think there will be some dynamics in this in the end i think people have to start making compromises it is toll insist on your position if you are negotiating but in the end if you want a deal he every one needs to compromise i haven't seen compromise on the table so far. >> go ahead, sir. >> quickly my name is mark -- i am the chief of staff of the ifc asset manage company international corporation one thing that we've seen in china, is that reserves have gone down from our own four

billion dollars -- >> four trillion dollars 2014, 2015 now below three so more than a trillion has been spent a lot of that is manage has been spent through some of these sovereign quasi sovereign world funds, cic, men into aid a lot of this money has gone to risky matters. >> i am originally -- worried when i have seen several money going to -- is you ask me, is going to be hard to collect putting it -- my question to the panel if as a result of very aggressive investments very difficult markets africa, in south asia that not all of them will go great if you will see that china will all of a

sudden be borrowing a little bit in the united states style, in order to continue to fund the for example the initiative. >> comments. i think, first, free -- perhaps more than you asked as foreign countries, of course, we can always make better use of the foreign currency, and you pointed out venezuela, countries -- when using wisely or not it remains to be seen. still need some more time we can always make improvement in these aspects. . >> people were complaining china was you know, purchasing u.s. treasurys moving money had to go for higher russian,

you a -- higherrun you are seeing the consequences. >> -- i would like to hear some comments about america especially brazil mexico. >> great question we will hear from -- at world economic forum today 3:30 comments about latin america? >> i think that the cycle in brazil has been a good cycle, in terms of the changes. balance payments become expensive subsidies by government a number of things that created balance payments crisis classic debt crisis exchange rate became very cheap you had funding became somewhat attractive to invest in now we are dealing with political questions that will

come out of that, so i would say you by and large good but questions in terms of political reforms corruption issues all those enter into a picture of what brazil will look like coming forward, so a good track but there is a lot to be seen. >> we will see what mr mr. bolsonaro says today from here in davos. >> yes, sir? >> thank you. i am jacob, jpmorgan chase -- >> talk about fantastic panel. and it was taken for granted that u.s. is ahead of the game in terms of recovery. but i want to make sure that we recognize that it is not just a cycle and just wish to wait and everything else will happen, it is all the results of policies. the reason why u.s.

performance has been so positive reflects corporate tax reform policies concerning capital deregulation to small business and the like not a political the same but a statement that says, you want to see results, you better do some policy it is a corporate sector that does therefore it needs to be not be enemy but the partner, having said all this given that there are so many other sessions still one overwhelming subject that we do not -- a good systemic answer to a has to do with cyberwe do not have international agreements about it and the like, and that is something with all of us are really losing sleep about. >> thank you so much jacob let me resilient some points on this panel does appear we are in a slowing economic

environment, doctor mentioned that 6% growth is still quite attractive, and also, ku made the point china will ultimately be solution for the world in terms of demand and place that we will see many imports coming in china is now, importing more last year than it actually exported, ray day will kuo made very important point in terms of capital flow what your perception is in terms of as deleveraging goes on in china what impact will be on dollar sounds like you will have concerns there you made the point on brexit the point on the european situation, is what that you believe brexit will take place but you do believe calmer heads will prevail it will not be a hard exit? >> at least i hope so. you never know, i mean, but i think it would be completely irrationale to let the situation get out of hand europe has been challenged last decade with homemade problems look at france,

joir joirnl major loirm issues brexit to that mix back for you know years to come i think nobody's interest to do a hasty exit without organized deal so, yes, i hope, and i believe that policy makers will have second thoughts. >> thank you ladies and gentlemen thank you panel have a good day. very interesting panel over the last hour, from davos, switzerland the title of the panel rethinking global finrisk maria bartiromo leading that talk about global economies trade talk about china obviously listening comments about brexit saying he would like to see hopes believes we will have orderly brexit but also i found a lot of interesting discussion about china the economy, 6% from

regulatory official from china talking about 6% global growth in china the issue of chinese economy that they the woman there who harvard educated we should say talked about the fact she believes chinese will continue to buy debt from united states good news for u.s. bond market. >> she is a professor at london school of economics as well, also said trade war a benefit ins isguise to talk about this we bring in in martyr strategist michael will he noble point capital cfo, thank you for sticking with us for listening in, i want to start with you, michael, and let's begin, with china.

mr. fang said economy will slow not collapse maria bartiromo asked very pointedly you seem to be very willing to open up your economy willing to do that, but what about chinese leadership making it a priority to address intellectual property theft, and really skirted that answer michael. >> absolutely funniest point of entire presentation who would have thought that it would be you know trump to force chinese to open up markets i think they've known needed to do this a long time he very much accelerated the process putting all sorts of external pressure on them china has a real issue in turning populace into commutation nati consumption nation, opening up

for wealthy accumulation not by those at top will make a huge differences for them as you heard from every one on the panel the key for china going forward, is to open up their markets, and so china right now is you know, there is no mention of in a teller a communist nation number one enemy of the united states okay? while, while -- that if that were to change it would be because they opened up markets and dramatically you know, centralized power communists give up some sort of control seems consensus only way for china to move forward if china were to do that that economy could take up not only benefit china but u.s. and entire world economy. >> axel weber talked about that extensively opening up marketed to competition said ubs has a lot of employees on the ground, that obviously want to do they want to open that market financial competition i thought

interesting both chinese nationals one said he is part of the regulatory body in china talked about the fact that would be a good thing for the chinese economy all vm i think were very positive about at the long-term growth prospects for china, interesting to hear comments from u.s. perspective, joe as we are in middle, of course, of a trade war with chinese, still unabated. >> well i thought the interesting comment was that the trade bars blessing in disguise for china forcing china more fetch force china to open markets, so financial assets need to flow in and out of china, would be a positive for both u.s. economy and chinese economy, that is contingent on settling trade disputes interesting concept china transferring some financial risk into rest of the world so rest of the world gets not only growth from

china but also starts to assume the risk parity with it. >> we saw michael comments particularly from ray dalio about central banks strains impact of central banks around the world he said he expects central banks to need to easy monetary policy would years' time what did you make of that. >> what i think, that bridge water rdalio don't have correct looking at productivity growth of u.s. secular stagnation argument that u.s. we don't have productivity growth we can't -- we are in trouble raising rates is going to collapse our economy we are going to need to cut i don't buy in any of those i think ignores last two years of policy from the united states, and that dramatically cut corporate tax rate reduced regulations dramatically there has been largest reduction in the size scope of the united states government, the last two years, in history of the united states. okay, this is the key driver

why productivity growth is so low, looks low on paper because you have federaling government 20% gdp state and local government close to 20% productivity growth is negative 60% essentially pulling the horse or horse is pulling the cart for entire one hundred percent of the economy. okay? as that 40% trickles down becomes in other attractive to invest in the united states we can grow, i think their growth estimates in addition to say the imf most world united states, are too low for 2019 i think we are going to start to see -- i think you will see some rate raises this year on back of growth in the u.s., and i -- i would also note that some of the other panelists interrejected we are not near neutral may be close the fed raising rates would

give more dry powder in the event collapse or correction in the system. >> i want to pick up about growth issue because the big news out of davos overnight breaking, of course, was imf lowering global growth forecast for 2019 now say 3 1/2%, it was 3.7%, interesting with christine lagarde comments earlier from davos talked about u.s.-china their forecast had been lower for 2019 now it is even it is at par. so they are actually bullish like the panel maria just hosted bullish on china and u.s. economy. i thought very interesting. >> yes i think a lot of the reduction in growth forecasts are for transitory issues, u.s.-china trade, it is the brexit, it is the -- protests in france, they see are all transitory issues will work they'll out as they work themselves out, then growths comes back into the economies

just an issue about no one knows when those issues get settled what type of economic impact they have while still going on. but as i think they are transitory issues and growth paths return once we get through them. >> the message from davos 2018 was synchronized growth story now that is a synchronized slowdown to pick up on cheryl's question imf forecast of global slowdown to 3 1/2%, they are expecting in this lower forecast that brexit is orderly more tariffs on china i thought that was interesting i will let you pick this up how they foresee major issues in 2019 orderly brexit more tariffs on china. >> i think orderly brexit makes sense that is every one's best interest in europe europe is the one that doesn't have too many cards to play. in the global economic picture. as -- u.s. has dry powder with

fed mentioned by panel china has ability to control their economy the way they want orderly brexit is europe's best interest i think that gets achieved, on the flip side, i think the u.s. and china strike a really good trade negotiations play take till march i think in economic interest of both countries, assume global leadership, differences on trade move forward. >> michael joe we are going to have you both rejoining us for 5:00 a.m. eastern time hour, guys stand by we are going to have a lot more coming up, of course, a lot of great comments from maria bartiromo's panel, davos listening to. >> wraps up special edition we will see you in just a bit. sources say liberty mutual customizes your car insurance, so you only pay for what you need. over to you, logo. ♪ liberty. liberty. liberty. liberty. ♪

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look at the united states. we will be in a slowing economic environment. that growth rate will slow. chief executives from around the world gather in davos, switseswitzerland, he global stk worries slam the u.s. the imf cutting the global growth forecast to 3.5%. cheryl: we're looking at a down market on tuesday. markets opening today lower, dow 134 in the pree market, s&p down 16. lauren: we were higher four weeks in a row. in europe, everything is down. the