mr. fang: maybe there are two factors. one is that china is in the midst of transitioning from an economy relying heavily on investment and exports, to an economy more reliant on domestic consumption. in this transition, a lot of assets get revalued in the process. i think this is the primary reason behind volatility. another factor is, the fed raised interest rates not long ago. a lot of emerging markets didn't perform very well. domestic reforms got stalled. you have the combination of chinese transition plus international influx. that caused volatility. you asked my a lot of volatility right at the beginning of the year. usuallyice adjustments run by steps. it does not go away smoothly. we just hit that step at the beginning of this year. guy: met him -- francine: ms. lagarde, is there something we have learned about what the chinese are trying to do? ms. lagarde: at the imf, we don't look at the last two weeks. i'm a little bit embarrassed to comment on the last two weeks. i'd like to go back to more basics. second, or

now, as mr. fangre, i would just like to remind you, that the promise of the board is not that style of stock exchange, that would enable the smart, medium sized enterprises to be listed, to get funding without producing profit. a lot of the companies listed on nasdaq are not producing profit. remember. and today, in china, if you are an amazon, and you can be as good as amazon, but, if you do not produce profit, you're not qualified to be listed. now, that commitment has to be, you know, has to be kept. i think that the government came out. the policy makers talk a lot about the fourth board is going to come out. we'd love to see them coming out as promised. probably the fourth quarter of this year. i have a company i need to float it, and i expect you to come out with good news. [laughter] ♪ ♪ francine: on to another point, we have some news. the imf opened its selection process for the managing director, when your term ends in july. you've had the support of both france and the u.k. do you want a s

especially the policy makers, like mr. fang, and it is important to include these s.m.e.'s. reduce your volatility. francine: a comment? mr. xinghai: i agree that the s.m.e.'s are a great contributor to chinese growth. our stock market should have done a lot more to support growth. it is doing quite a lot, by the way. i mean, just take last year. people focused so much on the jy rations in the stock market last year, but, last year, the chinese stock markets raised $1.4 trillion imb, in money for the chinese companies. that placed the chinese stock market number one in the world. yet, we can certainly do much better. and just one, you know, very short sentence about financial risk. china's different from other developing countries, in the sense that our growth is largely fueled by domestic savings, by domestic capital. that gave us a confidence in our ability to deal with whatever volatility and risk is coming out of the financial market. if china was a country relying largely on foreign capital for growth, you bet. any major financial risk can derail our growth. china is di

francine: that was fang mr. xinghai, vice chairman of the chinese regulatory commission.about china. tom si is with me. in this panel, we try to figure out where growth is going. we talked about the fed. but on the regulation, there seems to be a market difference. so, the market is pricing in a yuan devaluation which probably makes -- which policymakers say they will not do. tom: the communication is interesting. everybody talks there book. even madame lagarde talks her book. what i found so interesting is very much on topic. and i thought the regulation china, he was talking his book, but he was very clear 0-- no we don't need a lecture. francine: when i asked him about transparency, he said, i'm on your panel. tom: jonathan spence has 800 pages on transparency in china. francine: we have a great lineup coming up. th highlight would bee the governor. from the university of chicago and the public service -- in inda. -- in india. to bring his academic ability to where we are with the second day of market volatility. francine: and structural reforms in europe and elsewhere