Zhu Guangyao, former vice minister of the Ministry of Finance: We need to face the problem. Cryptocurrency is crucial to the development of the digital economy.

Editor | Wu Blockchain He Yi, male, Han nationality, born in July 1953, a native of Beijing, joined the Communist Party of China in June 1987, started working in July 1970, graduated with a master's degree in economics from the Fiscal Science Research Institute of the Ministry of Finance. He has served as Deputy Minister of Finance, member of the Party group, Deputy Director of the Office of the Central Financial and Economic Leading Group, and State Council Counselor. (Source: Baidu Encyclopedia) The host is Ju Jiandong, a lecture professor at the Tsinghua University PBC School of Finance. This article is He Yi's speech at the 2024 Tsinghua PBC School of Finance Chief Economist Forum on September 28th, with content extracted from 1 hour 28 minutes to 1 hour 39 minutes. The complete video content link is as follows: https://www.bilibili.com/video/BV1KixTeXE1h/?spm_id_from=333.337.search-card.all.click&vd_source=a82952d77a603c516555a4a1d97765d5 Host: Under the competitive situation between China and the United States, what risks do we face in the infrastructure and digital currency of the digital economy? How should we make efforts? He Yi: The current development of the digital economy should be said to be leading the overall trend and trend of global development. With the breakthroughs in artificial intelligence this year, I think we have already entered the fourth industrial revolution, or the fourth industrial revolution has already begun. This time, China is indeed in the first echelon, or it can be said that the United States and China are now leading the development of the digital economy. Of course, we have to acknowledge the gap between China and the United States, that is, in the 0 to 1 aspect, the United States is still playing a leading role, but China has the largest application scenarios for the digital economy. Moreover, in some innovative fields, in the cultivation of talents, and in technical experts, we have indeed also accumulated a relatively solid foundation. Everyone can see that the recent research report on the digital economy and productivity competition led by the former President of the European Central Bank, Draghi, clearly states that there is a gap between the United States, China and Europe, so Europe must increase huge investments to catch up. As for the infrastructure, the front-end is the mobile phones we all use, and the key infrastructure at the back-end is the data center and the optical cables that guarantee the operation of the network. The cross-state optical cables are crucial, and in the context of globalization, now more than 99% of the data is operated through submarine optical cables. Now the top 20 supercomputer centers in the world, we have three, the United States has 17, Europe has none, and Japan has none. So we are now in the first echelon, this is indeed under the guidance of the new development concept of innovation, coordination, green, openness and sharing, the great achievements we have made since the 18th National Congress of the Communist Party of China. But the challenge we are facing now is that the United States passed the Clean Network Plan in 2020, and a key area that is still being implemented is submarine optical cables. Now the United States is trying its best to force US companies not to cooperate with China, while Chinese companies have huge engineering capabilities and construction capabilities, but they are obstructing them in every possible way. The United Nations now has clear data, that is, 49% of the global data exchange is currently in the United States, 24% in Europe, and 22% in East Asia, of which China is 9%. But if you cut off this cross-state network, that is, make the United States and China decouple, then the United States will suffer a 12% reduction, while China will drop from 9% to 7%, which is a huge loss for both sides. In the next ten years, the fourth industrial revolution driven by artificial intelligence, affected by this decoupling, there will be two parallel markets and two parallel supply chains. The International Monetary Fund estimates that the loss of global economic total is 7 trillion to 12 trillion, which is a huge economic loss. Just now I reported that the global economic total last year was 105 trillion. Such a huge economic loss, no country can bear it alone, the danger is extremely great, so we must return to the process of globalization, and the major economies and important economic policies must communicate closely. Now a special asset of the digital economy is Bit, which has been considered the first by the United States for more than a decade, and it has a huge destructive power for international anti-money laundering and international anti-terrorist financing. Secondly, due to its violent fluctuations in value, it has a huge impact on the international financial market. But this year, the US policy has undergone a major evolution. First, on the Republican side, the Republican platform and campaign platform clearly list the development of Bit as its campaign platform, and also clearly say that they must exclude China. Trump openly said in the election that we must embrace Bit, otherwise China will replace us. His vice presidential candidate Vance himself is a venture capitalist and owns a lot of Bit assets. Trump said that on the first day of taking office, he would fire the current SEC chairman who is restricting the development of digital currency, but this chairman approved 11 Bit ETFs to be listed on the New York Stock Exchange, the Nasdaq Stock Exchange, and the Chicago Futures Exchange in January this year, which marks the US government's recognition of the legitimacy of Bit. By July, the second one, Ethereum, was also listed, so even if it was criticized by Trump as imposing various policy constraints on the development of Bit, the current SEC, SEC Education Commission, and the entire Biden administration, their attitude has actually undergone a fundamental change. In emerging market countries and BRICS countries, in September this year, Russian President Putin officially approved Bit, and South Africa, Brazil and India have also started to do so. So now if we say the development of digital currency, Bit, it does have negative impacts, we must fully recognize its risks and harm to the capital market, but we must study the latest changes and policy adjustments in the international community, especially the impact of various policies of the two parties in the United States, because it is a crucial aspect of the development of the entire digital economy. Host: We recall that before 2015, China's digital currency technology was leading the world, when we were mining. Now 9 years have passed, how much do you think we are behind? He Yi: In fact, it is closely related to the development of chips. What were we worried about before? One is the serious impact on anti-terrorist financing and anti-money laundering that I just mentioned, especially the violent fluctuations in the capital market, does this Bit have it? Yes. But how to solve it in terms of supervision? It should be solvable. Our current gap is that you don't participate, but as I said, even if you restrict it so much, there are transactions through underground channels, but you don't have the ability to utilize the production, because it is legally prohibited, so we need to study new problems, that is, a communique of the Central Political Bureau meeting, to face the problems, we come to discuss and solve them. Host: So we are "far behind" in the field of Bit, we have completely divorced from the global development of this market, we can discuss it later, this may also be one of the horses galloping in the future.