Zhu Guangyao called for attention to be paid to the study of the development of cryptocurrency, "It does have negative effects, and we must fully recognize its risks and harm to the capital market, but we must study the latest international changes and policy adjustments because it is a crucial aspect to the development of the digital economy."
Zhu Guangyao: Indeed, the current development of the digital economy is leading the overall trend of global development. This year, with the breakthroughs in artificial intelligence technologies, I think we have entered the fourth industrial revolution, or the fourth industrial revolution has begun.
Well, this time, China is indeed different from the past three industrial revolutions. We are in the first team and the first echelon, or the United States and China are now leading the development of the digital economy. Of course, we must admit the gap between China and the United States, that is, in the aspect of 0 to 1, the United States is indeed still playing a leading role. However, China has the largest application scenario of the digital economy, and we have indeed accumulated a relatively strong foundation in some innovative fields, talent training, and technical experts.
As you can see, the EU's recent research report on the digital economy and productivity competition chaired by former European Central Bank President Draghi clearly stated that there is a gap between Europe and the United States and China. Therefore, Europe must increase huge investments to catch up, but I think in this process, the overall development trend of the digital economy is now in the next ten years, and it should be said that the fourth industrial revolution is in full swing.
Because when it comes to infrastructure, the front end is the mobile phone that everyone uses, which is our platform. These are the front ends. However, the key infrastructure at the back end is the data center, which is the optical intercontinental cable that ensures the operation of the network. It is crucial. In the context of globalization, more than 99% of intercontinental data is now operated through submarine optical cables. But in this regard, the United States now has 3 of the world's 20 largest supercomputing centers, the United States has 17, Europe has none, and Japan has none. So, we are now in the first echelon. It is indeed under the new development concept and the guidance of the innovative theory of "innovation, coordination, green, openness, and sharing" that we have made great achievements 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, which was hosted by the Trump administration at the time, but it is still being implemented. A key area is submarine optical cables. Now the United States is trying every means to force American companies not to cooperate with China. At the same time, Chinese companies have huge engineering and construction capabilities. However, they are trying every means to block it.
The United Nations has clear data that 49% of global data is exchanged in the United States, 24% in Europe, 22% in East Asia, and 9% in China . However, if you cut off the intercontinental network, that is, decouple the United States and China, then the loss to the United States will be reduced by 12%, that is, 49% to 37%, while China will drop from 9% to 7%, which is a huge loss for both sides.
If this is the case, the fourth industrial revolution driven by artificial intelligence will be affected by this decoupling in the next ten years. Two parallel markets and two parallel supply chains will cause a loss of 7%-12% of the global economy, which is 7 trillion to 12 trillion. I just said that the global economy was 105 trillion last year. So, such a huge economic loss. Therefore, no country can bear it alone. It is extremely dangerous. Therefore, we must return to this globalization process, return to major economies, and communicate closely on important economic policies.
Then, another aspect is what the digital economy brings. I just talked about infrastructure, and now there is a special asset in the digital economy - cryptocurrency. For the past decade or so, the United States has unanimously believed that:
1. It has a huge destructive effect on international anti-money laundering and international anti-terrorist financing.
2. It has a huge impact on the market, because the sharp fluctuations in its value have a huge impact on the international financial market.
However, this year, the US policy has undergone a major evolution. First, the Republican Party platform clearly listed the development of cryptocurrency as its campaign platform. At the same time, it also clearly stated that China must be excluded . Trump also publicly said during the campaign that we must embrace cryptocurrency and deny that China will replace us . His vice president candidate, Vance, is a venture capitalist himself and has a large cryptocurrency asset.
Trump, the executive branch, the Biden administration, said that he would fire the chairman of the current SEC, which is restricting the development of digital currencies, on the first day of his inauguration. But it was him, the current chairman, who approved 11 Bitcoin ETFs in the New York Stock Exchange, the Nasdaq Stock Exchange, and the Chicago Mercantile Exchange in January this year. This marks that the US government recognizes the legitimacy of Bitcoin. In July, its second ETF, Ethereum, was listed again.
Therefore, even though the current Securities and Exchange Commission in the United States, which Trump accused of implementing various policy restrictions on the development of Bitcoin, and the attitude of the entire Biden administration, have actually undergone a fundamental change. Then, in emerging market countries, in the BRICS countries, in September this year, Russian President Putin officially approved cryptocurrencies. In fact, South Africa, Brazil, and India have already been doing it before. So, if we say that the development of digital currencies now has a negative impact, we must fully recognize its risks and harm to the capital market. However, we must study the latest changes and policy adjustments in the international community, especially the impact of such policies of the Republican and Republican parties in the United States, because it is a crucial aspect for the development of the entire digital economy. Thank you!
Ju Jiandong: Thank you, Minister Zhu. We recall that before 2015, China's digital currency technology was leading the world, and it was called mining at that time. Now nine years have passed, how far do you think we are behind?
Zhu Guangyao: Now it is actually closely related to the development of chips, because if you don't use it, what are we worried about? One is what I just said, that was repeatedly said by the Americans and us at the G20, just now anti-terrorist financing, anti-money laundering has been severely impacted, especially the violent fluctuations in the capital market, is there this? Yes. But how to solve it in terms of supervision? It should be solvable. Our current gap is that you don't participate, but I said that even if you restrict it so much, there are transactions through underground channels, but you don't have the ability to use production because your laws prohibit it . So, we have to study new issues, that is, a communiqué of the Central Political Bureau meeting, to face the problem, let's discuss and solve it.
