[Music] so for this panel the main theme is globalization is it a dream or a delusion why is there so much anti-globalization sentiment to frame the discussion somewhat let me first try to draw a parallel between what is going on and what was happening up to the end of the Second World War as many of you may have read or heard we often refer to this ongoing round of globalization as the second globalization not the first so which one was the first well the first globalization was mainly in the 19th century and technically it ended in 1914 as at the start of the First World War but that ending process continued until at the end of the Second World War but then we can really say that the first round of globalization has really come to an end so today of course we're at this again one big question for all of us is why we are here discussions and views and explanations of the rise of populism and many other things you know we probably are also interested in knowing you know how we are going to go with this second globalization and again also the rise of populism and protectionism and so on right some of you may wonder you know why I say there is a lot of parallel occurrence or change between now and the last globalization in fact actually I can I want to take too much time I just want to provide the framework for discussion you know there's actually warm book not many people know it's called the finance that's called finance in China that was actually published in English in Shanghai back in 1913 so if you can get that book from the Hong Kong new library there is one chapter that starts that's thus with a very interesting description of all the debates and concerns that were happening in China and in the West and other countries about the rise of China and the threat due to the rise of China to the West and also the you know a lot of resentment and excitement as well at the same time about the first globalization so in that book is this it was described that you know the many people in the West felt that you know they were a threat from China was due to the Chinese behind the guns but this author of this book was commenting probably the real threat from China it's not from the Chinese behind the guns but the but the Chinese who can imitate who can make things more cheaply with a lot more manpower as opposed to the deal labor and there are many you know limited population in the West and so on so he in this book Wego a doctor Widow captured this sentiment at that time of course after they start of the first world war as we all know you know it was followed by the stock market crash in 1929 and then there were rise of popular populism and protectionism in the 1930 which did not end until the end of the Second World War so in some ways we're kind of repeating some of the experience during the that period starting from 1914 and then up to where we are in comparison we're about in the mid to early 1930s so I hope we don't can't continue all the way to repeat in whatever form or shape what then happened after the early 1930s all the way to the end of the of the Second World War okay so I'm not trying to scare you but but I just want to mention that while we talk about popular ISM and anti-globalization sentiment it's actually useful to keep this in context so all this panel after this point I'm not going to take too much time so I'm gonna give most of the time to you in the audience and in particular to the three distinguished panelists first I have on my right or my left is William phone dr. William phone he is the managing director of lien or the group managing director of lien phone group and then further to my left is Peter Mathison whom you have heard speaking this morning he is our president and vice-chancellor at Hong Kong new age' is very grateful and you know we owe a lot to his support and his efforts to make AGI really take off and develop and then still further to my left is mr. Jaime Zobel he is the chairman and CEO of a Yala corporation the Philippines so we do have a good representation on the panel so we're I'm not gonna repeat the same format the last format was great I just you getting you more excited again huh so let's change the format somewhat so we don't go to the podium but what we can do what we will do is to have each panelist offer some opening remarks for up to five or six minutes and then I will ask them some questions to have some discussions - and then I will leave all the time - to you for more questions from the audience William thank you professor Chen and good morning everyone professor Chen has asked me to focus on the global trade aspect of globalization you know and I will try to do that very succinctly but most of the really great points have been made in the earlier session but what I will do is focus on trade and and some of the impact of populism on trade which was discussed previously but uh perhaps give a little different perspective and I'd like to couch my remarks in two areas one is the mackerel area of trade and things like a free trade agreements and what the government's are saying especially President Trump is saying about that the other one is more macro micro which is really the impact of technology and innovation on how the business is fundamentally change as far as it affects trade okay on the macro side everybody's probably well aware the the benefits of trade I don't think was ever in doubt ever since David Ricardo and his theory of comparative advantage it was always considered that trade would be good for everyone involved and I think that has really proven to be the case in terms of the last 50 years of global trade and everyone has benefited especially in the emerging markets as markets were opened up in the post-war Britain would institutions as well as the formation of the World Trade Organization and so on barriers came down transportation cost came down the goods so more freely than ever in the last 30 years through the world and as a result the world benefited the developed countries benefited from better price goods which supported the consumer spending and consumer lifestyle and standard living and then the people who manufacture the goods you know in the distributed supply chain that my brother talked about benefited because they now have moved from the agricultural sector to the industrial sector you know and I think that is pretty much undisputed what is the disputer of course is whether the distribution was fair what was distributed what was disputed was whether you know are certain segments of this or community were left out you know in this general uplifting of the world because of global trade and as a result of the populism that has set in and the previous speakers talked at length about that things like the in eco-efficient things like people have lost jobs especially blue-collar work because a lot of the initial initiative of globalization was in global trade and that was really a an arbitrage in wage rates between the different countries around the world as a result a lot of blue-collar jobs were lost in the West ok and they turn to services and I'll say something later at the end which is unfortunately rather bleak you know given what we're going to talk about today but having said that ok the the loss of blue-collar work and but the gain is I think in the rest of the world benefited the whole world in general totally and I don't think that has ever been disputed however because of these inequities because of the differences in in in the in the different countries what we saw was a rise of populism in the last 10 years maybe maybe less about whether trade is good global trade is good or not for any particular country you know in the West he'll be the people who lost their jobs saying that you know we shouldn't have lost the jobs there was unfair competition there was a currency manipulation and so on these are all things that are all part of the repple are the the the the repertoire or president Trump's populist appeal to to the electorate in America and he got elected on the and you know the results of that very clearly the first thing he did and one thing we should always remember is that the president United States is probably constrained quite a lot on domestic policy because of the checks and balances we have in the u.s. the u.s. system however in terms of foreign policy and foreign trade the US president party has more power than most other heads of state anywhere in the world as a result the first thing he did was come out of tbp he's renegotiating NAFTA he's supporting something with chorus there's the Korean agreement and so on and I think that is really the cause of great concern in the world especially for people like us who are advocates of free trade around the world on the other hand you know on the on the developed country side where who does the manufacturing there were concerns about treatment of labor there was concern about factory safety there was concern about use of underage and other you know bad labor practices and that needs to be addressed and it is being addressed of course right now so there there are different views about how how of how a trade is now regarded and certainly was not in the same universal good light that it used to be in although I would say that on balance I don't think it's most people would agree that international trade is good you know an international trade deal should be facilitated but one of the things that was brought up earlier is that the role of government in international trade we were we the role of government is actually very important in terms of keeping the borders open keeping the tariffs low and of course the greatest facilitator of this whole process was a multilateral system under the WTO and that unfortunately seems not to be working and the reason frankly for that and I'll come back to the same theme when I talk about the micro is that things are simply not happening fast enough in terms of the regulatory environment I think the world is moving very quickly you probably heard this cliche many times there is great change in the changes accelerating the same is true on global trade and changes occurring so quickly that governments have a problem coming to a regulatory framework to be able to control properly and this and because as WTO gets bigger and bigger the size of it really means that the whole working of the WTO has been slowed down so the regulatory you know environment is a result concern and I would just flag that for discussions with a group later on now on a micro side what has been discussed was technology and the advance of Technology again you know as a Andrew Sheng and my brother talked about you know the the advent of the change in technology was actually given a terrific boost really only in the last 10-15 years really by the West's reaction to the great financial crisis that happened in oh seven oh eight and I think the the creation of the the use of quantitative easing to solve the problem the the use of the printing press to put more money into the market really created this huge wall of money that has gone into the investment market also because of the low very low interest rates that that made other forms of investment uncompetitive as a result I think what my view is that this wall of money created an environment where a lot of new technologies are tried ok and succeeded one of the characteristics all of these new technologies is that it takes a lot of investment initial investment but once that investment is done a lot of these new technologies take market share and they can ramp up exponentially and very quickly and they take over markets at zero or low marginal costs and as a result what you see in the world today is that these technologies are coming to maturity some of course they're not but the the financial markets took that the ones who did and you're gonna hear from some of the people later today ok they basically dominate the market and I'm not so sure it's a winner-takes-all because behind those early incumbents are disruptors who's going to disrupt them and so on having said that though what it's a good course though is a tremendous change in the way we work primarily in the in the in two areas the first one is in actual manufacturing to the use of robotics and things like 3d printing have totally changed the role of labor in the manufacturing a lot of these goods that are the backbone of international trade that cause for several things that either is going to change the pattern of trade and I don't know if the newly emerging country is now one of the one of the persons in the audience talked about places like Africa and so on they might have just missed the boat a bit because a lot of those things the robotics and so on is good to make the arbitrage of labor less important than he used to be in the last 30 years arbitrage in wages was one of the main reasons why trade took off and probably one of the main reasons why China managed to rise so rapidly in the world so 3d printing still to come but I think that's another thing we should be worth watching for but perhaps more importantly to think the other technology that really revolutionized the world was the internet and the use of thought and that led to ecommerce that led to a lot of changes and that led to really a more direct connection with a consumer and what happens there is that it speeded up the whole process as you know we're in the process of these global supply chains but the speed with which you need to change now is so much greater than it used to be you know in the old days when we engineer these global supply chains that Victor talked about okay that the main concern was costs how do you engineer the most cost-effective supply chain today the main concern is speed how do you engineer the most the fastest supply chain that could satisfy the consumers you know before the consumer change his mind about what he want to buy okay and that speed okay it's what's going to that led to a change in the trade patterns including things like you know nearshoring what they call on shoring which I don't think will happen bringing production back in a lot of areas into the consuming countries okay and then the near shoring manufacturing near the country you are just for quicker delivery time and so on but having said all that okay we're still on the old model the change in the new model really is that in terms of trade is that in the old days all the trade was from the east to the west from the developing to the developed markets the big markets was with the OECD markets America Europe and so on but what has happened because the initial phase of globalization happened happened very well and so rapidly through global trade that the countries that usually involve in the production side have now developed their own middle class their own consumption and that's really that thing that's changing the whole world in terms of trade and the pattern of trade that the China's of this world the India's of this world the Southeast Asia's of this world okay I bring to be the new consumers they're gonna count for the new middle class the new consumers going forward and that changes the whole scene completely including bargaining position you know the the reason why the WTO succeeded in the old days was because the consuming markets were hungry for goods the supply markets were hungry for the little food for for for use for basically the supply markets were hungry for the labor that they could use to supply the consumer markets who want these labor-intensive products to come from somewhere where labor is not as not as expensive but that now is totally disrupted because now the consuming markets and the producing markets sometimes are the same like China for example and I think that will change the world quite substantially and all this they don't 1:1 same the same thing I'm going to say for both the macro and the micro environment is that speed is of the essence speed is what causes also regulatory breakdown I don't think the regulatory framework under which most countries operate can change fast enough given governance the governance and the political systems that we have around the world other than a pure dictatorship can change fast enough to suit the speed with which the world of trade is changing and I think that's the same in WTO the complaint is that so many years now who has five years you know to wait well what WTO tried to change some of the rules about about trade okay who is you know every same thing in the domestic markets you know who can wait now for these technology changes to come in and I think that that is something that I just like to bring up for the audience to consider and to say how there's a regulatory framework that that that the failure which have led rise to this populism okay how can this framework be changing faster as far as the world is changing and I think that that is one of the biggest challenges that we have which is very macro thank you Thank You William finally I can sense that we have a big supporter of the market and globalization because my guess is from the beginning of this morning to at the end of the HR global dialogue 2017 we'll probably hear a lot of support a lot more support for the G the government but I think is somewhat similar view yes William that is maybe a lot of the problems have been more created due to the distortions by government interventions so in that regard you know Hong Kong used to be the most loved economy free market economy by Milton Friedman but of course Friedman is it's not alive anymore but if he would actually come back here today he would be very disappointed just as the bigger GE is played more roles in the economy and society of Hong Kong so now let's turn a little bit to the educational side if I could ask Peter to jump in thank you very much sue so you know I've had the opportunity to make some remarks in my opening comments this morning about globalization and I I'm a fan of globalization but the only area I really know anything about his education so I know nothing about trade you've got you've got other people much better qualified than me to talk about trade so I'll talk a bit about education before I do that I just wanted to make a couple of side remark so in zulus introduction I was reminded of the comment by George Santayana filosophy for about that anyone who fails to learn the lessons of history is doomed to repeat them and that statement is often attributed to Winston Churchill but he wasn't the first one that said it and I just hope we're not going to make that mistake when we come to thinking about globalization that we that we say to learn from history because I think I agree with what Zoo said we should make sure we learn from history and I also just wanted to say so zoo was kind enough to thank me as Viktor did earlier on for my support for AGI I think I've made three contributions to AGI one was to agree with Victor originally that bringing FDI into the University of Hong Kong was a good idea I think that was my first contribution my second I think was to be rather generous to you and give you some very nice facilities in this beautiful building where we where we have our meetings but the third and one of probably the most important contribution was actually to appoint a zoo so he he he didn't really introduce himself but he's the director of AGI I was very pleased to recruit him from Yale just over a year ago he started just every year ago and I think he's done a great job so far and I think the AG i's future is in very good hands with him and i just wanted to make that remark so what is it about universities in the modern world i wanted to just make a couple of comments about the role of universities and maybe make some contrast between asia and the UK where i spent 30 years working in universities and maybe other parts of the world the the thing that universities are having to accept at the moment is that their role has fundamentally changed so universities used to be primarily providers of information so if you wanted to learn about a subject you would sign up to a university and you would learn from the gurus of that subject you'd learn from textbooks you've learned from literature you would go to universities as a way of obtaining information and that's no longer necessary information is widely available freely available so that so the the role of a university is has completely changed compared to what it was like prior to the internet and prior to mobile technology these are now the primary sources of information and the role of the university now is one much more about how to use information how to interpret it how to understand it how to decide what's good information and what's bad information it's evidence-based and what's not what's the difference between fact and opinion and I think the universities need to adapt to that to that change I think universities are not generally agile organizations you talk about bureaucracy and governments well believe me there's bureaucracy in universities as well including this one and so universities need to adapt they need to accept that their role has changed in society and that includes aspects of internationalization which I'll come back to I think the the the second thing is that I've never really subscribed to the utilitarian idea of a university being somewhere that trains people for the job market it's never to me that's not what a university is about a university is about providing education that's about providing to personal and societal development and it's not about training people to do particular jobs I don't think it ever was but it sure as hell isn't now because now the jobs that our graduates do will be very difficult to predict and many of the jobs that our current graduates do probably don't even exist yet so the the statistic that I read recently is that the standard graduate I think this was data from the United States where the standard university graduate will have seven different careers during his or her post university life so we have no idea what our graduates will end up doing we have no idea which career path they'll follow so if we think that we can prepare them somehow for a career path we're sadly mistaken because a they won't stick to that career path impede the career paths that they need to be prepared for may well be something that doesn't yet exist so the the government's like especially publicly funded universities to pay attention to the needs of the employer and I and I don't dispute the value of that I think it's very important you know graduates want to have employment they the one of the primary motivations for going to university in this part of the world or any other part of the world is the idea that going to university will equip you to get a better job a more well-paid job and more secure job so that's a very powerful motivator universities should be thinking about equipping people with generic skills that allow them to be flexible to be adaptable and to be mobile and this is what brings me to globalization I mean I there was a there's a bit of a discussion about whether globalization is is reversible or not I I think in terms of higher education I in my opinion globalization is irreversible I don't think we're going to go back to a situation where information is not freely available I mean all of us kind of looked at our phones this morning and found out what's going on in Zimbabwe you know you you previously you'd never have had a bit of taken weeks for that information to become apparent now it's instantaneous so so the the idea that we can ever go away from that technology or ever go back to the old system whereby universities where the primary providers of information I just think is pie in the sky and anyone that believes that I think is killing themselves so in my opinion the free transfer of information and that what goes with that is also mobility of people I think those those things are irreversible so what do universities have to do in order to adapt one thing that I'm fond of talking about is that universities are extraordinarily resilient organizations if you look particularly in Europe but also to some extent in the United States and other parts of the world some universities are hundreds of years old they've survived wars they've survived societal disorders they've survived recessions they they continue to exist and if you ask yourself why is that the the most charitable explanation is that they contribute something important to society and so therefore they they continue to exist because they're important to the the further development of society and I think in this period of extraordinary pace of change that we'll even talked about universities have to adapt and have to keep up and universities are not particularly good at being nimble or being flexible or changing their mission or changing their ethos and I think that's a major challenge one of the challenges that's going on in the university world is the increased provision of online education and a drive to say why do I need to go to a university why and why do I need to go for so long why do I need to go for three or four years why can't I do it in six months or 12 months by doing it online and I think the there's almost an existential challenge to universities to counter that view and in my opinion the key is research universities are hotbeds of research no online provider can ever mimic the research environment that a university can provide and so universities need to be confident about what they're able to provide they need to be alive to the trends in the world they need to think about what their graduates need and what they what the the world that the future of the world looks like and they need to adapt their their ethos and their and their provision in order to fulfill those requirements the internationalization in terms of what we mean at the university of hong kong by internationalization we tend to think about I mentioned this this morning we didn't think about it as having two components one is that every student that comes to the University of Hong Kong should have an international experience by being here so there should be international students there should be international staff there should be internationally focused curricula such that they're learning about important world topics not just about topics which are regionally important but but our topics which are globally important so that even without leaving Hong Kong they should get a very international experience that's the first component the second component is to do with mobility we believe that every student at the University of Hong Kong should spend time outside Hong Kong and ideally for we've set ourselves a target that for every undergraduates 100% of our undergraduates will have two opportunities one opportunity to spend time in mainland China and one opportunity to spend some time somewhere else in the world we haven't been prescriptive about what that means it can mean it can mean study it could mean dual degrees or study modules or semester exchanges or it can mean experiential learning or it can mean working in a social enterprise or working for an NGO or a charity or e-government it doesn't really matter what they do but we believe that they will benefit from working in another part of the world learning to see things from different people's perspectives and getting outside their comfort zone and living and functioning in in some part of the world that the which they're not previously familiar and we think that that's got such educational value that we want it to be available to every one of our students and that's a pretty ambitious target but we think that there's there's genuine reasons for believing that that will make the the graduates of Hong Kong you better equipped to cope in the the world in which they need to succeed and flourish once they once they leave universities so we are absolutely a hundred percent committed to the internationalization of higher education I think that's important for this university I think it's important for Hong Kong I think it's important for Greater China and for Asia and I think it's it's an absolute mandatory requirement if universities are going to continue to fulfill the role in society that they have so far done for hundreds of years thank you Peter not just not just because you introduced me so nicely but also for more importantly for sharing with us your thoughts on you know Hong Kong use current and future plan how you know we can internationalize the educational experience at Hong Kong you and also more broadly in other countries the more important missing piece that's not so much emphasized in the ongoing debate on globalization or anti globalization is the rules played by universities and other educational institutions so in fact if anything educational institutions have always been the biggest at least one of the two biggest agents for promoting globalization the other agent is business of multinational corporations you know especially for China as many of you know the first graduate first Chinese graduate who went to American universities ever was wrong hole young Wayne in according to the Hong Kong spelling of young wins Chinese name so he graduated in in in 1854 from Yale it took him almost 160 days to come back from New York to Hong Kong but he played a very very fundamental role in introducing machines to China so now we say that china is the world's factory and so on the founding father of China's manufacturing industry it's actually a young Wayne we so so this highlights at the point that educational institutions I have contributed greatly and something that has not been as emphasized so now let's come back to business again Jaime would you like to join us thank thank thank you very much I maybe I'll just start off there's been a lot discussed in the in the last session and certainly both William and Peter have put great steps forward so let me just respond to the issues rather than coming up with a thesis but maybe the start I'm always looking to the place the Philippines in the center of things we rarely are and you mentioned that the globalization started in the 19th century and in the way we see it today I'd like to go back a few years behind that I was reading a small book by Peter Gordon who used to be the editor of the Far Eastern Economic Review now the fun and it's a sliver of a book I was reading it on the plane on the way here by pure coincidence and he said that his view of globalization in the Pacific in particular really started when Magellan as you remember came you know across the US and then landed in the Philippines and then got killed there and it was the start of a of a globalization movement but he believes it really started when a navigator called Andres do Donita close to a hundred years later found the route to head back to Mexico and that really started a circular movement of trade with Goods coming from China moving on to the Philippines and then moving on to Mexico and in the new world and this was back in the 1500s so in one way you could argue that the whole movement of goods and services of course they were happening between Europe and India and China but then across the Pacific it was starting as early as the 1500s and so I'd say I'm a big adherent to the globalization trends I think it's been good for the world as a whole in many significant ways and I I tend to agree with William that from a trade point of view we've all benefited from it and there's quite a bit of evidence empirical evidence to support it maybe one way to add a new element that the discussion is that there's been a lot of discussion about the developed world suffering under this globalization trend leading to the kind of political leadership that we have now and I'd like to look at it from the developing world's angle if you look at the reports in in in in broad general terms you know one has seen tremendous progress in the world because of trade but if you look at the developing world some of the statistics are really just so strong on how its benefited specific countries just taking China and South Korea as two examples in China 680 million people it's been claimed were lifted out of poverty over three decades and in in in South Korea GDP per capita moved astoundingly from just $200 in 1960 to over $25,000 where it is today and so I would argue that the developing world has been a great beneficiary to a system that was encouraged by the developed world and I think that has not been played up enough so there's been two sides of the equation now talking a little bit about cut a country that I know well obviously in my country the Philippines it's just been tremendous to see how both migration related issues something that that Peter mentioned and how services have fundamentally changed our economy so the Philippines is seen as a as an economy that that has profited a great deal from the BPO business and and that's a fact there's about 25 billion u.s. dollars generated by that service sector what I think people haven't fully understood is they still see us as a call center operator we're not we become far more sophisticated than that and with that have come a whole different set of skills that have taken our labor sector up to a whole new level I have so many anecdotal examples I went down to a secondary city of the Philippines Cebu and and I walked into a business processing operation there and I found myself in a room with this is a secondary city in the Philippines with 200 individuals from a university in Cebu doing cad/cam operations designing petrochemical facilities for the Middle East that's just one touch point so here is a secondary city in the Philippines doing sophisticated drawings under the leadership of the Japanese company and in doing intricate engineering design work for for a Middle East operation on another occasion only because we have you know real estate that obviously leases out to to these I have a chance to go and visit them on another occasion I won't name the bank but a major US investment bank basically set up an operation in Makati in Manila and I ran into Ateneo graduates from a local school doing equity analysis you know for this major bank overnight you know to be sent back to New York through telecommunication links and so I questioned the young man in particular and I said you know what exactly is it that you do as part of the equity analysis he said well we have access to the data bank in New York we work on it generally overnight based on the research that's needed and once upon a time we just have to gather the information and put it in a coherent way now we do the summary and actually the only decision we don't make is is the buy and sell part that's done in New York and so again this is a Filipino graduate coming up obviously from a good University in Manila but doing work that traditionally would have taken someone living in New York or living in London or in a developed country doing that kind of work so the argument I'd like to make aside from the service sector and globalization bringing monetary value to a country the skill sets that have come with it have also taken people up to two to a higher level in terms of fist occasion and I'm not adding their issues of medical practice legal work and many others that have elevated this skill set higher the other element which which Peter made mention of is the issue of migration you know migration is it has been a major contributor to the Philippine economy it was one scene I think as a source of weakness in our economy the fact that so many Filipinos have to go and work abroad and they were seen doing you know secondary or tertiary jobs in in other countries but I just wanted to expand on that phenomenon a little bit I always argued more than two decades ago that this is something we should not be embarrassed about it's part of the globalization trend if you can move areas of finance if you can use areas of manufacturing globally why are people not part of that equation why should that be considered something to be embarrassed about what I argued in our country is that we had to basically rewrite their skill sets and put them and and basically take that skill set to a more sophisticated level and take advantage of the service economies globally the Philippine phenomenon is a tremendous one and and back in 2008 when the financial crisis hit many multilaterals the ADB the World Bank argued the Philippines would suffer tremendously during this crisis because the vast majority of these migrant service workers would would would would be basically laid off and would have to come back you know that for the last two decades that phenomenon has never slowed down it's been sometimes they say it is slowing that but the growth rate continues to be there and for some reason Filipino service workers have hit some sweet spot globally almost like a portfolio where were scattered just about everywhere in the world and that has never stopped it's continued to grow sometimes the growth rate has slowed down but it's a phenomenon that's continued and now once upon a time there were construction workers in house helpers but now we have accountants we have managers I was talking about just a couple of years ago to the Ambassador from New Zealand in the Philippines and he said our whole telecommunication infrastructure is being put up by Filipino engineers in New Zealand so just like the BPO business was seen as as is a low-level business the migrant businesses the service workers coming out of the Philippines are now fulfilling higher and higher level jobs in more sophisticated industry so I think there's more than meets the eye to these movements and in the developing world and in globalization has caused you know many positives that that that have not been fully covered in in in this discussion I think one area that that's been of benefit is that domestic and international institutions have generally strengthened you take a group like ASEAN of which the Philippines is a part of I think a lot of people have said nothing much has happened with ASEAN but as far as I'm concerned as a Filipino citizen I've seen our standards move up I've seen our ways of our legal structures our intra trade Arrangements moving up to a level of sophistication only because we've had to conform to the standards of the surrounding countries with us so globalization has led I think also to a raising of standards the one area that perhaps I'll take a little bit of a different position to Peter's is the whole issue of education I would argue that globalization has led to a general moving up of of educational levels but one area that I believe has not been given enough weight I I don't disagree with Peter's point of view that the role of higher education in training people has to move up to a new level and and none of the points I disagree with but you take a developing country like ours and and I use that as a proxy for other developing countries the vast majority of students do not make it past high school if at all the vast majority very small percentage I would say less than 10 percent make it up to higher education and when you talk about tensions in society I think that's a reality we have to face that the vast majority in countries like ours and and and the large populations are in countries like ours need skills coming out of high school and that's where maybe Peter I'd take just a slightly different point of view I used to maybe I have to choose my words carefully is to look down a little bit in a younger age to technical and vocational skills as a an experienced businessman now and with some years under my belt I have argued with our government that we have to take technical and vocational to a whole new level and overweight it it was seen as a secondary education in our country and I take examples of Germany South Korea where they've taken those skillsets and turn them into very robust platform for their manufacturing sector and so the only point that I'd like to make I don't think the role of higher education should change I think your arguments for skillsets that involve the imagination creativity and the like of which I'm a party often a liberal arts graduate myself should be there but there's a whole swath of society that needs skill sets coming out of high school that I believe will be well served by a strong innovation on the technical side I think globalization has also brought greater cross-cultural awareness and one area that I think hasn't been brought up in the discussions today unless I missed it was the issue of the worker versus the consumer there's been a lot of focus in the discussion today about the workers and they're being laid off in terms of employment and the like but people haven't also looked at the consumption side and and I think William began to address it a little bit with the way resource allocation has taken place globally the the points of emphasis and supply chains and what's resulted is in in consumption power in in in consuming power for for the public in general coming down to a level that's unprecedented in history if you travel now you can goods goods and services at far cheaper rates and when I hear the the protective arguments in the United States right now I'm always wonder other consumers understanding that the moment they close their barriers that their goods and services will go up to a whole different level and so there's also the organ of the consumer versus the worker and I think the consumer under a globalized environment has benefited tremendously one one one one one more point that I think was brought up by my expense in in his article in foreign affairs together with Fred who and is is the negative side of the Internet William I think has argued very strongly for the value of the Internet and I'm generally very much in agreement with that it's fundamentally changed the way we all do business but as one of our investments in the Philippines is in the banking sector never in my history in banking have we spent more time on the whole issue of cybersecurity than we are now we've had to spend inordinate amounts of sums looking at the firewalls at the safety systems we are buffeted and I am sure we're just a small Bank and the global scheme of things imagine the larger ones were buffeted daily by thousands of people trying to enter our system and break it up and and on going back to the negative side and this was highlighted by my expense in one of his articles there's a whole side of the of the internet that I think is is becoming a new reality some of the more social ones we see about fake news and the like but the whole integrity of the system is constantly under fire and and one big issue that I think people haven't faced up to is if you get a massive attack on your whole internet system particularly as the Internet becomes more pervasive when do we consider it an act of war as a country and I think the United States is I heard Bill Gates having this discussion on an area once upon a time he said you know we haven't come to terms with the definition of what's considered an act of war in terms of cyber warfare and when your whole utility system telecommunications system energy is ruled by utilities dependent on on telecommunication and the like and and that gets massively attacked it could be a new area for for warfare to take place maybe one last point before closing and allowing a discussion to take place I think again in the developing world there's been a the whole issue of urbanization has not been given the weight that has I think globalization has led to goods and services moving in new ways and led to a level of sophistication moving up in urban centers that's unprecedented I think with with that has come density but with it it's become there's also been a catalyst for innovation and change that has taken place in urban sense a city like Greater Manila basically drives 60 percent of the economy of the Philippines there are statistics I was picking up one on the way here from 1997 to 2015 even a developed country like London share of Britain's gross value grew from 19 to 23 percent then you take in our part of the world the big cities that jakarta's the Bangkok's the Kuala Lumpur's and and and more and more economic growth is being driven by that I think this whole move to urbanization needs a whole new look at as well to make it effective whether it has come a combustion and a catalyst for for innovation but the infrastructure demands have not been fully addressed by the public sector and I think that's one area of globalization that's a massive trend that I think is positive but I don't think we fully address from from from an infrastructure point of view really that that's it but maybe I'll just leave it like that maybe one last point the role of the private sector maybe just to add that element I think a number of speakers have talked about a changing role that we all have I think the world has changed significantly in how they view the role in the private sector I've always advocated ever since I came back from business school back in the 1980s that in a developing world like ours in in the Southeast Asia the role of the private sector has to move beyond the traditional metrics that we all learnt at business school back then in the 80s of you know our ohi's and giving the stock holders a fair return for their investment our role in society has to change and and in our integration into solving some of the social development needs of society have to be part and parcel of how we look at it our particular role as a corporation and the Philippines has changed over the last decade fundamentally I tried to find ways of becoming more relevant to a country like ours and in reaching a broader income group that fundamentally changed my business model to go to whole lower income groups and find products and services at the right price point to address their needs that's something that started a decade ago in a country like ours I think the developed world's beginning to understand that that symbiotic role between the private sector and the developing needs development needs in the country have to come more closely together and and I think that's a changing face of the private sector that I'm of course happy to talk about more as a discussion goes on thank you thanks for this opportunity Thank You Jaime you brought up so many interesting points and a lot of great insights in fact I think Peter cannot wait but want to speak as urgently as possible in response so let me turn this over to Peter yeah thank you - I wanted to hermès remarks made me want to comment on two things one is to pick up on his point about other parts of the educational spectrum apart from the tertiary education and actually you and I are in complete agreement on that point but I didn't actually address that and then also just something I forgot to say when I was talking about before which is about some sort of contrast between Asia and the rest of the world which given my recent experience I feel I'm qualified to make so on the on the issue of vocational training or high school skills for those people that never make it into tertiary education I completely agree there's a really interesting debate that goes on around the world about what the optimal rate of attendance at tertiary education is and I don't think anybody knows the answer I mean I was interested that you said it's 10% of the Philippines I didn't know it was as low as that in in I was I was at a leadership the university leadership course in the United States when Barack Obama famously made a statement that the target for the United States should be 50% and I remember asking why what is it about 50% why is 50% the right number does it mean you need to have a degree to work in McDonald's you know I mean what what does you know what so what is why is 50% the right number in hongkong coming to the government universities it's about 20% but if you look at people who do tertiary education of some sort whether it's an associate degree or something else then it goes up to about 60% so so there's there's no real agreement about what the optimal rate of attendance at higher education is I don't think universities are panacea I don't think they provide all the answers to society's needs but I think they've got a really critical role to play but you're quite right that there's a whole section of society maybe 50% maybe even more of young people will not go to tertiary education so how are they going to be provided with the skills that they need to function in this in this global world and I agree there's a role for schools as a role for families I actually don't even think it's necessarily high schools I think it might be primary schools you know maybe kindergartens you know maybe still may need to start very early maybe by the time you get to high school it's too late so so I think there's a whole separate debate there about other parts to education spectrum so I don't disagree with that but I didn't I didn't touch on it on my previous remarks and then just finally about one of the one of the greatest things about my job here is that I work in a society that really values education and that's not true in the UK so in the UK and you saw it with brexit I mean you saw breakfast it was a I don't get brought any great credit on the British electorate the-the-the either the campaign or the result but the but the the skepticism that exists in the UK about the role of universities and anything about the role of Education is really quite powerful and really quite substantial and I don't feel that here I don't feel that here the the the the three or four biggest donors to the university of hong kong that i've worked with in the time that I've been here and not alumni and in fact they're not many of them are not alumni of any university some of them didn't even have any secondary education so but they're people who just believe in the value of education and want to provide those opportunities for others everybody in Hong Kong and I think it's probably true in many parts of Asia has a sort of implicit belief in education as a route to self-improvement and societal benefit and that's a great asset that Asia has that the rest of the world doesn't have and I think Asia can build on that strength in a way that that really perhaps at the moment hasn't been as emphasized as much as it should thank you Peter I would like to our youth this the remaining 15 minutes in the most efficient way let me ask a couple of questions and then I will turn it over to the audience first jaime we brought up the point about the private sector or the corporation in today's world this morning you know I saw that I saw in the news that $0.10 a market capitalization just exceeded 500 billion US dollars so Tenzin has joined this small club of 500 billion or more market capitalization companies so in comparison there are only so many countries I think up there about 25 countries in the world today whose GDP is higher than 500 billion US dollars so if I have to come here the corporation versus nation state governments who is more powerful and more influential in today's world i I can see of course a lot of a strength a lot of power especially under Trump for the White House but you know nation state governments cannot easily cross the border and engage in investments and many other things in various foreign countries whereas corporations are much more free they can go anywhere so this is why today you know the cooperation so to speak plenty is such a very very important even more dominating role than most governments in the world so that may put more pressure on the private sector or on the modern corporation but then how do you think the corporation should really respond to our the calls from the largest society to follow for the corporation to do more in order to address some of the anti-globalization sentiment I think the many ways to look at it and it depends also on the leadership of the institutions I I think in a developing country like ours I've always felt that private institutions have an inordinate ability to access capital the best talent and the best partners to to address any solution and with that comes a special responsibility not everybody agrees with this point of view by the way but I've always felt that if we don't build trust in new ways and this started decades ago and it's interesting to see the developed world going through that thinking now when in the developing world that was acutely aware as a CEO about this tension that existed in our society because of the inherent inequities that take place but the way we use it for example right now and there are many different ways of handling it this it follows a little bit you know some of the ideas like shared value concept developed by Michael Porter at the Harvard Business School and in other ideas of melding a little bit that the for-profit model to some of the developmental needs one area again around the field of education that we've decided to put some capital into we have a fairly structured system and going back to my argument that the vast majority of Filipinos leave high school without any skill sets we've decided to put for example some private capital into the educational system and put up our own high schools I decided to take a very different point of view the Department of Education after much cooling allowed us to start this process we only teach English so my focus is on is on bridging the education employment gap that's not the only educational point of view that one wants to hit but we just decided to have a very particular product to address some needs in the Philippines so we only teach English which is not the usual pattern in in the primary and secondary system and in the last year of the curriculum of these schools were setting up we now have about 30,000 students under our system we specifically go to a bridging of the educational employment gap by giving them specific sales gets for the job straight out of high school and and and that involves a lot of work with computers a lot of work with simulations on sales very unusual and we took a pilot program at the beginning and then took some very average students didn't take special students put them through that system and traditional high school public high school in the Philippines and that the the the the percentage of employment statistics on the one that went through the specialized system and and their ability to get hired moved up by a factor of three or four it was tremendous so we decided to put capital behind that system just to address the needs of a country like ours but there's so many other examples thank you thank you let me ask her my second question which is related to what was discussed in the previous session that is is employment their only reason for you know popular for the rise of populism in some ways probably I agree that you know not all of it definitely not all of it it's due to employment when when we look at the fact that you know we are here at the a GD and how many people actually can come here and speak or attend this event not too many right so so this winner-take-all sort of phenomena has been universally growing in almost every profession including in among speakers for I mean at big events because I remember you know when I was growing up in the eighties probably all the local communities would have their own most famous you know most sought-after speakers but today few Americans and and Europeans maybe a Hong Kong Elysee dominate most of the speaking opportunities you know in in in Asia and other countries so this is why that discontent with globalization comes from many different reasons which has made it really difficult for us to understand because on the one hand one way or another almost everyone has benefited from globalization on the other hand almost everyone has something to complain about globalization so-so William what what do you think are the reasons behind this are we humans you know sort of not we're in doubt enough to be able to assess the positives and negatives of globalization I've noticed that in the media right when you write a story a very personalized story about someone whose family really suffered from globalization and then you know such articles get much more attention whereas if you talk about how many great contributions Leeanne phone has made to this globalized world many people will say yeah okay it's interesting but I have more interesting articles to read so that has created this very big asymmetry in terms of our processing and appreciation or understanding of their positive aspects versus the negative aspects of globalization so what can we do to change this of course education is one solution but anything else well you know I think you're right professor Chadd in terms of saying that there are obviously very good statistics to prove that a globalization and global trade is beneficial you know to everyone both importing exporting countries and processing countries however I think the there are problems because there are inequities within who gets the jobs who loses the jobs and so on and and I think the government really has to have a system to retrain I think Victor talked about that is a huge job of retraining those whose job has been made obsolete by globalization but the same thing will happen later it's not just globalization I think one of the things like to put down now and put a marker down is that if you look at the next revolution coming which is the whole a I you know you're talking about perhaps a great much greater disintermediation of existing jobs and and so I think this whole idea of the society is constantly in a state of flux and preparing the population okay to accept the fact that life is changing and they have to change it's very important you know my own thinking is that is that the universities have a lot to do with that you know I think that either touched on it you know Jaime touched on it the idea that you know that a job is only a part I think I think you said somebody said that uh you know you said I think Peter that in the career of a graduate after hall after university at least five or six changes after that so I think the ability to cope with change is probably something that we need to educate our people about because there will be change and tremendous change I'm also of the school that does not believe you hold back progress you know in technology in other areas you know in order to make it easier for people adapt to change but it's also true people just cannot adapt to change that quickly and I actually think that people are actually more flexible than institutions so the whole idea of governments governments are adapting to changes actually by the by the very word bureaucracy of the you know this is a lot of the rocket bureaucrat there seems to be inherent that word is their resistance to change and yet we live in the world where changes is all around us it is accelerating so so my thinking is that is that corporations have to change I think Jaime gave a very good example is how the corporate world changes I mean we were brought up on Adam Smith and the theories of of our competition and the idea is that you just concentrate making money in the rest of the society particular itself let's obviously change I think the role of a corporation is a good citizen within the society and the community they operate in is an hour is a it's a key part of the existence of a corporation you know you're not just there to make money for your share this you look at all your constituents all your stakeholders and you've got to think about how you take care of all your stakeholders and I think and I think the market itself if left to its own devices takes care of it you know a lot of now practice that the corporate sector sector is sanctioned by consumers by customers is sanctioned by the workers you know see if you don't have a free ring you know what to do but but Albin obviously plays a very good rule a very big role in terms of setting the rules and the boundaries within with which corporations and societies function and I think friend unfortunate I think that is part is failing in many in many areas many societies thank you thank you William so hope just is reminding me that we have five minutes left so sorry I'm not doing a good job managing the time but let me open it up now for questions here and this is more for Jaime you said that you your schools 30,000 students but you insist on English is is that a dissonance between what corporations are demanding and what the government is providing and you see that in other countries as well yeah I I have no just to make it clear I have no issue with with with the way the Philippine government is writing the educational system they have needs we're a disparate country actually Filipino is a national language but we have you know a number of maybe 10 local dialects and there's a complex system of integrating these dialects into the educational system and the like however I have always felt that here we are as a country where 25 billion dollars of remittances drive our economy in a significant way and the skill set for the overseas service worker is is English and and we've got a lot weaker as a country in doing it and a lot of these are our students leaving high school and then seeking employment so I thought by setting up these schools is just a particular point of view really preparing a group of students usually not from any you know from lower to middle income families and preparing them for the workforce to get them employment I mean we have a population of 110 million people in the Philippines right now and so we put up a system where English we felt was just a way to give them a global skill a skill that's naturally there but has been losing a point to focus for nationalist reasons and the like so we gave them that to prepare them for the workforce that could be global in nature and so that was a focus of that particular skill set just a very particular degree that they're getting from high school with a set of skills that at least enable them to get a leg up in a global environment thank you I would like to ask maybe for William which Chinese companies the mainland Chinese companies are truly considered to be global would you say Alibaba or 10 cent are the really global companies or are they facing a lot of headwinds going global because of all the regulations from from overseas well I think every blobel company has a home market where they first have to prove their worth and and and basically where they where they established a reputation before they can actually move abroad China being a very young economy from the point of view of thumb shopping is opening up from 1979 on which is fairly as very young economy I think they already have in a know more that number of companies that potentially global companies I think there are there are many companies in China there are potentially global companies and I think it's also helped by the fact that a lot of the initial impetus I know now we talk about the domestic market about Alibaba and so on but don't forget the original impetus of the China's growth as the factory of the world as professor Chen said was to export to countries overseas as a result the Chinese economy as far as the manufacturing side is concerned is already hardwired into a lot of overseas economies and markets so the conditions for them to go global is actually better than a lot of other countries you know who are depending on just the domestic market however having said that China does have the largest domestic market in the world in terms of headcount and the probably in terms of size as well there was always two promises of China right the first one is to be the factory of the world the second is with the world's largest consumer market and I think you see China realizing both of these promises in interest of time let me take one let's take one more question and then we'll end okay anyone would like to ask for last question yeah okay I guess you're all hungry for lunch so you can see globalization is it's such a great thing it's a great force as well we could stay here to have different takes on positives and negatives from globalization because globalization has affected not just different economies different societies but many many many millions of individuals so for that I think why we think a lot of negative consequences you know globalization is still great in particular where we're sitting you know that is Hong Kong they would not be Hong Kong without globalization so this is a as clear and tangible piece of evidence as we can get anywhere so with that let's thank the great panelists for their insights thank you you
