I dont typically do any translation, due to the fact that Interconnected is focused on original work and thinking. I felt obliged to offer an English version of Jack Mas speech on October 24 at the Bund Finance Summit in Shanghai, because traditional media coverage of the speech and the subsequent cancellation of Ant Groups IPO has been lacking and simplified. The speech is worth reading in its whole to have a much deeper understanding the full image. Below is my informal translation of the speech based on a Chinese transcript, with minor edits for clearness and speechifying. To read my deep dive analysis on the speech and its broader context, please check out: “Jack Ma, P2P Lending, Responsibility, Legacy”我通常不做任何翻译工作 ， 因为 互联 专注于原创作品和思考 。 但我觉得有必要提供马云10月24日在上海外滩金融峰会上的演讲的一个英文版 ， 尽管只是我个人非官方的翻译 ， 但是主流媒体对演讲和随后蚂蚁集团取消上市的报道太欠缺 ， 太过简单化了 。 想要更深层地了解整件事情 ， 全篇的演讲值得一读 ， 可以在这里看全文 ， 在这里看视频 。 想看我对这套演讲和有关大观景的深度分析 ， 请读 马云 ， P2P借贷 ， 责任 ， 留给社会的遗产 Thank you for inviting me to this Summit. I am pleased to have this opportunity to find out, go over, and exchange concepts together with you. In 2013, also in Shanghai, I concerned the Lujiazui Finance Summit and shared some “pie in the sky” views about Internet-powered finance. Seven years later, today Im back in Shanghai as an informal non-professional person here at the Bund Finance Summit, intending to share more concepts for you to ponder.Actually, I was rather torn about whether to speak here today. But I believe there is one thing that is incumbent upon this group of individuals, and that is the responsibility to think of the future, due to the fact that although the world has left us numerous opportunities for development, there are truly only one or more vital chances. This is a most critical moment.So I come here to share some of my own thoughts and views, which are the outcome of our own useful experience in the last 16 years, plus discussions and research study I have actually had with scholars, specialists, and specialists from all over the world, throughout the period when I was honored to be the co-chair of the UN High-Level Panel on Digital Cooperation and an advocate for the UN Sustainable Development Goals (SDGs). Im generally retired at this point, so I believed I d speak easily at this informal forum and share the non-professional views of a non-professional individual. Ive found that lots of specialists no longer speak about their occupations anymore.I have three points of view for you to think about. They might be immature, inaccurate, or absurd. Simply provide a listen, if they make no sense, just ignore them.The first perspective is we have some inertia in our thinking, like we constantly feel that in order to keep pace with global standards, we should do what developed nations like Europe and the United States have done. If we do not have something they have, the so-called “blank spot”, we need to fill those blank areas locally. Filling these areas has actually become the objective to pursue.I have actually constantly felt that, provided this years situation, the phrase to “fill the blank area” is troublesome. Because Europe and the United States have something does not indicate that thing is always advanced and worth having ourselves, simply. In fact, today, we must not be worried about what things to line up with, which nations requirement to adjust to, what blank areas to fill. Today, we need to consider how to align with the future, how to adapt to the futures standard, how to fill the futures blank spots. We need to find out what the future will be, and what we really wish to do, and then take a look at how others do it. If we constantly repeat the language of others, discuss subjects specified by others, we will not only be lost in the present, but also miss the future.After World War II, the world required to bring back financial success. The facility of the Bretton Woods system was a huge catalyst to the international economy. Later on, after the Asian monetary crisis occurred, the Basel Accords discussed threat control, which has actually been acquiring more and more attention, to the point that it became an operational requirement for threat control. Now the pattern is, the world is talking more and more practically threat control, not advancement. Very couple of individuals talk about where the chances are for young individuals, for developing countries.This, in fact, is the root cause of much of the worlds problems today. We also see today that the Basel Accords have actually put great constraints on Europes ability to innovate as a whole, for instance, in digital finance.Basel, more like a senior citizens club, has to do with solving the issue of an aging financial system that has actually been operating for decades, and Europes aging system is extremely complex. The issue in China is the opposite: it is not a problem of systemic financial risk, since Chinas financial sector generally does not have a system. Its danger is actually a “lack of monetary system.”Chinas financial sector, like other establishing nations that have just matured, is a young industry that does not have a fully grown ecosystem and is not completely moving. China has lots of huge banks. They are more like huge rivers or arteries in our bodys circulatory system, however today we need more lakes, ponds, streams and tributaries, all sort of swamps. Without these parts of the community, we will die when we are flooded, and pass away when we are in a dry spell. So, today we are a nation that bears the threat of lacking a healthy monetary system, and we need to construct a healthy monetary system, not stress over financial systemic risks.They are like two totally various diseases, like Alzheimers illness and polio. Both look comparable initially glance however are 2 completely different health problems. If a kid takes Alzheimers medication, she or he will not only get the old individuals disease, however a lot of other odd illness as well.The Basel Accords is designed to deal with the illness of the elderly with an aging system and over-complexity, and what we need to consider is what can we discover from the senior? You must remember, older people and younger people care about different issues. More youthful individuals care about whether there are schools, older people appreciate whether there are hospitals.So, the way the world is altering this year is interesting and really fast. Last night in Shanghai, we selected the rates of Ants IPO. This is the biggest listing ever priced in the history of the whole mankind, and the rates took place in a location aside from New York City. This was unimaginable five years ago, even three years earlier, but wonders happen.Second, development must come at a cost, and our generation should take on that responsibility.President Xi once said, “success does not have to come from me.” I comprehend this expression to be about a sense of obligation. Its about taking responsibility for the future, for tomorrow, for the next generation. A lot of the worlds problems today, including Chinas, can just be solved by development. For genuine innovation to take place, no one will reveal you the way, and someone must shoulder that obligation, because development is bound to make errors. But the question is not how not to make errors, but whether we can best and correct them after making errors and persistently innovate. To make safe innovation is to suppress development, and there is no safe development in this world. There is no such thing as risk-free development. Often, managing danger down to zero is the biggest risk.When the fight of Red Cliff was battled, I believe Cao Caos act of linking all the ships together was the first circumstances of a warship, in China and the world, but after a fire burned all of it down, for a thousand years, the Chinese individuals didnt attempt to think of it again. Once they considered that fire, who still wished to make a larger ship, who might still have this kind of system-level thinking?Seven or 8 years earlier, likewise in Shanghai, I discussed this concept of Internet-powered financing. We have constantly highlighted that Internet-powered financing must have 3 core components: first, it needs to have rich data; 2nd, it needs to have danger control innovation based upon abundant big data; and third, it needs to have a credit-based system built on huge data.Using these 3 criteria to examine, we can see that P2P is not Internet-powered financing at all, however today we can not negate the development that the Internet has actually given finance simply due to the fact that of P2P. In fact, lets think of it, how can there be countless Internet-powered finance business in China within a couple of years? Should not we analyze what brought to life countless “Internet-powered finance”, the so-called P2P companies?Today, its actually hard to regulate ourselves; its tough to conduct policy all over around the globe. Development primarily comes from the market, development comes from the grassroots, development originates from youths. Regulative challenges are getting larger and larger. Jian [ editors note: English word is “guidance”, the very first character in the word for “regulation” in Chinese] and guan [editors note: English word is “management”, the second character in the word for “policy” in Chinese] are 2 various things. “Supervision” indicates enjoying you as you establish and paying attention to your development. “Management” implies stepping in when there is an issue or when there is a foreseeable problem.We are very great at “management”, however our “guidance” capability is sorely lacking.Good development is not scared of regulation, but hesitates of going through yesterdays way to control. We can not utilize the method to handle a train station to manage an airport. We can not use the other days way to manage the future.”Supervision” and “management” are not the same, “policies” and “files” are likewise not the very same. This isnt allowed, that isnt permitted, those are all called “documents”. Policy is institution-building to incentivize advancement. Today, the entire world and especially China needs more “policy specialists”, not “document specialists.”Policy making is a technocratic task to fix systematically complex problems. And I wish to share with you what we did at Taobao to resolve systemically complicated problems.Seventeen years ago, we had no technology, no information, and an unreliable judgment about what the future would be, so we made a great deal of guidelines about this not being allowed which not being enabled. But today, we have the ability to fix these systemic issues with innovation. Nevertheless, our young individuals today, like regulators, constantly like to produce all kinds of brand-new policy files that do not allow this and do not permit that. Later, I came up with an option called “plus one, minus 3”: if you desire to include a guideline, you should subtract the previous three guidelines. This method, our file got much shorter and shorter. If you dont decrease the number of rules, then your regulations and guidelines will get thicker and thicker, which forces everyone to break a guideline, to slip up, and we all get confused.Theories and systems are likewise various, specialists and scholars are not different. We, as a nation, typically conflate specialists and scholars. An experts expertise originates from doing, he is extremely great at doing the work, however not always great at summarizing.Many scholars, they do not do the real work, however can summarize and form theories from the work of others. Just when professionals and scholars are combined, just when theory and practice are combined, can we really innovate and resolve the problems of today and tomorrow. I think we require theories originated from practice, not practice based upon theories that originated from an office.A great deal of P2P is practice based on workplace theories. I believe and firmly think its more crucial to correctly discover the huge lesson that P2P has actually taught us, and not reject the whole Internet innovation, not to mention repeat the practices of workplace theory.I think there is another phenomenon. Lots of regulative authorities worldwide have actually become absolutely no danger, their own departments have ended up being zero risk, but the entire economy has actually become dangerous, the whole society has ended up being risky. The competition of the future is a competition of innovation, not a competition of regulative abilities. Now, each nations policy is more callous than the next, all the development is a mirage, however by not enabling it, each cut is bloody.Based on my understanding, what President Xi stated about “enhancing governing ability” suggests to maintain sustainable and healthy advancement under orderly policy, not no development due to guideline. It is not tough to regulate. Whats challenging is to deliver regulation that attains the purpose of producing sustainable and healthy development.The 3rd point: the essence of financing is credit management. We must alter the pawnshop mindset these dayss financing and rely on the advancement of a credit-based system.Todays banks continue to have a pawnshop mindset. Warranties and securities are pawnshops. Once upon a time, this was very sophisticated. Without innovations like service warranties and collaterals, there would be no todays banks, and the advancement of the Chinese economy over the past 40 years might not have actually continued till now.But the dependence on properties and security certifications can be required to the extremes. I am the chairman of the China Entrepreneur Club and likewise the president of the Zhejiang General Chamber of Commerce. I speak to many business owners. Chinas pawnshop mindset is serious, and it likewise impacts lots of entrepreneurs, especially business owners who have actually collateralized all their properties. The pressure they bear is really high, and when the pressure is high, your action gets deformed.There are also some individuals, who unscrupulously secure loans and continuously increase their leverage, taking on increasingly more financial obligation. As we all understand, obtain 100,000, you are scared of the bank; obtain 10 million, both you and the bank end up being a bit panicked; obtain 1 billion, the bank is scared of you. There is another habit, banks like to provide loans to great companies, companies that dont need money. They desperately wish to loan these business cash. The result is lots of good services end up being bad services. They diversify their investments, even transferring this money out to do things that are completely inappropriate for them. Excessive money can get you into a lot of trouble.Collateralization with a pawnshop mentality is not going to support the monetary needs of the worlds advancement over the next 30 years. We should change this pawnshop mentality with a credit-based system rooted in huge information utilizing todays technological abilities. This credit-based system is not developed on traditional IT, not based upon an individual relationship-driven society, however need to be constructed on huge information, in order to really make credit equal wealth. Even the beggar must have some credit, without credit, you cant even plead for food. I think every beggar is (can be) creditworthy.Finally, I think the world today is frantically waiting on a brand-new monetary system that is really developed for the future.Todays financial system is a product of the Industrial Age, an extensive monetary system developed to deal with the needs of industrialization and to satisfy the two-eight theory. What is the two-eight theory? Its about buying the 20% to fix 80% of the issue. And the future of the monetary system is about the eight-two theory, helping 80% of small companies and youths to drive the other 20% of individuals. We must shift from the old way of individuals looking for cash, organizations trying to find cash, to cash searching for people and money looking for good businesses. The only standard to evaluate this system is whether something is universal, inclusive, green, and sustainable. The cutting-edge technologies backing this standard, like big data, cloud computing, and blockchain are already all set today to take on this substantial responsibility.Ladies and gentlemen, even after World War II, individuals at that time did not have a far adequate vision to design an excellent financial system for the future and for future generations. We have the obligation and believing today to develop a financial system that truly comes from the future, belongs to the young individuals and the next generation, comes from this age. Today, its not that we can refrain from doing it, but we dont wish to do it. Today, our technological advancement has empowered us to achieve all of these things, but regrettably, many individuals dont wish to do it.The international financial system must be reformed today, otherwise it is not just a matter of lost opportunities, but of leaving the world potentially in more turmoil. It is normal for innovation to be ahead of policy, however when innovation is too far ahead of regulation, when developments richness and depth is far beyond regulators imagination, it is no longer normal, and society and the world will be thrown into chaos.Take digital currencies for example, if we apply a futuristic vision, it would be at the very core of constructing a financial system the world needs 30 years from now. Its true that todays finance doesnt need digital currencies, but it will need them tomorrow, it will need them in the future, thousands of developing countries and youths will need them, and we need to ask ourselves, what real problems are digital currencies going to need to fix in the future?The digital currency of 10 years from now and the digital currency these days may not be the same thing at all, and we ought to not look for this digital currency from the past, from a regulatory viewpoint, from a research study organization, however from the market, from need, from the future. There is a lot at stake in this matter. Our research institutions need to not be policy institutions, nor need to policy organizations rely only by themselves research study organizations. However not just an innovation problem due to the fact that the digital currency system is an innovation problem. Its likewise a solution to future problems. Digital currencies may redefine cash, although the main function of money is still there, however it will definitely redefine cash, much like the iPhone redefined the cellphone, making telephone call is only one of the functions. Todays digital currency is far from maturity to complete for requirements, its still producing value. Its time to think of how to develop a brand-new kind of financial system through digital currency, to think of the future for the whole world, to consider how global trade will get done, and a lot more so to consider how the world can have a digital currency constructed on top of battle-tested technology. Its really about solving the issue of sustainable, inclusive and green world trade.So I want to conclude by saying that todays human society has reached a most crucial point. Never ever undervalue this pandemic. This pandemic is a force that is pressing back human progress, no less than World War II.In terms of financing itself, the United States is continuing to inject cash to the remainder of the world, and specifically to Wall Street, and other nations are following fit. Have all of us believed about the consequences that will happen next? The impact is far greater than all the technical elements that we went over today.We can not simply oppose many of the worlds global companies today, however should reconsider their worth in todays world together, whether its the UN, the WTO, or the WHO. There are actually a lot of issues with these companies. I have actually handled, worked with, and worked together with all of these organizations, but removing them is not the solution.A new monetary system is the way of the future. Whether we like it or not, it will be formed. Whether we do it or not, someone will do it. In the future, I believe, reform will need sacrifice, there will be a cost to pay. Our generation has to do this sort of reform, however it may just be noticeable to the next generation. We may be the one who should bring this concern forward. This is a historical chance and a historical obligation. Over the past 16 years, Ant Financials has centered around green, sustainable and inclusive development. If green, inclusive and sustainable finance is the wrong thing to do, we will continue to make this error, again and again.END(For those who can listen to Chinese with a Hangzhou flavor, heres a video of the speech.)If you like what youve checked out, please SUBSCRIBE to the Interconnected email list. To read all previous posts, please check out the Archive area. New material will be provided to your inbox (two times each week). Interact and follow with me on: Twitter, LinkedIn.
Seven years later, today Im back in Shanghai as an unofficial non-professional person here at the Bund Finance Summit, hoping to share more concepts for you to ponder.Actually, I was quite torn about whether to speak here today. I believe every beggar is (can be) creditworthy.Finally, I think the world today is desperately waiting for a brand-new monetary system that is really developed for the future.Todays monetary system is a product of the Industrial Age, a detailed financial system designed to address the requirements of industrialization and to meet the two-eight theory. Today, our technological development has empowered us to achieve all of these things, however regrettably, many individuals do not desire to do it.The global monetary system need to be reformed today, otherwise it is not just a matter of lost opportunities, but of leaving the world potentially in more mayhem. Its real that todays finance does not require digital currencies, however it will need them tomorrow, it will require them in the future, thousands of establishing nations and young individuals will require them, and we should ask ourselves, what genuine problems are digital currencies going to need to fix in the future?The digital currency of 10 years from now and the digital currency of today might not be the same thing at all, and we should not look for this digital currency from the past, from a regulative point of view, from a research study institution, however from the market, from demand, from the future. The impact is far higher than all the technical elements that we talked about today.We can not simply oppose many of the worlds worldwide companies today, however should rethink their value in todays world together, whether its the UN, the WTO, or the WHO.