Survival Rules for Turbulent Times: A Compilation of the 20 Most Unmissable Core Insights from the 2026 Tsinghua PBCSF Forum

On May 18, 2026, the 2026 Tsinghua PBCSF Global Finance Forum, themed "Global Financial Governance in a Changing Landscape: New Challenges, New Opportunities, and New Development," was grandly opened in Chengdu, Sichuan Province.

Zhou Xiaochuan, Vice Chairman of the 12th National Committee of the CPPCC and former Governor of the People's Bank of China, attended the opening ceremony. Guo Yong, Deputy Secretary of the CPC Committee of Tsinghua University, Jiao Jie, Dean of Tsinghua University PBC School of Finance, and Xie Wei, President of SPD Bank, delivered speeches respectively. Zhang Xiaoyan, Vice Dean of Tsinghua University PBC School of Finance, served as the host of the opening ceremony.

At the meeting, Zhu Min, former Deputy Governor of the People's Bank of China (PBOC) and former Deputy Managing Director of the International Monetary Fund (IMF), Michael Spence, winner of the 2001 Nobel Prize in Economic Sciences and Philip H. Knight Professor Emeritus of Management at the Stanford Graduate School of Business, and Masaaki Shirakawa, former Governor of the Bank of Japan (BOJ), engaged in a high-level dialogue.

This article is a compilation of key insights and a transcript from the high-level dialogue at the 2026 Tsinghua PBCSF Global Finance Forum (清华五道口全球金融论坛).

Zhu Min: Former Vice Managing Director of the International Monetary Fund (IMF), former Deputy Governor of the People's Bank of China (PBOC). His core views are as follows:

1. The global economy faces the triple pressures of "slower growth, rising inflation, and high debt ratios," while geopolitical conflicts exacerbate uncertainty, and there is a risk that the situation could deteriorate.

2. Geopolitical risks have exceeded the traditional macro policy framework, and it is necessary to re-explore appropriate response tools.

3. AI is a core variable reshaping the global economy and productivity; it is necessary to simultaneously pay attention to its social impact and the adaptation of financial regulation.

4. There will be no fundamental changes to the international monetary system in the short term, and the dominant position of the US dollar remains; upholding the multilateral system is key to financial stability.

Michael Spence: Winner of the 2001 Nobel Prize in Economics, Philip H. Knight Professor Emeritus of Management at the Stanford Graduate School of Business. His core views are as follows:

1. The world has entered a state of "permanent crisis," the pillars of post-WWII economic stability are fading, and geopolitical conflicts and high-frequency shocks have become the new normal.

2. The global economy will fall into a core pattern of "high real interest rates, high government debt, and low growth," and the continuation of energy conflicts will exacerbate the deterioration.

3. AI is the core potential for hedging economic risks and can significantly boost labor productivity, but there is uncertainty regarding its actual implementation results and the speed of penetration.

4. Divergence in AI development paths between China and the US: China focuses on "technology permeating the real economy," while the US emphasizes R&D and governance; the Chinese model is more easily converted into actual growth.

5. Developed economies are worried about AI replacing jobs, while emerging economies are more optimistic; the core of AI development is "human-machine collaboration" rather than simple replacement.

6. The multilateral system has not been abandoned, and China upholds multilateralism; the Euro and the Renminbi (RMB) are unlikely to shake the status of the US dollar as a reserve currency in the short term.

7. AI regulation is naturally lagging behind; it requires the joint efforts of the academic community, regulators, and the market to address the new risks brought about by changes in the information structure.

Masaaki Shirakawa: Former Governor of the Bank of Japan (BOJ). His core views are as follows:

1. Four major global core trends: rising geopolitical risks, the rise of AI, intensifying social division, and population aging/negative growth.

2. Supply chain shocks have become "long-term and normalized," and central banks need to abandon the traditional decision-making mindset of "short-term shocks."

3. Central bank independence is the policy baseline; losing independence will trigger fiscal dominance over monetary policy, leading to an imbalance in macroeconomic policies.

4. Negative population growth will directly lower labor productivity; the two are closely bound together, so we need to respond systematically in advance.

5. The central bank should return to its core function of "price stability," face up to policy limitations, and adhere to the principle of moderate intervention.

6. It is a trend for the Bank of Japan (日本央行) to raise interest rates, but it is extremely cautious; negative interest rates have already caused economic problems such as the depreciation of the Japanese yen.

7. China and the US control the core AI ecosystem, while other countries need to participate by leveraging their own strengths (such as Japan using AI to empower elderly care).

8. AI will give rise to entirely new unknown risks; the core of the response is to "remain humble, conduct open research, and maintain continuous discussion."

9. The pattern of the US dollar dominating the international monetary system is hard to change in the short term, and currency swap is a key tool to deal with geopolitical crises.

The following is a transcript of the live conversation:

Zhu Min: A very warm welcome to everyone attending the Global Finance Forum. We are extremely honored to have invited two outstanding and distinguished guests to join today's high-level dialogue session. For Professor Michael Spence, a Nobel laureate in Economics, there is no need for much introduction. Your growth theory, and the Growth Commission you chaired 20 years ago—Governor Zhou was also a member at the time—as well as your early book "Globalization and Growth" and your new book, have all left a very deep impression on us by interpreting the long-term volatility faced in today's global economic situation. Many people here are readers of your works.

We are also very pleased to have invited Mr. Masaaki Shirakawa, former Governor of the Bank of Japan, to participate in today's discussion. Mr. Masaaki Shirakawa is also an old friend of China. He has just published a book about his experience of more than 30 years at the Bank of Japan. This book has been a bestseller as soon as it was published. Reading your book can help us understand the history of Japan's past development, as well as its implications for China's development today. The original Japanese version of your book was titled "39 Years at the Central Bank," but the Chinese translation is called "Turbulent Era." Did you know about this? Indeed, we are living in a very turbulent era.

Shirakawa: The English title of my book is the same as the Chinese title, called *The Turbulent Decade* (TumultuousTimes), this is the title.

Zhu Min: A fantastic book. If you haven't read it, I highly recommend it.

At such a moment filled with excitement, we see that the global economy is slowing down, yet oil prices have already broken the $100 mark. We see inflation picking up again, and government deficits are a concern for many countries right now. In a few years, the average debt-to-GDP ratio of the world's major economies will reach 100%. In the United States and other economies, we see a lot of economic fragility and uncertainty. The key question now is, after this war ends, after the US-Iran conflict ends, where will the world go? Will oil prices come down? Will international shipping maintain stable development? Can supply chains achieve stability? Or will we enter a new normal? If we are to enter a new normal, what are its basic characteristics? What trends and development paths will there be? These questions are lingering in everyone's mind. The global economic growth rate has been cut from 3.4% to 3.1%, and the forecast for 2027 may be further lowered. According to analysis from all sides, the global economic situation could get even worse. If the situation brought about by this war lingers, or even deteriorates further. Professor Michael Spence, what are your thoughts on this?

Michael Spence: I am very happy to be here on site, because I have attended this meeting online many times before, and today I am very happy to come to the forum site in person.

Yesterday, I also listened to Governor Zhou Xiaochuan's insightful views, and I look forward to having more discussions with him later. Today we live in a complex and chaotic world, so I approach this topic with humility, as the current situation has multiple layers and angles. My assessment is that after emerging from the COVID-19 pandemic, we entered a phase of global economic structural transformation, one aspect of which is the gradual fading of deflationary pressures and the gradual emergence of supply-side driven inflationary pressures. Amidst this reshaping process and in this context, the US-Iran conflict broke out. This actually pushed global economic development a step further in this direction. In 2023, when Gordon Brown and Mohamed El-Erian published a book—"The Long Crisis: A Roadmap for Reshaping the Global Economy"—the conflict between Russia and Ukraine broke out, and now we have the US-Iran war.

Zhu Min: You have also published your book, and in your work, you also see that war and conflict will become a norm, or part of the norm. Let's not use the word "norm," but rather say that they will occur more frequently in the future. Did you think of this at the time? Because it's called "Perpetual Crisis" (Permacrisis).

Michael Spence: I need to be extra careful in answering this question. Did we successfully predict the outbreak of the two wars? Honestly, no. But when we were writing the book, we saw that the stabilizing factors supporting the global economy after World War II were gradually fading, various shocks were becoming more frequent and severe, and the geopolitical tensions were constantly escalating. Today's world is full of single points of failure; once a single point of failure occurs, it will affect the vulnerability of the entire situation. The strategic goals of various countries include more and more non-economic factors and considerations. At the time we were publishing this book, we saw such trends, but did we predict these two wars? The answer is no, we did not predict these two wars.

However, the results brought about by the development of such a world, of course, still require more deliberation and discussion. For a large part of the world, we see that real interest rates will be higher, which is very dangerous. We see that the debt of various countries is rising. Third, growth will be damaged. From a short-term perspective, how significant will the long-term impact of this shock be? It depends on how long the situation in the Persian Gulf will continue. If it continues, not only will there be an impact and changes in energy prices, it may even bring about energy shortages, thereby leading us into a completely different development landscape.

Am I being a bit too pessimistic? Of course, there are also some offsetting factors, just as Governor Zhou mentioned in his speech yesterday, and as several insightful speakers mentioned this morning. From the supply side perspective, we now see that AI will play a potentially huge role, possibly partially offsetting the risks we discussed earlier. In terms of potential, we could see a surge in labor productivity due to AI. But how this will be achieved, how powerful this rise in labor productivity will be, and to what extent it can resolve the pressure factors we currently face, such as debt, weak growth, and other factors, remains a question mark.

Zhu Min: This is a new normal, because as you just mentioned, this is a structural change, like the supply-side changes brought by AI, and government debt is also a fundamental factor. Then, if this war drags on, it will indeed bring many impacts, but the most important point is that now none of us knows the direction of this conflict, but the structures and forces that play a stabilizing role are gradually fading away. It's not that they have all disappeared, but they are becoming weaker, much weaker than before. You made a very important point here, this is a real concern.

What is your assessment of the current global situation, Governor Shirakawa?

Shirakawa Masaaki: Thank you very much for inviting me to participate in this high-level dialogue session. I am very honored and very happy to be able to participate in this session. The question you just raised not only concerns the escalation of geopolitical tensions, but also mentions the "post-conflict era" of this conflict.

Looking ahead, I think a very important fact, or a very important point, is the rise of geopolitical risk factors. Second, the rise of AI. Third, the rise of populism, or the phenomenon of social fragmentation. Fourth, aging. Rapid aging brings changes in demographic structure, as well as a decline in birth rates.

First of all, I would like to talk about such a short-term factor as the rising geopolitical tensions.

Speaking of this point, my view is the same as the average view, which is that we must remain vigilant against the risks of rising inflation and slowing growth. This is the view of the majority, and I also hold this view.

The current uncertainty is caused by human factors, so it is very difficult for us to predict now how such uncertainty will be resolved. More importantly, we must recognize that decision-makers in various countries should adopt correct policies to deal with the current situation. I think from the perspective of the central bank, the central bank must judge whether the shock encountered by the current economy is short-term or long-term, and must have longer-term judgment. Whether such logic is applicable in the current situation is also a question I have been thinking about. Currently, the view of the majority, the standard view, is that "the impact brought by inflation will gradually fade within about a year." But looking back at the development over the past period, we see various geopolitical risk factors and other factors, such as the addition of the COVID-19 pandemic and the outbreak of the Russia-Ukraine conflict. Regarding the impact on supply chains, when the central bank takes response measures, we define it as "a short-term supply chain conflict" to make decisions. But what kind of impact will be produced when these factors are superimposed together? The central bank must think carefully. In the world we live in today, such supply chain shocks occur frequently, or even become long-term and permanent, so as central bank decision-makers, we must maintain a humble and cautious attitude.

As everyone knows, central banks around the world are currently facing a dilemma. It is a very regrettable situation that the independence of central banks is currently under attack. If central banks lose their independence, the result will be that the policies introduced by central banks will no longer be neutral but will be biased, which will bring serious consequences. Previously, you have already talked about the current government debt and the challenges of the fiscal situation in many countries. Or there is the risk of letting fiscal policy dominate central bank policy. If the central bank loses its independence, then once fiscal policy dominance spreads to the central bank, or dominates the central bank's decision-making, it will cause the central bank's macro policy to shift. Therefore, we must remain vigilant against the risk of fiscal policy dominating central bank policy if the independence of the central bank is weakened.

At the same time, I would like to talk about the issue of population aging and the changes in demographic structure. Regarding the aging that has occurred previously, as policymakers, what response measures should we take for society? Currently, when discussing population issues, the main debate points are mostly divided into a binary choice: on one hand, there are changes in population structure, and on the other hand, there is the growth rate. However, I believe that these two aspects complement each other. Regardless of what changes occur, if growth is positive, we do not need to worry too much about population decline. But looking at the experience of Japan, negative population growth itself will transmit in various ways to reduce the growth of labor productivity and actual output. Therefore, whether as a society or as policymakers, we must be fully prepared to deal with the interconnected factors between labor productivity and population changes.

Zhu Min: Thank you very much, Governor Shirakawa. We will talk about changes in the demographic structure later, which is also a very big issue.

Both of you have made very insightful comments on the global situation. Professor Spencer said we need to remain humble, and you also mentioned that we need to maintain a cautious attitude, because the changes currently taking place have gone beyond our current understanding, so we must remain humble. This once again verifies the complexity of the current global situation. As human beings, our abilities are still limited, and we must be cautious and humble.

Governor Shirakawa, the issue you just mentioned is very important. The current uncertainty is extremely high, especially the uncertainty driven by geopolitics, which is rising day by day. Moreover, we really don't have an answer right now on how to resolve this issue from the perspective of the central bank and macro policymakers. You mentioned that central banks must be sufficiently cautious because traditional macro policies, whether monetary policy or fiscal policy, are not necessarily the best tools for dealing with uncertainty or risks. When central banks use monetary policy tools, they must be cautious and consider what the cumulative effects of using these monetary tools will be. This point is very important; it is actually one of the lessons Japan has learned. I think this is crucial. Geopolitical risks have gone beyond the scope of our economists' deep thinking, the original way of thinking, and the framework. If macro policies are not necessarily the best tools to deal with it, then what will be the more prudent and more suitable tools to deal with uncertainty?

Shirakawa: The question you raised is crucial. Frankly speaking, I don't know what a fully convincing answer would be. Several years before Mr. Parag Parikh (sound) (Frank Knight?) passed away, he emphasized the independence of central banks. The most important thing is that society cannot expect the central bank to do exactly as it wishes and fully meet expectations. Although it can do a lot, it is not omnipotent. The mindset of traditional macroeconomists often tends to make central banks seem too omnipotent. According to Tinbergen's (sound) principle, policy goals must be consistent, and policies should be placed in areas where they are most effective; therefore, macroeconomic policies should focus on things like: maintaining price stability and maintaining stable inflation. Under pressure, central banks often do their best, using various policy tools without paying any cost. There are also such policy combinations that just knock down a problem when it appears, but at the same time ignore some common problems. However, if the central bank only focuses on the effects brought by a policy and ignores its negative effects, when the negative effects accumulate, the impact is huge. Therefore, the central bank should adhere to the principle of moderation, which is something the central bank can measure. On the social side, from a political perspective, other parties need to understand the limitations of the macroeconomy. This is not simply a matter of me often emphasizing structural reforms and structural aspects when I was the Governor of the Central Bank, but the more I emphasize it, the more criticism I often receive. People often accuse me of shifting attention away from the central bank's responsibilities. But in many cases, considering when the economy and society are running poorly, the central bank seems to receive more criticism. From this perspective, the roles played and the perspectives held by all sectors of society, including the academic community and think tanks, are equally important.

Zhu Min: Yes, central banks are at a very sensitive and delicate moment. Michael Spence, what do you think are the limitations and constraints of traditional macroeconomic policies and tools in dealing with uncertainty, especially geopolitical uncertainty? Because it goes beyond the original functions of macroeconomics, we will see the impact of cumulative side effects, which brings us great challenges. What is your evaluation of traditional macroeconomic policies when dealing with geopolitics and uncertainty?

Michael Spence: Macroeconomic policies naturally have a certain role. I am now thinking about what kind of situation my friend Kevin Warsh is in. As far as the U.S. economy is concerned, if we temporarily remove political factors, the challenges currently faced seem quite direct and clear. Institutions like the IMF (International Monetary Fund) and others have also talked about the various problems central banks face when implementing their tasks. They have a certain role, but dealing with uncertainty and structural changes is not within their original main functions; previously, they were more about dealing with fixed, traditional problems such as inflation. For example, adopting QE (Quantitative Easing) methods may also bring about distortion effects. This challenge is very direct. If we do not consider political factors, and if inflation appears, we have to deal with it and face it directly. Then, after a period of time, it may appear that compared to other countries' economies, the U.S. economy is very different. Especially compared to the European economy, which is where I live, higher interest rates do not necessarily mean that the current U.S. economy will further derail; this is my view. It may increase productivity and may bring about an increase in investment, and we hope to see stable growth. Considering his current job role, he will naturally face a series of challenges. And as for those countries and economies that are cutting interest rates, I don't know why there is this sense of political superiority.

Zhu Min: Yes, that's very interesting. We all mentioned that when the central bank faces the current situation, it must return to its original basic task, which is to control inflation. Inflation may be caused by various reasons. The central bank needs to be very cautious; this is also a very important piece of advice, because considering inflation, inflation in the U.S. is clearly picking up. You mentioned that there is actually still a lot of room for further improvement in investment and production efficiency. Kevin Warsh, who has been confirmed and is about to take over as Chair of the Federal Reserve, has a so-called "balanced structure" theory. Do you think it is convincing? Or does uncertainty still remain? Because of the trend of shifting from cutting interest rates to raising interest rates.

Michael Spence: They may raise interest rates, or they may not. If we don't see inflation, it's possible. You are asking whether Kevin Walsh believes that this improvement in productivity is possible, which brings us back to the issues raised during the Greenspan era. The issue of inappropriate assessment of growth potential. A core part of what we are particularly worried about is "whether the timing is appropriate." Sometimes there are inflationary and supply-side headwinds; they are temporary and immediately visible. Sometimes we also don't know whether the technology and tech side can bring about longer and faster economic growth, or whether it can take effect quickly, and this work is done very well in China. Now, one thing that Kevin Walsh also has to deal with is "appropriate timing," so as not to undermine potential growth and to be able to cope with inflation.

Zhu Min: Right, everyone is discussing whether Kevin. Walsh is consistent with the outgoing chairman regarding interest rate cuts, but what you emphasize is another dimension, which is "timing"—inflation or deflation. Behind this lies such a broad spectrum of topics. And Japan is indeed continuously raising interest rates; it is currently underway. Do you think the Bank of Japan will continue to raise interest rates in the next 12 months?

Shirakawa Masaaki: I am now a citizen, so I am speculating on policy makers from a citizen's perspective. The central bank in Japan needs to raise interest rates; they focus on the direction. As long as economic forecasts can be confirmed, they need to raise interest rates, according to the verification of the current economic model. Actually, the Bank of Japan is very cautious about raising interest rates, which has caused many problems. The current real interest rate is negative, which is why our exchange rate is so low, and we see the depreciation of the yen and the emergence of other economic problems. I have been thinking about why the Bank of Japan is treading on thin ice regarding raising interest rates. This may be because there is a worry that a series of problems will arise when interest rates are high, which is purely a worry about interest rate growth. Every time I see the worry and fear of high interest rates, I think of the worry regarding loose monetary policy; it is very long-standing, so it will raise interest rates.

Zhu Min: The financial market sector will have its own considerations, while the real economy side will also have further concerns, for example, the increase in their financing costs. Japan is continuously raising interest rates, while any other country in the world is trying to cut interest rates. Will this cause changes in global capital flows? Michael, what is your opinion, or do you think this issue is not serious? Because capital flows now, like Japan's capital flows, the trend is very volatile, with huge fluctuations.

Michael Spence: From the perspective of financial professionals and central bankers, they probably share my view that there isn't much volatility caused by arbitrage here, so I'm not too worried about it. But fundamentally, it will affect investment, especially investment in technology. There is one point we haven't mentioned, which is the huge impact artificial intelligence has on all aspects of technology, whether in statistical data or in the daily lives of our descendants, such as in biopharmaceuticals and the materials science they use.

Another point I would also like to mention is that China is currently doing an important thing, which is that the "15th Five-Year Plan" (十五五) places special emphasis on the potential of artificial intelligence and technological development. It relies not only on the construction of these beneficial models, but more on the adoption of technology and its penetration into all aspects of the social economy. I feel that China has made deliberate efforts and practice in this regard to ensure, as much as possible, that people can understand and access financial services, and to improve people's inclusiveness and accessibility in manufacturing and the service industry. In this regard, we will use penetration and influence. I do not think that in the United States or the West, there is such a conscious effort to let technology penetrate into every aspect of people's lives. We have actually seen, for example, in the technology sector and the financial sector, that the development of software and artificial intelligence has brought other impacts, but in areas like construction or traditional retail, and many other aspects, technology is technology and the industry is the industry; due to technical reasons and policy reasons, integration has not been achieved. On the other hand of investment projects, whether public or private, this point is very important: to realize a relatively good benefit, one must ensure the penetration and utilization of technology.

I know that many of you here are at the forefront of developing and utilizing scientific research, coming from these cutting-edge industries. There is a lot of advanced technology in the United States (US) and China (中国), but in many other countries in the world, technology is just technology and the economy is just the economy. The real adoption of technology into the economy is the core issue.

Zhu Min: You raised a very important question. Artificial intelligence is naturally a very important factor. Its application is what can further reduce the impact caused by supply chain shocks, promote structural adjustment, and increase productivity.

Also, you mentioned that in today's real world there is a very important issue, which is that there is a model like the United States (美国) having very powerful AI and very good technologies, while China talks about diffusion and application, truly using these technologies to improve production efficiency. The United States, however, only focuses on the governance of AI. This seems to propose two different models. How will these two models evolve? From China's perspective, I see that AI has truly permeated the manufacturing industry and various other industries, directly used to improve productivity. How will the US model ultimately be implemented? Will it actually bring higher productivity to the real economy? Do you think these things will happen?

Michael Spence: I feel that there are many answers to this question right now, not a fixed answer. Especially for tech giants and large enterprises, they are also thinking about how to implement these things, so there will be many different answers. China possesses one of the world's largest manufacturing systems, and the development of robotics is so rapid. I even think that China should soon become the world's largest country in terms of AI machines and manufacturing embodied robots. The speed of robot development is so amazing, but it also faces challenges. Returning to the theme of our conference today, robots currently still have limitations in terms of spatial intelligence, and this kind of spatial understanding of complex environments and flexible judgment is still an ability where humans have a clear advantage. This includes stability, processes, and the continuous development of complex processes, as well as vision and understanding what is happening. I am not saying to downplay the tremendous progress in robot development, because with Large Language Models, they already interact very well with humans. The optimistic view is that the US and other countries will recognize the challenges they face in the penetration and diffusion of technology into industries, and make changes to align as much as possible with China's policies, adopting and learning from China's policies.

Zhu Min: Yes, that is indeed an open-ended answer; I don't know if they will succeed.

How about you? How does Japan assess the development of artificial intelligence? Japan's semiconductor industry is very strong, and it is currently developing its own models. Do you also believe that the rapid development of artificial intelligence will spread to the real economy more quickly?

Shirakawa: The potential of AI is enormous, capable of helping us improve global production efficiency and the speed of global growth. Japan is a country that has certain advantages in robotics and IT, but now Japan's advantages are fading; compared to decades ago, our advantages are not so obvious. Both the US and China are centers of AI, and the development of AI requires an ecosystem. Regrettably, other countries besides China and the US do not have such an ecosystem. Japan can play a role and be part of the AI ecosystem, but without the full AI ecosystem, it is impossible to become the core of the AI ecosystem. I believe that Europe is also in the process of forming an AI ecosystem. Regarding the issue of AI, we must not only focus on the improvement of production efficiency but also on its impact on society as a whole. Because I used to be a central bank governor, I have a different perspective. When we talk about policy making, the most important thing is how AI policies can gain the support of the general public, because these policies will also affect them. Therefore, there will be certain resistance during the implementation of such policies. So I want to know, in the context of AI's deep participation in social operations, how are viewpoints generated? I am not an expert in large language models; my point of view is that "the results searched by AI should not generate any weight." This viewpoint is neither an expert's nor the public's. AI's viewpoints are not representative, so how we view AI's viewpoints on social media is a topic worth noting.

Moreover, we have also seen doubts in society, so we hope to understand what changes will happen in the future and how viewpoints are formed. Because some people hold some pessimistic views, how we can correct this erroneous mechanism, be able to establish a correct mechanism, and form correct viewpoints, I think this is an important topic.

Zhu Min: That is indeed a well-considered comment. AI will be of some help in improving production efficiency and quality of life, but there are concerns that it will have an impact on employment, and many people hold negative views on AI. Therefore, the state needs to formulate appropriate policies to guide and shape AI for our future. We need common stakeholders to contribute their views together; researchers, companies, the business community, and society at large must work together to establish protection mechanisms. I think what you said is very correct, AI is an open topic. We are very happy to have discussed for 40 minutes and covered so many topics, so it was a wonderful discussion. Since we have many distinguished guests in the audience, I would like to invite the audience to ask questions. Anyone who wishes to raise a question or make a comment may raise their hand.

Zhang Xiaoyan asked: I would like to ask Michael Spence and Governor Shirakawa, we have been talking about the improvement in production efficiency brought about by the development of AI. Governor Zhou also mentioned last night that we also need [to consider that] the use of AI may reduce the employment rate, and AI replacing humans as labor will cause some people to lose their jobs. How should this be resolved?

Shirakawa Masaaki: The development of AI will indeed reduce the demand for labor, which is beneficial for Japan because Japan's population is decreasing and the labor supply is dropping. The upgrading of AI technology will replace part of the labor force, so this depends on the country's national conditions; in the case of Japan, this is not an important issue.

Michael Spence: I very much agree. At a macro level, we know that aging and the decline in the working population might solve certain problems, but we are now facing the development of embodied intelligence. I believe that our use of AI must be controlled and not excessive; otherwise, it will bring certain risks. It is wrong for us to assume that robots will always do things well, so we need a learning process. We learn together; we need to learn how to use AI appropriately. We will find a suitable place for AI, and we will find a suitable way for humans and machines to interact and cooperate.

Another observation is this: multiple surveys now indicate that attitudes towards AI are generally more optimistic in emerging economies, while in developed economies they are less optimistic. Everyone is worried about whether there will be jobs, and in developed economies, we are more concerned about the issue of AI replacing jobs.

Zhu Min: Indeed, everyone is discussing whether AI will replace humans, and whether AI will replace my job. Just as Michael and the Governor said, we will also create new job opportunities. In addition, Michael is very right, which means that in this era of intelligent AI, all of you present here must know how to cooperate with machines and coexist with machines. We must not only consider our own jobs; of course, we can be retrained and take up new posts, but we know that our current embodied intelligence is very intelligent, though of course it may also make some wrong decisions. Therefore, we must not only consider our job opportunities, but also consider the challenges to humanity.

Zhou Yanli asked: I would like to raise a question. Artificial intelligence has been introduced into the field of financial operations, as well as into the design and pricing of financial products. However, this will generate risks. How do we find a solution to solve the regulatory problem? I think this is a concern of ours. Regulators want to regulate the market, but now we can see from current examples the risks brought by AI. How do we solve this problem? How do we handle and manage AI, and regulate AI in the insurance industry, the banking industry, and consumer goods services?

Question 2: ...Regarding regulatory issues, I think this is one of our concerns. Regulators want to regulate the market, but now we can see the risks brought by AI, how do we solve this problem? How to handle and manage AI in the insurance industry, banking, and consumer goods services, and regulate AI?

Zhu Min: AI has been widely applied in the financial system, but the regulatory system has not developed accordingly. What risks will arise from the use of AI in the financial sector? What capabilities should regulators possess to keep up with the times? Regarding the regulation of AI technology usage, who would like to speak first?

Shirakawa Masaaki: The development and progress of technology indeed brings various risks, risks that are truly unknown to us. Yesterday we mentioned that AI does bring some risks. For example, multiple factors can create new connections, leading to associated risks. For instance, a few years ago, there was almost no connection between electricity and semiconductors, but we can see that the development of AI has led to increasingly high demand for electricity, increasingly high demand for semiconductors, as well as explosive growth in the demand for data centers. We see that the connections between factors have changed, and now we are becoming increasingly clear about these new associations between factors. We can see that new connections and new relationships will emerge in the future, which is unknown to us. Therefore, what we need is that we must maintain a humble mindset, and at the same time, we will conduct relevant research.

We can see that Tsinghua PBCSF (清华五道口金融学院) is an important research platform. We need such institutions to hold discussions. We must maintain an open mindset; otherwise, we will have no way to identify potential risks.

Zhu Min: Indeed, an important factor of risk is "speed." We know that AI is developing very fast, and at the same time, the scale is also very large, with all information being recorded.

The third factor is that we know autonomous AI may pose risks, and the speed of change is very fast.

Michael Spence: We know that regulation comes after the fact, and we need to reduce the associated risks. Regulation always lags behind, it doesn't get ahead of things. There might be some proactive approaches in Europe, but I think AI is a transformative process that is changing the way the world accesses information and the way markets operate. The Internet brought about some changes, altering information inequality and asymmetry. In the past, if someone was selling you a car, they could say a lot of things, and you couldn't verify whether what they said was correct. But AI has brought us disruptive changes, and we can obtain more information to make comparisons.

My suggestion is that we need the entire community, including the academic community, regulators, and others, to work together to understand what characteristics the changes in information structure actually have, and to understand them further in depth. AI is very good at counterfeiting; information that we considered beneficial in the past lacks informativeness because AI is very good at imitation.

Zhu Min: Indeed, we can see that the structure of information is changing, and we need to understand it.

Okay, Mr. Branch Manager, thank you very much for your wonderful sharing.

Question 3: We can see that the entire world has shifted from a rule-based system to a transaction-based system. We have two powerhouses in AI, China (中国) and the United States. Speaking of the digital divide, what should other countries do? What kind of models should other countries build? How should they invest in artificial intelligence, and what standards should they follow? In other words, how should the rest of the world cope with such a system? This is a very big question.

Zhu Min: First, we have shifted from a rule-based to a transactional system and world, this is a very big change.

Second, what should other countries do, what should countries other than China and the US do? Especially how to deal with the impact brought by AI, let's invite Michael first, then the Governor to speak.

Michael Spence: Both China and the US have talked about this in Kazakhstan, we discussed this issue a year ago, and we have thought about this in advance.

We can see that the development of AI has brought huge opportunities, because the countries adopting it and the countries signing agreements are different. If I were to give advice to other countries in the world, apart from China and the US, my advice would be "to seize the opportunity." As for China's situation, China brings great opportunities; China has established an open ecosystem, and the overall cost is decreasing. Whether in the US or in China, the cost of AI is decreasing. Whether it is tokens or other digital assets, they are all developing. I don't think it is necessary to pick a side. President Xi Jinping and President Trump have started to communicate and dialogue to determine relevant standards, which is the most important thing. When building frontier models, the formulation of standards is crucial. I would like to ask the Governor to talk about this difficult part.

Shirakawa Masaaki: AI possesses the greatest potential and can be used in multiple aspects, applicable to almost all industries and all fields. However, considering that resources are limited, we must focus on areas where the country has a comparative advantage. Take Japan for example; we are facing an aging population and a declining population. Rapid aging has brought about many troubles, so AI can be used to solve this problem. I often visit nursing homes where the elderly population lives. The caregivers' work is very hard and requires a lot of physical labor. In such an environment, if AI technology is used, it is very effective for detecting changes in the behavior of the elderly or patients with dementia. In many nursing homes in Japan, AI has started to be used; although it is in a very early stage, AI can help nursing homes improve their services. Countries can identify in which fields AI can be used and in which fields AI might bring benefits.

Zhu Min: We must maintain a positive and optimistic mindset, as this will bring many opportunities. We have talked a lot; this opportunity mainly concerns the reform of the international monetary system. We spoke about geopolitical risks, as well as changes in geoeconomics. Regarding the most fundamental geoeconomic changes, we can see that international trade is declining in 2025, but although the share of the US dollar has fallen from 78% to 56%, it still stands at 56%. So we can see that the economy remains unbalanced. China's GDP is lower; previously exports were 16%, and now regarding global reserves, it was previously only 2.1%. We can see that China's economy is growing rapidly. In addition, we can see that AI is another force that can shape CBDCs, as well as stablecoins, central bank digital currencies, and so on. We can see that there is a fundamental change recently, and such a change will appear in the international monetary system. What kind of change is this? Let's invite Governor Shirakawa to talk about it.

Shirakawa: Regarding this issue, I believe that in the foreseeable future, as you just mentioned, I do not foresee any major changes. We see that the international monetary system has always been a "currency of currencies." For example, just like barter trade, barter trade has its intermediaries. It is the same with currencies; we need a currency among currencies, which is the international key currency. Currently, the US dollar is playing this role. In the foreseeable future, I do not think there will be huge changes, because we have not yet found a substitute, and we also see that network effects are at play.

Take the Euro (欧元) as an example; the Eurozone still lacks the impetus for unified governance. For a currency to achieve stability, there must be sound fiscal policies and crisis response mechanisms behind it. Currently, the European debt crisis and the crisis in the Eurozone prove that the Euro (欧元) lacks this underlying stability.

Speaking of the RMB, the RMB's free convertibility is a crucial link. Of course, we see that China is making continuous progress in the internationalization of the RMB, but full convertibility of the RMB has not yet been fully realized. Considering the current situation I just mentioned, there will be no major changes in the foreseeable future.

Going back to the question you just raised, regarding the impact of geopolitical risks on financial markets, and who plays the role of the lender of last resort in the global monetary system. When I served as the Governor of the Bank of Japan (BOJ), the most important thing was the swap lines with the US dollar, which were implemented in 2008. If you ask me what the most important decision I made as a central bank governor was? I would say it was "launching the swap lines."

In the next crisis, especially one triggered by geopolitical risks, what role can such a swap arrangement play? That is the question I want to raise. Now we look at whether there are currency swap arrangements between the currencies of the US, Europe, and China, or if there are existing swap arrangements; once a swap arrangement is formed, its effectiveness will have to be tested in the next crisis. My short answer is that there won't be much change in the short term.

Zhu Min: You made it very clear, and you also provided solid evidence to support your point. This brings us to another important topic: who will act as the lender of last resort? Who is the source of this lending? Starting from Governor Zhou's time, we launched the RMB swap mechanism, which has grown in scale and involved more and more currencies. Your analysis was excellent. Now, let's invite the professor to speak.

Michael Spence: If we compare today's world with the world before, previously everyone acted based on rules, but today's world is different. Today's world makes us feel more unhappy, with more shocks and uncertainty. I will answer this question in two parts.

First of all, it seems that the United States has withdrawn from the multilateral system, including its major institutions. However, in reality, other parts, particularly China, remain committed to maintaining the multilateral system. Although it is said that the multilateral system needs reform, people are still upholding it, including in the financial sector. Therefore, I am not overly worried at the moment that the multilateral system will be completely abandoned. Our previous systems, along with their inclusiveness and benefits, can still be largely preserved.

Regarding what Governor Shirakawa said, I would like to add one point: the Euro has potential hope, but if it wants to become a major reserve currency that receives serious attention, the sovereign markets of the Eurozone—specifically the markets of France, Germany, and Italy—are not large enough. We see the policies adopted by the US itself, and the role of the US dollar is weakening. The RMB has not yet achieved full convertibility. If the Euro wants to play a greater role, its own usage, especially the scale of the sovereign debt market, needs to be further expanded to make it a pan-European currency.

Zhu Min: Okay, our time management is very precise. I have 29 seconds left to summarize this high-level dialogue. We have covered so many topics. First, regarding the current complex and volatile international situation where many developments are happening simultaneously, we must maintain a humble attitude when making assessments. Both of you emphasized this point, and this is a very important insight.

Second, AI has brought a huge transformative force that is changing everything in our lives, and we must adapt to it. Moreover, we shouldn't just consider how many jobs AI replaces or how many new opportunities it creates. What we need to consider is the extent to which AI changes our employment and our society. We haven't yet talked about AI agents, intelligent AI agents, and the payment systems we mentioned earlier. Therefore, we must also recognize AI from a more comprehensive and holistic perspective. As we mentioned before, we used to live in a world based on rules, and now the vast majority of people in the world hope to return to a way of acting based on rules. Therefore, we must join hands and work together to create a better future, which is also the consensus reached by the few of us and everyone else.

This high-level dialogue was truly wonderful. Let's give a warm round of applause to express our gratitude to Professor Spencer and Governor Shirakawa.

Zhang Xiaoyan: Thank you very much to the three guests of the high-level dialogue for your profound insights and wonderful sharing. Distinguished leaders, distinguished guests, the opening ceremony of the 2026 Tsinghua PBCSF Global Finance Forum (清华五道口全球金融论坛) now comes to a successful conclusion. You are welcome to continue to participate in the more than ten thematic forums and closed-door meetings over the next two days to explore the new future of financial development together.

Next, let's move on to the keynote forum session.