On October 18, 2023, BAI Chong-En, Mansfield Freeman chair professor, Dean of Tsinghua SEM and Executive Dean of Tsinghua IGD, held a dialogue themed on "Permacrisis: A Plan to Fix a Fractured World” with A. Michael Spence, Philip H. Knight, professor emeritus of management at Stanford University, 2001 Nobel Laureate in Economics, and a member of the Tsinghua SEM Advisory Board, at the Tsinghua Management Global Forum.
BAI Chong-En speaks with A. Michael Spence.
Spence delivered a keynote speech titled "The Global Economy in the Next Generation." He called attention to "regime change in the global economy" and discussed the shift from demand-driven to supply-constrained growth. This transformation bore significant consequences, such as the "first inflation in 20 years," "delayed responses by Central Banks," "rapidly diminishing fiscal capacity," "climate emergencies," "increased indebtedness," and "growing inequalities and pervasive insecurity." He stressed the pivotal role of technology and scientific advancement in achieving economic sustainability. "A huge amount of new technology is associated with massive energy transition. This makes technological tools and clean energy more accessible. Take solar costs for example: China has played a major role in this and in driving solar costs down," Spence said.
Professor A. Michael Spence delivers his keynote speech.
During the dialogue section, BAI posed questions about AI technology, new growth models, the digital divide, and globalization, all of which were central themes in the new book. He touched upon the rapid advancements in AI technology exemplified by the exponential growth of ChatGPT users, which reached 20 million in just two months. In response, Spence outlined his vision of the future of AI, saying it should act as a digital assistant to augment human capabilities rather than replace them. A significant portion of the new book focused on the concept of "the new growth model," which advocated actions that tie economics, finance, institutions, politics, and societal well-being together.
The dialogue also encompassed a discussion between BAI and Spence on the parallels between the new growth model presented in the book and the "Chinese version of high-quality growth." Elements such as "inclusiveness," "living harmoniously with nature," and "balancing security with development" were recognized as crucial concepts in China's development strategy, although these are often misconstrued by Western societies. Both scholars expressed the hope that China could improve its international communication to rectify these misconceptions and facilitate better collaboration with foreign partners.
The "digital divide" emerged as another significant topic in this dialogue, with a focus on the challenges faced by smaller countries in training AI models using their own data. Spence underscored the need to take this digital divide seriously and incorporate it into a policy agenda.
BAI inquired about the shift from "hyper-globalization" to "managed globalization." Spence said the ascent of nationalism and geopolitical tensions have cast a shadow over the concept of a multilateral world. "Managed globalization" encapsulates the idea that the world is not returning to the post-war structure. Instead, it is addressing contemporary challenges and formulating international policies at the national level. Spence emphasized the importance of paying attention to previously neglected effects, such as the distribution of impact, in the context of this "managed" concept.
BAI and Spence discuss topics in the new book.
Towards the conclusion of the dialogue, Spence shared anecdotes from the writing process. Despite the four authors coming from vastly different professional backgrounds and holding divergent perspectives, they were united by a shared concern about the world their children would inherit. The collective aspiration to present an agenda for enhancing their future brought them together.
The audience displayed remarkable enthusiasm through the final segment. They posed questions to the two professors, asked about AI's impact on the market environment, the collaboration between China and Europe, the digital divide between younger and older generations, and the shifts in international trade dynamics.
