SCIO briefing on China's debt issue

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Li Yang, committee member of the Chinese Academy of Social Sciences and chairman of the National Institution for Finance and Development of China

Xi Yanchun, vice director-general of the Press Bureau, State Council Information Office

June 15, 2016

Xi Yanchun:

Good afternoon, ladies and gentlemen. Welcome to the press conference of the State Council Information Office (SCIO).

Recently, China's debt issue has attracted great attention from the media, but it is a highly technical issue. To help you gain a clearer understanding of China's debt situation, we invited a professional to give you a brief introduction and answer your questions.

Now, I give the floor to Mr. Li Yang, committee member of the Chinese Academy of Social Sciences and chairman of the National Institution for Finance and Development of China. He will brief you on China's debt and answer your questions.

Li Yang:

Good morning. I'm glad to have a chance to talk with you on a topic that has attracted great public attention. What we are going to talk about is China's debt. There have been many forecasts and analyses on this issue from both government and non-government organizations. Today, I would like to share with you my opinion as the leader of an independent national think tank. Just now, the host has introduced me as the chairman of the National Institution for Finance and Development of China. This institution focuses on the study of finance and development issues.

We have studied the debt issue for a long time. In 2010, we started a research program in this field and have achieved a series of academic results. Now, please allow me to show you some of our achievements. This is the 2013 National Balance Sheet of China and this is the sheet from 2015. We'll produce an analysis report on China's national balance every month. When we talk about China's debt, we must always take account of this sheet. Only in this way can we have a deep, full and sound understanding of the situation. Now, let's take a look at China's debt under this framework.

By the end of 2015, China's total debt was 168.48 trillion yuan and the overall debt-to-GDP ratio was 249 percent. As for different sectors, the debt ratios of the household sector, the financial sector and the government sector were 40 percent, 21 percent and 40 percent respectively. But the figure for the government sector might be higher, reaching 57 percent, if we add part of the funding platforms' debt and the contingent debt into government debt. Currently, the non-financial corporate sector is more problematic than the others, with its debt rate reaching 131 percent by the end of 2015. Moreover, if we take into account the debt of funding platforms (part of it falls into the category of government debt), the debt rate of this sector was 156 percent.

One thing to be noted is that funding platforms appeared twice here. That's because their case is very special in China. Many funding platforms have a government background. They are often closely connected with local governments. Therefore, part of their debt should be seen as the debt of local governments. Meanwhile, we can't simply treat all their debt as government debt and add them together, because from a legal perspective, local funding platforms are independent, and their debt should be seen as corporate debt, which has nothing to do with local governments. Nonetheless, in China, many funding platforms are indeed related to local governments, so we have to mention this sector twice here.

I have noticed that many analysis reports have different views on debt indexes. The main reason is that they have treated such debt differently but failed to explain their methods, thus resulting in confusion.

Generally speaking, China's debt is not high. If we compare the debts of different sectors in China with the United States, we will discover that the debts of the household sector and government sector in the United States are higher than China, but the debt of the corporate sector is lower than China. Therefore, when we discuss the debts of different countries and the possible consequences on their economies, we must also consider their special conditions and how advanced their economies are. It's wrong to treat them all alike.

The debt level of the Chinese government is manageable. By the end of 2015, the central government debt subject to budgetary management totaled 10.66 trillion yuan, while the same debt for local governments was 16 trillion yuan. Combined, they totaled 26.66 trillion yuan and accounted for 39.4 percent of China's GDP.

If we look at this issue from a broader perspective and include the debt of local funding platforms into government debt, China's overall debt-to-GDP ratio was 56.8 percent, still lower than the EU ceiling of 60 percent. Therefore, the risk is not very high.

Now, I would like to give you the statistics of a number of other countries. The debt-to-GDP ratio in Japan, the United States, France, Germany and Brazil is around 200 percent, 120 percent, 120 percent, 80 percent and 100 percent respectively. I hope these figures can help you better understand the complexity of the debt issue.

Local government debt should be analyzed in more depth. The issue is highly complicated and the analysis here mainly focuses on the liquidity of local governments. There is an indicator called the "debt ratio" with the debt balance as the numerator and the comprehensive financial strength as the denominator. The numerator shows how much is owed and the denominator indicates how much can be used to repay the debt. If the debt ratio is less than 100 percent, the debt can be paid off. The current debt ratio of the local governments stands at 89.2 percent, which is lower than the international warning line. Yet, the issue is highly complex. If the time dimension is introduced, the life of debt could be very short and the term of your assets could be longer, leading to a mismatch of maturity. For example, you have to pay a debt, but you are unable to pay it now, you will earn money in the future. If this is the case, the problem can be smoothed through financial means.

When we speak of debt, our discussion is usually based on the debt itself. In compiling the national balance sheet, we discuss the debt from its purpose. The debt usually goes with the output. The best way for us is to discuss the debt with the assets involved. In addition to analysis of the debt itself, our discussion of the debt problem also involves the assets produced from the economic activities linked with the debt, that is, the relationship between these assets and the debt, which shows the full picture of the debt issue. The economic prospect will be much better if the assets are taken into consideration while discussing the debt problem. Our analysis shows that China's sovereign assets and liabilities stand at 227.3 trillion yuan and 124 trillion yuan respectively as of the end of 2014, with net assets of 103.3 trillion yuan. This analysis was made under a broad definition of assets, including the land resources and buildings. Considering the fact that land resources have poor liquidity, we deduct these assets of nearly 100 trillion yuan to get the net sovereign assets of 28.5 trillion yuan under a narrow definition of assets. The 28.5 trillion in assets is of high liquidity and can be exchanged for cash to repay the debt. International analysts cite the figure in the inclusion that China has enough assets to cope with the outbreak of potentially devastating crises 1.5 times over. The international communities assessing the volume of China's non-performing assets concluded that the 28.5 trillion in assets can roughly cover this estimated volume. Based on the analysis, it is safe to say that the outbreak of a debt crisis is highly unlikely. In other words, even if debt problems arise in China, we are still able to resolve them orderly without a significant negative impact on our national economy.

You may notice that the economic data of 2014 was referred to when I talked about the assets and liabilities, while the figures of 2015 and even that of the first quarter of 2016 can be used in analyzing these liabilities. This is a difference in the structure of the analysis theory. Asset discussion involves a physical sheet, which takes into account the physical economic achievements made from the liabilities and evaluates the achievements as well. The result of the physical sheet is about two years later than that of a financial sheet, as is the case with fund flow statements. The physical sheet of 2015 may not be prepared by the end of 2016. I would like to discuss it with you in the future. This is what I wanted to first share with you regarding China's debt and balance sheet. We will elaborate on it later.

First, China is a country with a high savings rate. All the debts are supposed to get paid, but where does the money come from? The reason behind the social unrest resulting from debt problems in many European countries is their zero or low savings rate, with the notable example of Greece which suffers from a negative savings rate. China boasts a high savings rate. Outstanding debts, if there are any, are domestic ones and can be dealt with by the Chinese people themselves without producing a transformative or disastrous impact on the world at large. This is very different from other countries. We can also examine other countries' debt problems from this perspective. Japan, for example, has a high ratio of government debt-to-GDP, and the media is quite obsessed with the problem, which, in their opinion, can lead to bankruptcy and a negative economic outlook. Its liability is actually not a problem because it is indebted to its companies and citizens instead of foreign creditors. This is also the case for China which enjoys positive net foreign assets and only a 3-percent ratio of foreign liability to total debt. A high savings rate enables us to smoothly deal with the debt by ourselves, which is different from countries with a low savings rate. This is something that we should keep in mind.

Second, China's financial market is quite unique in that its direct financing dwarfs indirect financing. Our savings mainly flow to banks, the very institutions for indirect financing, which are responsible for lending them out. Under China's legal framework, banks make loans to companies and companies then have liabilities in their balance sheets. China's huge number of savings then becomes a source of funds and, in most cases, liabilities for brick-and-mortar businesses through the banking system. Therefore, China's high liabilities are closely related to its financial institutions. But the stakes are different for various financial structures when confronting debt issues. For countries like the U.S., the savings of its citizens are mainly used to buy various financial products like stocks, bonds and funds, and solvency is vital for an economy with this kind of financial structure. The subprime crisis, which began with the busted Lehman Brothers, sent shockwaves through the whole financial system. In this sense, for market-dominated financial systems, solvency is of critical importance. On the contrary, for those dominated by financial institutions like the Chinese financial system, liquidity rules everything. So, when examining a country's debt and its risks and potential stakes, we should take its financial structures into consideration. To sum up, for the financial systems like that of the U.S., solvency is very important and should be maintained within a certain category, while for financial systems like China's, liquidity is a priority. China has continuous incoming capital, and that is something we want to share with you.

Third, China's debt problems are mainly concentrated in its business sector, with state-owned enterprises (SOEs) taking up 65 percent of the total. Therefore, solving debt problems for Chinese companies closely hinges on handling the problems for SOEs. Moreover, as state-owned enterprises and banks, local governments, and the central government are in the same ownership, China has a unique way of dealing with non-performing loans, which will never happen in western countries because the parliament will not approve of the government lending to private businesses. But in China, the government can reach out for money from one "pocket" to make up for the losses in another in the name of reallocation of assets as approved by popular will. This highlights the concept of "broader government," which includes state-owned enterprises and financial institutions, local governments and the central government. China's current debt problem lies in this broader government which has more room to transfer money from one "pocket" to another. And this practice is quite different from that in other countries.

Generally speaking, it is really soul-stirring to for us see the statistics. However, after an in-depth analysis of its structure and both the previous and current situations, our worries that China's debt may lead to risks are overblown. Of course, this is a problem worthy of vigilance. Letting it spread will bring some of the economic vitalities under constraint. If we keep doing this, the net wealth of society will decrease, which will certainly be detrimental to long-term economic development. Therefore, we must give full priority to this problem.

Furthermore, this problem cannot simply be solved by a single department, such as fiscal and financial departments, banks, business chambers, and the National Development and Reform Commission. It is a comprehensive economic phenomenon, so it needs to be solved holistically and in a unified way.

I remember the First Deputy Managing Director of the International Monetary Fund David Lipton. Yesterday when we were discussing the G20's prospect, I invited him to join. But he said that he really could not come because he was discussing China's debt problems and economic prospects with important Chinese officials. I noticed that Lipton's proposal was for an integrated team to coordinate all parties to solve the problem. I heartily agree with this.

This problem in China will likely become very serious if it is viewed in individual sectors, and there will be no way out. But, if we put it on a full spectrum and adopt coordinated and consolidated approaches, it will not be difficult to solve the problem.

Of course, we need a unified solution, a unified institution, a unified understanding, and a unified strategy. And we cannot let it continue to worsen. Therefore, holistic approaches must be adopted to address problems involving the reduction of the debt and bad assets, and the reform of state-owned enterprises and financial institutions. In this sense, Lipton's advice is very insightful.

So much for my introduction.

Xi Yanchun:

Now let's move on to questions. Please introduce the agencies you represent before raising your questions.


Since 2016, China's credit risk has been increasing and defaults have been on the rise. People are paying a lot of attention to the rating bubbles and they believe the credit rating has become a bottleneck in the development of China's bond market. As a result, rating agencies have come under criticism. How should we use the market mechanism to phase out these bad or under-performed rating agencies, and change the current regulation model based on departmentalization?

Li Yang:

Before talking about credit risk, I would like to introduce a related concept known as "rigid payment." Before defaults occur, people without exception believe that there exists "rigid payment" in the credit market, especially the bond market. Many would say that "rigid payment" is cancerous for the market. Actually, it is. If we only have "rigid payment" and no difference in credit, there would only be governmental credit in China. Under this assumption, rating bubbles will surely occur and we would all have AAA ratings. In addition, there would be no disparity between interest rates and the rate of return. Basically, government bonds in any country are credit-worthy "gilt-edged bonds." In the market, bonds with higher credit ratings typically pay lower interest rates. However, things are different in China. It is more likely that government bonds demand higher interest rates. In other words, the government has to pay higher costs than companies to raise money, which is absurd. How can we escape this phenomenon, especially the "rating bubbles" mentioned above? Micro-units in the market should exert their own credit and try to step out of the shadow of government credit. If so, there will be defaults in the market.

Our laboratory held a meeting two months ago. It seems that we haven't done a good job in terms of the publicity (for the meeting). We have been doing research on the first default which occurred in 2014. The scale of credit default is growing larger in China's market, from small companies to the big, from private companies to state-owned companies, and from economically backward regions to more developed regions. This is what we have drawn from our research. How should we evaluate this? How should we relate it to "rigid payment?"

Actually, credit default is the necessary tool to break from the "rigid payment" system. Defaults will lead to many financial incidents. In this sense, we should pay high attention to credit default. In our eyes, it represents a stage that China's credit market, especially its bond market, has to undergo. Chinese companies will eventually do away with their reliance on the government. When companies exert their own credit and investors make decisions based on the evaluation of their credit, the market will return to normal.

But we have to control this process and not let things run wild. There might be malice defaults in debt restructuring. When a company defaults on its loans, it may undergo restructuring or turn its loans into equity. The worst scenario would be if the market mechanism breaks down in the aftermath of defaults. Therefore, the authorities should pay high attention to this to control defaults within the legal framework.

Once the market runs according to its own rules, the legal framework will be increasingly important. Everything in the market including defaults, liquidation and bankruptcy should not go against the law. If so, the occurrence of credit defaults will mark a new stage in the development of China's market which will have to undergo a process of "rising from the ashes."

TV Asahi:

Yesterday, David Lipton, the IMF's first deputy managing director, expressed his concern regarding China's debt issue, especially corporate debt. Although it is still inside the country's control, the amount is quite large and with a fairly rapid growth rate. If the debt keeps increasing, it may get out of control. What do you think about his opinion?

Li Yang:

After we worked out China's national balance sheet for 2013, we submitted the English version to the IMF, which became an official document in the organization. From that, we can draw a reasonable conclusion that the IMF may consult our research. That is, we feel the same way the IMF does about the issue. We started researching early into the debt issue. We have voiced our view that corporate debt is the major problem with China's debt. The creditors are mainly banks. If corporate debt experiences problems, it will be bad for the bank. Banks are mainly state-owned. If problems arise in banks, it will be bad for the country's finances. If problems arise in corporations and banks, it will be bad for the economy. These form a reasonable chain which reflects China's situation. Analysis along this chain makes China's corporate debt worthy of attention. Therefore, we share one conception with Lipton. The rational solution is that we need to uniformly and comprehensively treat these problems, even those which seem to have no relevance. For instance, the debt issue is relevant to problem debt. If the debt is not bad, it will be held by interest payments. If the sums of cash flow produced by debt could cover the interest, the debt would not have any problems and be sustainable. If the debt is bad, its sustainability will be undermined. The worse the debt is, the bigger the risk is. The core of the debt issue lies in non-performing debt.

According to the balance sheet, the assets are liable for the debt and the bad debt is related to non-performing assets, which represents industrial overcapacity and overstocking in the real economy. Therefore, deleveraging, overcapacity reductions, inventory reductions, reducing the debt level and solving the problem of non-performing assets represent aspects of the same issue. We should consider all these issues together and discuss the problem in terms of the whole country. Which region has less debt, which has more, which is bad and which is good? We should consider all these problems together.

First, addressing debt problems should be connected to addressing bad assets. The core of debt is its non-performing part.

Second, China's debt comes mainly from corporations, especially from those that are state-owned. Therefore, addressing the debt problem should be closely connected with the reform of state-owned enterprises. We noticed that the president, premier and regulatory authorities all talked about the reform of enterprises.

Third, solving the debt issue should be related to the construction of marketization and a marketing approach should be used. Bad debt is not equal to a complete insolvency. International experience shows that if a debt is defined as bad it could be sold at 45 percent off the original price. The price is not zero. The debt has residual value and how to price it is a problem. In the past, book assets were taken away, which is not a marketing approach. We should settle the issue using a marketing approach. If international investors with enormous funds are involved, there will be a high chance of restructuring.

Fourth, legality must be insisted. Everything should abide by the law. Treating problems should be based on overall analysis and arrangement.

Hong Kong Cable TV:

I have two questions. First, speaking of debt issues, a key aspect this year is transforming debt into shares. Since there are different opinions in the market, I want to ask whether transforming debts into shares will help solve debt issues, and what progress is being made regarding this transformation? For my second question, news broke regarding Morgan Stanley's announcement that the A-share won't be included into the MSCI. I want to ask why and how this will influence the A-share as it seeks to go global.

Li Yang:

In theory, the transformation of debt into shares is a possible solution for debt issues, depending on how you use this method. If we use it in non-market economy conditions, or a framework without the rule of law, it could be catastrophic. Starting last year, I participated in many discussions, both open and private, regarding the transformation from debt into shares, and I got the impression that when facing these issues, both the government administration agencies and the research branch have clear and resolute views that this round of transformation must stick to market principles and be law-binding.

Only in this way could the transformation from debt to shares be a contributing factor to the enhancement of the rule of law and the deepening of the market economy. Otherwise, it will be a negative factor. We have to make such things positive. The 18th CPC National Congress along with its third, fourth and fifth plenary sessions, and the annual Central Economy Work Conference in recent years all reiterated that we should uphold the abovementioned spirit while dealing with the transformation.

As for your second question, whether the A-share should be included in the MSCI, each party has its own considerations. I personally think that the Chinese stock market still needs adjustment, particularly in its fundamental regulations. Being included in the MSCI can hardly be a good thing for us now. Although on the positive side we could say we are recognized by the world and we can influence the world, yet we have to follow market principles. In other words, we understand that there are still improvements we have to make in our stock market operation and marketization.

Since last year, we have found a number of problems in dealing with this issue. Some problems are in the market itself, and some are chronic. I think the problems in the Chinese stock market still need deliberation. We once set many development targets for China's stock market, but now it seems that new conditions – including China's growth and the new features of global stock markets – will make us reset those targets.

It doesn't matter if we are in the MSCI or not, but we should do our business well. A cheerful thing is that the central authorities are guiding our stock market, along with other financial markets to develop in the direction of marketization and the rule of law.

Die Welt (Germany):

My first question is similar to the one posed by the Japanese reporter. David Lipton said during his visit here that China should take urgent measures to solve debt issues. His numbers are somehow different than yours; some proportions are higher in your description while he said they were 225 percent and 156 percent. So, what measures will the Chinese government take to solve the debt issues? Just now, you mentioned there should be an overall approach to solve this issue. So, is it just your proposal or has the Chinese government started to work on such measures to solve the overall debt issues?

My second question is about China's growth rate. For the past 20 years, China's growth rate has been fairly high, which to a large extent has helped solve many debt issues. But as China's growth slows down, debt issues become more complicated. Under these new circumstances, what measures can help the country control its debt issues?

Li Yang:

Lipton said the social leverage rate was 225 percent, and my figure is 249 percent. But his statistics only covered sectors of the real economy, excluding financial sectors. This difference is quite noticeable. The figures themselves represented the same thing, since much of their research was based on ours.

Regarding your question on overall solutions, as I know, we don't have an agency responsible for an overall approach. But we are working on this matter. We, as think tanks, often hold discussions for departments of the CPC Central Committee and the State Council, in which we gradually form a consensus that overall considerations are needed. The Ministry of Finance may say that it only cares about the government debt, maybe it cares about those of the central state-owned enterprises and financing platforms as well, but it doesn't care about the debts in the corporate sector, or the debts of the central bank, banking regulatory commission, security regulatory commission or the insurance regulatory commission. However, the central bank and the three financial regulatory commissions were unable to solve the problems of China's financial sectors completely; therefore, a unified approach is needed. We have reached a consensus for this issue but we haven't formed such an arrangement, although I believe there will be one soon.

As for your concern about the relation between China's debt and overcapacity, I admit you have keen observations, and your question is quite good. You mentioned that China's high growth rate helped solve the debt issues. Reversely, the previous high growth rate obscured the debt issues. In other words, as long as China's economy grows, no problems emerge. But when growth slows down or even halts, problems are bound to surface.

China did have a slowdown from the previous rapid growth, so that a number of problems appeared. We explained this idea many times in the past. Solving debt issues, in its essence, means deflating the bubbles accumulated in the past when we excessively addressed the high-speed growth rate and valued the GDP as more important than anything else. We grew fast in the past, but had lots of bubbles. Working off years of bubbles is like squeezing out the water in a sponge.

Solving the debt issues and bad capital issues are fundamentally similar to removing bubbles. I put the two issues together because sometimes capital will be needed to patch the gap of non-performing debts. This requires determination.

There's a saying on the web, one has to pay off his debt sooner or later. Debt issues have to be solved. High growth rates can obscure the problem, but when growth slows down, even a little bit, the problem will emerge. Therefore, in order to lay the foundation of future development, we must consolidate our foundation and solve the problems accumulated in the past decades of the medium-to-high growth rate. This is a leading principle in supply-side structural reform and the new normal of economic growth.

Phoenix Television:

A vice governor in Hubei Province recently expressed his concern about the decline of the housing prices, afraid that the burst of bubbles might result in severe consequences. For the past two years, multitudes of scholars and local officials have become aware of the bubbles ballooning in the housing market, and are now worried that with the risk of downward pressure on the economy, any slide in the real estate sector will possibly trigger a local debt crisis. How do you view this issue?

Li Yang:

This is why I have reiterated that the problem cannot be solved until it has been considered in a comprehensive way. A partial attempt will not successfully solve the problem. But it will be different when we find the causes of the problem, then we can eventually find a solution. The local governments and real estate developers are in the same boat when they sell land and houses to yield revenue and sustain employment as long as the housing prices do not fall. The logic is correct. But the real estate bubbles, especially in the second and third-tier cities, have long been there. The decision made by the central government is to reduce the inventories of the housing market, a move understood as destocking in view of the real economy and as bursting bubbles in the financial perspective. It is an adjustment that we have to put up with. We need comprehensive solutions.

China Daily:

Just now, you mentioned that the non-financial sector has outstanding problems which, as some analyses reveal, may affect China's mid- to long-term economy. Please share your opinion on this.

Li Yang:

China's non-financial sector and enterprises are a different situation. Now, the whole world faces debt issues, and there is no exception to China. By comparison, China's debt pressure is not the most serious; we are at the middle level. However, the hidden troubles for China's debt crisis are different from other countries' troubles. From a microscopic view, it's mainly about non-financial enterprises, many of which are State-owned. Due to China's special financial structure, the debt issues of State-owned enterprises are closely linked to banks' assets. In other countries, a close connection like this usually doesn't exist. So, the serious thing is, if the non-financial enterprises have problems, China's financial system will have problems. And China's financial system is also special, which is closely linked to the government. So, the problem will also affect the fiscal situation. If the non-financial enterprises, financial enterprises and financial sector all have problems at the same time, China's economy will indeed see systematic risks. Therefore, the problems of China's non-financial enterprises should be dealt with seriously.

We have noticed that despite experiencing a huge crisis, the non-financial enterprises of the United States are fine. So, it has to resolve the government's debt issues and citizens' debt issues, which are different from financial issues. Hence, the U.S. adopts other solutions. But in China, it will be a critical problem, since there exits such a close connection. For China, to resolve debt issues may be more urgent than it is for other countries. Our debt level is not that high, but because of such a close connection, it is a little more serious than it is for other countries. With this in mind, other assets and measures on this chain can be mobilized and used comprehensively. So, this is a unique approach that no other country can have. When we say our economy has flexibility and space to move around, we say that based on this connection.

China Business News:

David Lipton, the first deputy managing director of the IMF, said that China's plan to rid banks of bad debt may backfire and enable debt-laden "zombie" companies to stay afloat. What do you think of that? Should we help those companies? If we should, to what extent? And how far should we go in terms of asset securitization?

Li Yang:

This is indeed a problem. The core of resolving high debt is resolving bad debt, which is related to zombie companies, excess production capability and excess housing inventory. In order to resolve these issues thoroughly, we cannot let zombie companies stay afloat. The Chinese government, President Xi Jinping and Premier Li Keqiang have made clear that such companies should not be allowed to survive, and they also mentioned the "slimming down" of bloated state-owned enterprises. The measures we call "sanqu" (the three measures of lowering production capacity, destocking, and deleveraging) are aimed at resolving these problems. They have made clear, at least theoretically with regard to overall policy, that zombie companies should not be allowed to stick around. Rumor has it that these companies will be kept. It's complicated and may have to do with employment in some particular places. We've noticed what David Lipton said, and we also noticed that Chinese companies, especially state-owned enterprises, often shoulder social responsibilities. Thus, it is not merely an economic issue. For example, allowing a number of inefficient enterprises to stay afloat does not mean allowing the inefficiency to stay, but means maintaining employment and social stability. Mr. Lipton has talked thoroughly and clearly about this issue, so we don't have to complicate it (by saying more).

Xi Yanchun:

After everything discussed at the press conference this morning, you have probably discovered that the debt issue is not a simple issue. Mr. Li Yang examined it against the backdrop of China's social and economic development, and came up with comprehensive measures in response to it. If you have any other questions in mind, please let us know; we'll invite officials from the concerned departments to meet with you.

Thank you. Let's call it a day. Thank you, Mr. Li Yang.

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