Prof. Zhou began his speech by citing world famous economists’ optimal forecasts on China’s economy. After a brief introduction to China’s contribution to world economy, Prof. Zhou analyzed three variables in explaining China’s economic growth: the cost of elements, the institutional cost and the quality of elements. Prof. Zhou emphasized that the rise of China not just relied on the low cost of elements but also on the low institutional cost. The decreasing institutional cost, the increasing quality of human capital, as well as the low cost of elements contribute to China’s rapid development. 

Prof. Zhou also claimed that although the future was optimal, we couldn’t ignore the existing problems. Referring to the three variables, Prof. Zhou analyzed the imbalance and the economic problems in China. Firstly, China’s exchange rate system was far from perfect, causing the rapidly increasing demand and over-heated economy in China. Secondly, the internal reform and opening to the outside world hadn’t gain equal concern in some fields; the institutional cost was still high which forced many enterprises to export their products, making China’s economy highly dependent on export.

In the end, Prof. Zhou mentioned the Eight Percent Protection. He said it was the quality of reform instead of the Eight Percent Protection that really mattered. The prospect of economic development in China calls for two changes: the first one is the proper position of RMB and reform of exchange rate system and the second one is reducing institutional cost and expand real demand.