We should applaud China’s decision to tighten financial regulation, and in comparison, advocate that the U.S. adopt such a longer-term view, especially under the current healthy economic conditions, Bair argues. China is ahead of the U.S. in using technology to deliver financial services, as well as in confronting regulatory arbitrage.

Policy makers should remove unnecessary regulatory barriers to financial innovations, which will ultimately help consumers. But we should be careful not to undermine the regulated financial system in allowing arbitrage to occur.

A recent report from Morgan Stanley’s research team predicts that China will achieve high income status by 2027. Pruzan advises that, in order to increase the attractiveness of its domestic financial market to foreign investors, China should continue to refine its rules, and if it wants to be a true open market and operate globally, it has to allow international companies to operate as they do in other parts of the worlds.

Fischer praises China for acting “more like an adult” in the recent trade disputes, and stresses the importance of international cooperation and coordination in terms of regulation. He points out that China took part in this dialogue in the “most responsible” way.

But he concludes by challenging economists and observers of China’s financial system to think hard about what degree of risk we should be willing to tolerate when constructing rules for economic activity. No matter how brilliant a country’s financial stewards are, he warns, there will always be crises.

The U.S. has long viewed SOEs as political tools wielded by China. But this view is mistaken — as SOEs were largely constructed to help foster China’s unique development.

In more market-based sectors, China must find a way to maintain high productivity and competitiveness in the face of rising income levels and costs of labor.

Rebalancing: The bilateral trade balance is not a tariff issue, it is a macroeconomic issue. Over the last decade, the world has seen a narrowing of external imbalances, and the two biggest contributors have been the U.S. and China. Imbalances in both countries peaked around 2006 and have started improving, with China’s healthy current account surplus and the U.S.’s moderating current account deficit.

China’s 35 years of reform have been marked by the rise of the market and the increasing importance of the private business. But in the last five years, we’ve seen an erosion of the role of the market in private business and increasing dominance of the state in resource allocation.

The search for solutions to the trade imbalance between China and the U.S. should be viewed under the broader backdrop of the global supply chain. The current supply chain is chosen by the market and any artificial adjustments through a trade war will cost both the U.S. and China.

Global growth is as strong as we’ve seen since the financial crisis, but the good times won’t last indefinitely. Advanced economies can expect short-term growth acceleration but mid- to later-term deceleration. Fiscal stimuli around the world will be phased out, including in large economies such as the U.S. and China, and financial conditions will tighten as central banks normalize their monetary policies.

Public and private returns on infrastructure investments are be very different, so motivations needs to be clearly understood, as do the calculations of how we place value on such returns. Furthermore, we cannot overstate the need to emphasize investment as the key driver of productivity.