[Highlight at JD Capital · Future Forum] Cai Lei: China’s History and the World’s Future


This is a revised version of the keynote speech of Cai Lei, President of JD Capital, at the Third JD Capital · Future Forum held on May 25, 2017.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Good Morning, ladies and gentlemen. Thank you, our presenter. Thank you, Mr. Harari. JD Capital’s annual forum invites all of you to meet here in early summer. This time, our friends come from all over China. Welcome!uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

The reason for so many new and old acquaintances to join us here is not JD Capital itself, but that we have gathered the smartest brains worldwide, which brings us forward-looking and revolutionary thoughts as Yuval did just now.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

With reference to our theme, I would like to talk about China and the world, as well as history and future.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Let’s first start with China’s history, which I perceive from three different time spans: 100 years, 1,000 years and 3,000 years.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司


“Left” and “Right” – China’s History over the past 100 YearsuXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

How should we understand China’s history over the past 100 years? Over the past century, China and Chinese people have experienced repeated shocks from social system to science and technology, or revolution. “Revolution” is the most significant word in Chinese people’s memory during the last centenary.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

The most important revolution took place at the system level. Over the last century, Chinese people have made several totally different choices, such as the one before 1949, the one in 1949, the reform in 1978, and the adjustment we are now undergoing.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

These choices actually reflect the value orientation of the social system, namely the difference between the two directions – “left” and “right”. Based on our political understanding, the so-called “left” means pursuing more equal relations between people, while “right” means seeking more efficient economic and social operations. The issue of “left” and “right”, in other words, is the issue of equality and efficiency that we often mention.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

The actual result over the past century proves that it is impossible to stick to the “right” and laissez-faire in China, and in 1949, history took a “left” turn. However, with practices in the three decades after 1949, we found that it is equally unrealistic to overemphasize equality and take an extreme left. Therefore, in the opening up in 1978, we moved a little bit to the right to some extent, and formed the existing institutional system. Despite remarkable achievements, problems also emerged, and there is still room for optimization and adjustment.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

I come to this today because we cannot be detached from the reality. I hope to share with you my understandings on China’s political and economic landscapes. The problem of “left” and “right”, together with its resolution, can actually be found in every aspect of Chinese people’s everyday life.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

For example, the Dragon Boat Festival is about to come. During this national holiday, many people would go outing by car. Though it is not applicable to the Dragon Boat Festival, the country does require that express ways be free during many other festivals. As we can predict, there will be terrible traffic congestion on the way. Some people set out with delight, only to come back with despair after a whole day trapped on the road.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

How to solve the traffic problem during holidays? The “rightists” that stick to market mechanism and efficiency first will give a simple answer: fee collection. Besides, the charge should float based on the severity of congestion to adjust service supply and demand. In contrast, the “leftists” that adhere to equity and equality will question: Now that scenic areas and roads are social public goods and open to the whole public, why should them be exclusive to richer people? And the country is financially capable enough to provide free public goods. The realistic solution is to compromise: market works in normal times, and order speaks under special conditions.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

My overall judgment is that China, like a great ship, has had too many experiences and burdens throughout its history. Instead of being far left or far right, the most proper route for us is the middle one, which is also the safest. While slight left or right can be possible in certain periods, adjustment will always be needed soon to bring it back to the main course. Only by this can we keep on sailing and achieve success.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司


“Open” and “Close” – China’s History over the Past 1,000 YearsuXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Let’s turn the time span from 100 to 1,000 years. Over the past millennium, the most important issue for China has been about its “door”. How and in which direction should the door be open is the key problem facing Chinese people in this period.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

The door is linked with family and house. In around 1,000 A.D., or the Northern Song Dynasty, the Chinese nation virtually stopped active external expansion and ethnic fusion. In other words, Chinese people had basically finished their closure, which defined their homeland and settled them down. At this time, whether, when and towards where should the door be open became vitally important, as they decided the resource providers that our country and people could receive, and where should we reach out toward.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Around 1,000 years ago, Chinese people built up the wall on land and closed the door. However, the country was forced to open up its northern entrance seven or eight hundred years ago, when the Mongolian Nationality, the mightiest one in Eurasia, broke in.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Withover the past 1,000 thousand years, China also had the chance to voluntarily open its door. From the 15th century on, the most significant civilization trend worldwide no longer originated from Eurasia, since seamanship led mankind to the new continent and to globalization. China used to open up in that period, but still isolated itself in the end.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Later, nationalities at the west side of Eurasia and our maritime neighbors in the east forced us to open the door by both sea and land, which almost destroyed the whole Chinese nation.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Of course, to stay closed in history is not totally wrong by modern standards. Considering the historic situation, both closing the maritime door in the Ming Dynasty and building the Great Wall in North China in earlier times were cost-effective arrangements. Over the one or two thousand years, the most significant thing in China is domestic issues, and things like northern conquers or oversea explorations were neither economic nor profitable. After repeated attempts with low return, Chinese people chose to close the door and give up. Nonetheless, we didn’t know that far at the other end of the continent and the ocean, more powerful civilizations and forces were under development. When they came to knock at our door, it was too late for us to react.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Chinese people have deep feelings about doors being broken into. The last 100 years witnessed almost absolute openness to foreign ideas. Moreover, since 1978, China has become completely integrated with the world in terms of its systems. By taking part in global labor division, China has realized historic development.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Currently, an anti-globalization trend has emerged in the world, which has been manifested by Europe and the US in their recent moves. Despite this, Chinese people still firmly choose to open up by carrying out the Belt and Road Initiative that has helped China and its neighbors prosper over one or two thousand years ago. China’s “open” and “close” in the one thousand years, or the choice between openness and isolation, is so influential because it determines China’s success and failure.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司


“Integration” and “Division” – China’s History over the Last 3,000 YearsuXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

The third one spans longer for 3,000 years. While China ranks among the world’s four ancient civilizations, its history of civilization is far shorter than that of Mesopotamia and ancient Egypt. Chinese civilization with detailed historical records can roughly date back to 3,000 years ago, during which period the most important theme is “the nation”. It is about the country’s integration and division, or the issue of unification and partition.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

The history is mostly linear worldwide, with every civilization having a start and an end. Despite its powerfulness, the ancient Rome disappeared, and precedents initiated a totally different history on its territory. This was the same case with the Middle East, Egypt, as well as India.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Yet, China’s history repeats itself continuously, which makes it perhaps the only country in the world with a circular history. Integrations and divisions took place in alteration. Despite of the alterations, the period of unification was much longer than that of division. Besides, the historic trend had never changed.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Chinese people had already began considering unification from 3,000 years ago. Around 2,000 years ago, the First Emperor of the Qin Dynasty first unified the core area of Chinese civilization. From then on, in the eyes of China’s emperors, the issue of China was the issue of the world.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

From the ancient Chinese people’s outlook on the world, the world equals to China. The world is both “Hua”, the central plain areas deeply immersed in Chinese civilization, and also “Yi”, the foreign regions waiting for the guidance of China. In fact, during the past 3,000 years, “Hua” and “Yi” continuously integrated with each other. The world in Chinese people’s minds expanded, but has never went beyond the reach of the original central area. Temporary divisions or partitions may be possible in China, but not in the long run. There must be a unity of all.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Therefore, the concept of “unification” and “integration” have long been running in Chinese people’s blood. The global view of almost all Chinese leaders come from this historic tradition.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

China has been acquainted with globalization for thousands of years; and the only difference is that in old times, globalization only covered limited areas of Eastern Eurasia and the sea in the southeast. Globalization has brought forth many problems in recent decades; and oriental wisdom, accumulated over several thousand years of history, may provide much help in solving them.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Above is a brief summary of Chinese history from the three perspectives of the past 100, 1,000 and 3,000 years respectively. Through this, I hope to help you better understand the present and future of our country and nation.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Next, I would like to talk about the world. In my understanding, the world is one of human. As I mentioned above, the concept of world is continuously changing in the mind of the Chinese people. Two to three thousand years ago, the Chinese believed that the world was the central plains of China; later, they took the Eurasian continent as the world; now, they consider the world as the Earth. In future, however, the world of mankind will definitely exceed the limitation of this planet.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

How to understand future of the world? I have been thinking of a larger angle of time and space. Supposing there is a superior intelligent life observing human beings and human society deep in the universe from a span of 10,000 years, what laws will it discover? What judgements will it make? These judgements must will be the so-called future of our world.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司


The World’s Future I: Globalization beyond Limitation of GlobeuXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

The first major behavioral pattern and its trend that the supposed superior intelligent life can observe in us and our society over tens of thousands of years from outer space is globalization.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

The human beings living now are also named homo sapiens academically. Homo sapiens appeared in Africa tens of thousands of years ago, and gradually spread to the whole world. The process of their integration is going on even faster in a more complex pattern and with more frequent interconnections. This is human’s globalization.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

The first round of globalization took place thousands of or even tens of thousands of years ago, when cognitive revolutions finished, and homo sapiens became able to coordinate and utilize more complex tools. As an individual, in terms of life force, homo sapien was inferior to other large mammals living on the African savannah, such as lions, zebras and buffalos; whereas in clusters, they had remarkable competitive advantages, which enabled them to climb onto the top of food chain without under the threat of other creatures. Thus, homo sapiens left other animals far behind, won the struggle for existence, and stood able to break new grounds.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Driven by hunger and curiosity, homo sapiens finally realized their first global expansion by immigration and reproduction in tens of thousands of years. Admittedly, due to such a long time span, human beings in different regions were totally separated from each other, as if they had been in different planets.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

The second round of globalization was symbolized by the Silk Road, which was developed on the Eurasian continent thousands of years ago. Until the 19th century, human civilizations and creations were mainly found in Eurasia, and only few in North-Saharan Africa. As a result, this land became the stage of the second round of globalization, with the Silk Road leading from east to west. Also, there was a “Maritime Silk Road” leading from Quanzhou, Xiamen to Southeast Asia. Together, they formed the Belt and Road, or globalization at that time, which enabled communication and integration of different regions of Eurasia.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

The globalization we are experiencing now is more veritable. From several centuries ago, the development of seamanship led to the discovery of new continents, and all human beings were linked with each other. Technologies started to be applied during the Industrial Revolution further increased social efficiency, and information technologies and the efficient market mechanism appeared over the past decades turned the whole world into a village. The world became flat.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

The future globalization will exceed far beyond the Earth. Since human will not only live on the globe, the word “globalization” will undoubtedly become outdated. The curiosity, thirst for knowledge and the sense of conquest the mankind developed on the savannah tens of thousands of years ago will motivate ambitious minds to march toward the space. Such events as Apollo Moon Landings and Curiosity’s Mars Exploration are to occur more frequently.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

The first critical trend of our world is continued and accelerated globalization. Over the tens of thousands of years, once such a trend is formed, it is unstoppable and irreversible.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司


The World’s Future II: Technological Revolution Expected to Overturn FutureuXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

The second major behavior and development trend of mankind that the supposed superior intelligent life might observe is that more advanced tools and more complex technologies would be utilized. At first, the mankind only had and threw the little stones collected from grassland; now we are able to cast “giant rocks” into space. Originally, the mankind just upheld a torch that may be blown out by the wind at any time; now, we are able to trigger “great explosions” that can destroy the world at any time.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Able to make continuous progress in scientific knowledge and turning knowledge into technologies to change the world is the second critical trend of human beings over the tens of thousands of years. Technological revolution is the most significant fundamental force. Every round of globalization and related moves are based on technological revolutions.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

It is generally viewed that, there were several rounds of major technological revolutions in history – from cognitive revolution, to agricultural revolution or green revolution, industrial revolution, the current IT revolution, and then the coming intelligent revolution. What lies behind all these is human progress in scientific knowledge, including mathematics, physics, chemistry and biology.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

From my perspective, among all scientific knowledge and technological revolution, the most important ones are the following two. One is the knowledge and technologies related to energy and substance, the most fundamental ones deciding the basic laws of all creatures and the universe. In fact, the most important technological revolutions ever happened were mainly about energy and substance.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

For instance, the agricultural revolution changed people’s way of sourcing energy from food, from randomized, sporadic captures by hunting and gathering, to moderately controllable and scaled transitions from solar energy to bioenergy using farming technologies like planting and cultivation. So did the initial Industrial Revolution. The steam engine converts mass fossil energy into heat that works with machines. Electrical, nuclear and solar technologies are no exception. The way and efficiency human use and convert energy hinges on the operational efficiency of human society.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

The second kind of knowledge and technologies, also vitally important, is related to information. It determines whether we can understand the universe and all creatures and how. It is commonly understood that information refers to a digitized result of everything in this world, and information technology is nothing but information processing. At a deeper level, knowledge itself is information; everything about the universe is information.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Information technology exists with human beings all along. Language and words are typical information tools; people’s thoughts and emotions need to be conveyed with information; and teaching and learning are both ways for the mankind to exchange information. On this account, information is vitally important.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Historically, every breakthrough in scientific knowledge and technological revolution not only greatly enhances the capability of human beings, but also, unfortunately, increasingly casts reverse effects. Agricultural technologies bring us more food, but put us under labor and constraint. The Industrial Revolution frees us from labor, but also enhances our capability to harm each other. The Internet enables people to know everything about the world at home, but makes us lonelier. Human beings acquire great capabilities in transforming nature, but the environment is getting so worse. Intelligent technologies assist human brains, but ultimately, robots will replace us to some extent.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

This is the influence of knowledge and technology on human world. The new round of technological revolution, concerning intelligence, space and life, will also change mankind and shape future in a more remarkable way. While these technologies can be compared to the super power human beings developed to deal with problems of future, whether they can generate good results depends on their users.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司


The World’s Future III: Social Model Still UnknownuXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

The third key discovery from the supposed observation on human world might be that the number of such species on the Earth is on continuous increase. The continuously enlarging species is sometimes in order, but sometimes in a mess; sometimes help each other, but sometimes kill instead. The future is almost impossible to predict.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

This is a matter about the control and governance of the human society. Over the past tens of thousands of years, we have been longing to fundamentally solve social problems. Though we came up with many tools and made substantive achievements, a panacea is yet to be found.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Civilization, including moral ethics and legal regulations, is a kind of tool. It regulates human behavior, such as the relationship between male and female, the old and the young, the public and the private, etc. either coercively or non-coercively.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Organizations, including families, nations, countries, religions and –isms, constitute another kind of tool. These organizations were designed by our ancestors to effect large-scale human governance, with numerous splendid or tragic stories underlying each of them.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Moreover, there are bottom patterns regulating social operation, such as market, planning, democracy and dictatorship, to name but a few.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

However, we all know that all things mentioned above cannot solve all problems we face, as all have historical restrictions, and are continuously changing. For instance, the classic doctrines are always being adjusted; otherwise, religions might have been eliminated over time. For another instance, nation gradually changed from a biological concept that stressed consanguinity into a cultural one. Still, with regard to modes, there has never been such a country in the world that is purely planned economy or market economy, nor is absolutely democratic or dictatorial.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Why? Though technological innovations can be made in laboratories under controlled conditions and in controlled scale, models for social governance can only be developed through cautious attempts. There is no laboratory for the system design of human society; and once implemented, the system would become part of social operations which cannot be subverted and cancelled. The cost of failed experiments can only be life and time. Human beings have had too much lessons in this respect.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Knowledge on social operations include social sciences such as economics, politics and history. Due to limited research methods and conditions, they are still too primitive and rough. We apply those knowledge on a large scale without knowing the consequences until years later. However, we would already have paid for them.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Another key issue is that we do not know whether many of our models for social governance can bring happiness and delight to every individual. Then, what is the ultimate value of such models?uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Mankind in future is expected to be faced with even stronger influence of technological revolutions both as individuals and as an entirety. Meanwhile, as our capability in social governance has yet to make revolutionary progress, the future of human beings is indeed unknown. We can only hope that when muddling through the river, we will not be devoured by unknown tides. The good thing is that we still have some experiences and lessons over the past tens of thousands of years of exploration.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司


The World’s Future IV: Multiple Implications of FutureuXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

In my point of view, future has multiple implications.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

When talking about future in its physical sense, future is time, or the time yet to come. The time that has elapsed is history; the time we are experiencing is present, and the time to come is future. How to understand time? Time is the direction of cosmic evolution, or that of entropy production, as we discussed earlier.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

When talking about future from the perspective of every individual, future is meaningful. For every one of us, life is limited. It only makes sense when we talk about future of an individual within his/her life span. Once life is over, everything about that individual, being famous or infamous, would be meaningless to himself/herself. The so-called future of an individual is the unexperienced feelings yet to come within a limited time. If the feelings unexperienced are similar with experienced ones, his/her life might be ordinary; but if they are remarkably different, then he/she might live a more special life. The pursuit of life is quite individual. Many would opt to live a more colorful and valuable life, because if every day to come is the same with the past ones, there will be no need to experience.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Still, we can talk about future in its collective sense. Lives of social groups are also limited, only groups are more likely to outlive individuals and realize greater succession. Groups may experience evolution through mutation and iteration, adapt to environmental changes, and then survive and reproduce. It can be said that for groups, the meaning of future is to evolve.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

Last, let’s focus on future in the sense of life. We talked a lot about future, and Yuval also said that future algorithm might rule all. Life means energy conversion that can be defined by algorithm. In this sense, life seems to be predetermined.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

I do not quite agree with this argument. All that we perceive at present is within the knowledge system we have now. If human beings continue to develop based on the current knowledge level, there would be no future. Yet, the unknown awaiting further exploration should far outnumber the known.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

My understanding is that, we must fight against predestination. The value of life lies in its uncertainty, unpredictability and possibility. Before the end of his/her physical time, an individual can actively pursue different experiences, and groups can accommodate coming uncertainties – these are the real meanings of life. Nothing is impossible in future, and possibilities lie in the process of every individual and group exploring the unknown, as well as in their own understanding and grasp.uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司

These are my thoughts for sharing today. Thank you!uXz九鼎投资(600053.SH)_上交所私募股权投资领域上市公司