Following is the transcript of a CNBC interview with Takehiko Nakao, President of the Asian Development Bank, at the China Development Forum in Beijing. The interview was broadcast on CNBC's Squawk Box on 27 March 2018.
All references must be sourced to a "CNBC Interview'.
Interviewed by CNBC's Martin Soong.
Martin Soong (MS): We have to start this conversation by asking you for just a few comments. Just your reaction to what everybody here at CDF you're talking about and what people are very worried about as well, that there could be a trade war brewing. How worried or concerned are you?
Takehiko Nakao: It's very difficult to tell what will happen in the coming months. But generally speaking I'm no expert on trade because ADB is for development. But generally speaking, the Asian countries, China included and also America and other trade partners have enjoyed the fruit of the world trade system, foreign direct investment with each other for decades and after opening up and reform of 1978, China is one of the biggest beneficiaries, but the world also has been enjoying it. Of course there are growing inequalities, some issues for workers in some countries, we should pay attention to that, but at the same time we should make the effort to preserve the system of free trade and also investment.
MS: I think a lot of people would agree with you as well. Mr. President if I may ask you, we are talking to you in your capacity as the head of the ADB of course, but in a previous life obviously you were probably the most senior Japanese civil servants as well. So from that perspective can I ask what was your reaction to news that a lot of countries were exempt from the steel tariffs, that Japan was not – what do you think is going on there? Japan is supposed to be an ally.
Takehiko Nakao: I don't know what was the reason and I don't know about the background so I can't comment about it.
MS: OK fair enough. Here at the CDF of course you came with a very specific message. What did you want to tell people?
Takehiko Nakao: Yes so China is now coming to a new era and China has already achieved a lot in these 40 years for…growth and China today is so different from 40 years ago. China's influence presents the economic arena and also commerce, finance and industry it's so different from 40 years ago and its presence and influence may be much greater than the Chinese people themselves believe. So my message is first, China should look at those realities, how China is looked at by the other countries and China will continue to play an important role by learning from experiences and continuing to benefit from human civilizations, which is a remark made…in the China daily English version. So that is one comment. The other comment is, China is already a very dynamic country with a lot of innovations. It's not just depending on the low wages it is based on the innovations. So to me my challenge is how to make society more equal? How to make the older population enjoy better life from the fruits of this technological development growth and globalization?
So I feel that there is a still gap between poor people and billionaires. There are more billionaires in China than many other countries, but there are still very poor people. So how can we of us, and I think the government already understands this challenge very clearly but by the more broader personal income tax, a tax on capital gains and property, there should be more a kind of progressive tax system and also more revenues to do public service deliveries like education lagging areas, health services lagging areas. I think China can do many things to make a society more equal. And I know that the government leaders know it.
Communications Manager, CNBC Asia Pacific
D: +65 6326 1123
M: +65 9852 8630
CNBC is the leading global broadcaster of live business and financial news and information, reporting directly from the world's major financial markets via three regional TV networks in Asia, EMEA and the US. CNBC.com is the preeminent financial news source on the web featuring video, real-time market analysis and dynamic financial tools. CNBC serves the world's most powerful audience of CEOs, senior executives, the financial services industry and private investors and is available in more than 409 million homes worldwide. CNBC is a division of NBCUniversal.
For more information, please visit www.cnbc.com