The committee recognizes that, in the current environment where growth prospects differ wildly across regions and monetary policy in advanced economies remains ultra-loose, pressure from capital inflows may persist in the medium term. All available policy options are therefore open to considerations. Substantial preparation work has been ongoing to ensure that the right measures can be readily implemented should the situation warrant. Investors seeking long-term presence in Thailand should be reassured that productive capital inflows are still highly valued, and any introduction of measures will be carefully designed to minimize unintended consequences. After all, the goals of these measures are to preserve the financial and economic integrity, the very reason that attracts investors to Thailand in the first place. Structural Impediments Ladies and gentlemen, Macroeconomic stabilization and demand management policy can only get us so far. The ultimate determinants of long-term growth are tied to the supply side of the economy, namely the deployment of effective capital and labour inputs. It is a pity that the supply-side issues are often overlooked in policy discussion, and action is often limited to structural ‘reform’ that comes too late. By addressing the structural issues early and preemptively, the long-run growth benefits are likely to be more substantial. So let me venture out of my familiar territory, and devote the rest of my talk to discuss one key structural issue facing the Thai economy – the labour shortage. Unemployment is persistently low in Thailand, and is not very sensitive to the business cycles.

In switching to renminbi, corporations should review on the internal changes required, such as invoicing and trade documentation in renminbi, accounting and any other operational procedures, including engaging banks which are able to provide advice and facilitate trade financing in renminbi. Banks need to be ready in this area, to develop the system to support the trade financing and to be familiar and current with the rules and regulations of the Chinese authorities. Further improvement should be looked into to entice more participation, and efficient ways should be explored to ease trade facilitation in renminbi. In another aspect, this space can also capitalise on another work area of the Financial Market Committee in looking at the introduction of a more standardised documentation requirement across industry. Coupled with the broader and more flexible trade financing facilities and hedging tools, this will create a more business-friendly market which will in turn amplify participation. 5. Last but not least, is to develop investment products in renminbi. In the past, the efforts in promoting the use of renminbi has primarily emphasised transactions or trades in goods and services between the two countries. With the transformation and internationalisation of renminbi, we should accelerate our understanding of the renminbi financial markets and to see the renminbi as a viable choice of currency for financial investments. In November 2015, China granted RQFII country quota of RMB50 billion to Malaysia to enable financial institutions here to invest in China’s onshore financial markets. The renminbi financial market in Malaysia remains incomplete with limited investment avenues.