##ity that has taken place as the chinese authorities have sold foreign exchange reserves in response to private capital outflow from china. the depreciation of the renminbi against the us dollar can also be expected to provide some support, at the margin, to the chinese economy. so, overall, it is a complicated picture at present in australia ’ s largest single trading partner. we became used to extraordinarily strong growth in china and now we are having to get used to something a little less extraordinary, and we are also being reminded that china too has a business cycle. nevertheless, it remains the case that there are still significant mutually beneficial opportunities from deeper economic relations between australia and china. as a nation, we need to keep an eye on these opportunities, while, at the same time, understanding and managing the associated risks as best we can. elsewhere, the recent economic data have mostly had a slightly more positive tone. the us economy is recording above - average growth and the unemployment rate is around most estimates of full employment. in europe, the economic news has recently tended to be a bit better than it had been earlier in the year and a recovery, of sorts, is taking place there. in india, too, the growth momentum looks to have improved, although in a number of countries in east asia, both domestic demand and export growth have slowed. for the globe as a whole, economic conditions continue to be supported by the decline in oil prices. in addition, the drag from fiscal consolidation has lessened in several countries. monetary conditions also remain very accommodative. at some point before too long, we should hope that the us economy is sufficiently strong for the federal reserve to begin the process of normalising interest rates there. a stronger us economy should be good for the rest of the world, although financial market developments will need to be watched carefully given that the policy interest rate in the united states has been at zero for almost seven years now. putting all this together, when the rba published its latest forecasts a bit over a month ago, we were expecting gdp growth in our trading partners to be around average over the next couple of years ( graph 5 ). while recent news on global industrial production has been softer, on balance, the recent data have not changed this general outlook materially. we still expect gdp growth in our trading partners to average around 4 per cent over 2015 and 2016, although given recent developments in east asia the risks around this central forecast are

review focused on three questions, which i could sum up as gaps, governance and hubs. on gaps, the question is, are there potential innovations that would be in the public interest that are not happening because of coordination failures? responses to the consultation suggested that there might be. the main points highlighted as possible areas for improvement were : faster or real - time payments at the retail level greater availability of payments systems outside normal banking hours improved capacity to send information with payments and, greater ease of addressing payments the last one of these can be illustrated by analogy with the cheque. a cheque payment can be addressed very easily when all you know is the name of the recipient. but we don ’ t yet have a comparably easy mechanism for addressing electronic payments. obviously it is not costless to deliver these things, and so a coordinated decision process would need to have some way of taking into account both the costs and benefits, including benefits to end - users, in order to determine whether an investment is worth making. that raises the further question of who should provide that leadership and under what arrangements – the general question of governance. to make it more concrete, we can pose the following questions. in the australian case, should the payments system board take a more prescriptive approach to setting objectives for payments system innovation? could it, for example, set an objective of real - time consumer payments, or the adoption of new messaging standards, by a specified target date? could it then perhaps delegate the implementation of those targets to an industry body with the necessary technical expertise? all of that would amount to a governance model where the regulator makes high - level decisions as to the public interest, while industry participants determine the most efficient means of implementing them. i won ’ t foreshadow what we might conclude on these things, but these are the sorts of questions the payments system board is now considering. bis central bankers ’ speeches the board is also considering a third area, namely hubs, or specifically the question of whether there needs to be greater use of centralised architecture for clearing and settlement of retail payments. this is a particular issue in australia, because many of our payments systems are built on bilateral links between institutions. arguments can be made in favour of hubs on the basis that they may be more efficient than bilateral networks and more conducive to both competition and innovation. but these considerations need to be balanced against the costs of the investment. again, this is a key question of system