fall in the period ahead. in other words, will bis central bankers ’ speeches tomorrow ’ s bfsp problem be greater or lesser than today ’ s? to answer that, we need to return to the global financial footrace. judging that race involves balancing two powerful forces of financial liberalisation : portfolio diversification among advanced economies ; financial deepening among emerging markets. plotting the future path of these factors is far from straightforward. but some quantitative thought - experiments can help clarify the balance of these forces. to keep these experiments as transparent as possible, consider the simplest possible one - factor model of financial liberalisation. the one factor is the level of economic development of the g20 economies, as proxied by gdp per capita. theoretically, we would expect financial liberalisation to be shaped by economic development. this is consistent with the economic growth literature emphasising the positive, two - way relationship between financial deepening and economic growth ( levine ( 2005 ) ). the cross - section and time - series evidence presented here supports that hypothesis. to generate projections for the single factor – gdp per capita – we use a calibrated crosscountry convergence model, in the spirit of barro and sala - i - martin ( 1992 ) and mankiw, romer and weil ( 1992 ). these gdp per capita projections are then adjusted for expected future changes in population growth to give a set of cross - country projections for gdp from 2010 to 2050. chart 7 shows the global distribution of g20 gdp at decadal intervals over this period. these projections are necessarily tentative, but are broadly in line with external estimates. 3 nominal gdp in the emerging g20 exceeds that in the advanced g20 by 2030. the advanced economies ’ share of g20 gdp halves between 2010 and 2050, from 70 % to 36 %, while the emerging g20 economies ’ share rises from 30 % to 64 %. over the next 40 years, advanced and emerging countries will most likely swap gdp shares. by 2050, china ’ s share of g20 gdp is 22 % and india ’ s 18 %, with the us falling to 20 %. in the thought - experiment, this shift in the balance of global activity has important implications for the balance of global capital flows. ( a ) the evolution of home bias with mixed success, theoretical studies have sought to explain cross - country patterns of home bias ( lewis ( 1999 ) and karolyi and stulz ( 2003 ) ).

our website. we also started in 2006 a china economic issues series dedicated to detailed analysis of economic and financial market issues in the mainland. this conference series is also a good way to organise informed discussions on the mainland's financial sector issues. the first part of the conference examines the experiences of chile, india, korea and thailand in their capital account liberalisation, with the view of drawing useful lessons for mainland china. the second part focuses on the mainland, assessing the effectiveness of current policies in dampening the impact of capital inflows on the domestic economy, their costs, as well as policy options of outward investment. a final paper will gauge the current level of financial integration between the mainland and hong kong, and discuss the policy implications. i am pleased that this conference has brought together a group of experienced researchers and policymakers from a wide range of central banks, international organisations and research institutes. as earlier noted, the recent global financial turmoil will probably turn out to be the most critical time in recent economic history which will shape future economic and policy thinking. i hope this conference can provide a useful platform for fruitful discussions on capital account liberalisation to enhance our understanding on the issue. i wish the conference great success.