. india has carved a niche for itself as the world's back office and a global software centre. india is also working hard to change its investment outlook. in 2004, foreign direct investment ( fdi ) into india was us $ 5. 5 billion, less than 10 percent of china's us $ 61 billion. under prime minister manmohan singh, fiscal consolidation has shown progress. customs duties have been slashed. another significant initiative is the development of special economic zones, where superior infrastructure, flexible investment laws and special incentives are designed to draw in foreign investments. 24. there is strong competition among indian states and cities for investments and to outperform each other. recently, the chief minister of west bengal called on me. west bengal has been ruled by the indian communists for almost 30 years. the chief minister wanted to promote foreign investments into west bengal. his aim was to capture 25 percent of india's it outsourcing market by 2010. he said that the indian communists had drawn lessons from the collapse of the former soviet union and china's economic reforms. the choice was stark and simple : either perform or perish. 25. the recent bomb attacks in new delhi have not affected india's growth trajectory. the indian government has responded swiftly and with determination. i have full confidence that it will be on top of the security situation. as india grows, the international monetary fund ( imf ) expects that by 2010, india's exports will more than double, while imports will nearly triple. the consumer market could then be worth us $ 400 billion, making it one of the top five globally. to sustain an annual growth rate of 8 percent would require a huge injection of investments, both foreign and domestic, over the next decade. it is this immense demand for infrastructure, education, healthcare and consumer goods that will continue to draw foreign investors and businesses to india. a reinvigorated asean 26. let me now move on to asean. 27. prospects for southeast asia have brightened considerably. regional economies have remained stable, despite the recent bali bombings. 28. with china and india becoming big players in the international market, southeast asia has no choice but to respond strategically. asean is becoming increasingly integrated so that its market will be at least half as big as china's and india's. asean made a fundamental strategic choice to form the asean economic community ( aec ) by 2020. it is also formulating an asean charter, a visionary document that will chart its

a sizeable allocation of credit to highly - leveraged corporates. 5 / 11 bis central bankers'speeches i n china, the total leverage in the system is about 300 % of gdp, with high levels of indebtedness among local governments, state - owned enterprises, and households. in asia, there has been a surge in the issuance of foreign currency bonds, denominated mainly in us dollars and concentrated in the real estate sector. high leverage in itself does not suggest an impending financial crisis but, if coupled with a sudden shift in investor sentiment, can lead to financial instability. the potential triggers for such a sudden shift in investor sentiment are not hard to find – escalation of trade tensions, disorderly brexit, sharp slowdown in china, or unexpected tightening of financial conditions. in asia, the key risk is an abrupt reversal of portfolio flows and consequent stresses on indebted corporates with large foreign currency liabilities. singapore ’ s financial system, corporate and household fundamentals remain sound. mas ’ most recent stress tests indicate that our financial system is resilient to an adverse scenario of a severe global downturn as a fallout from rising trade tensions. that said, continued vigilance is warranted. some households and corporates could face pressures on their cash flows and hence debt servicing ability if the economy slows more than expected. property market and macroprudential policy last july, the government took macroprudential measures to cool a property market that was showing early signs of potential over - heating. in less than one year, between q3 2017 and q2 2018, private residential prices had surged by 9 %, offsetting most of the gradual decline of 12 % over the preceding four years since q3 2013. there was a real possibility that property price increases would once again run ahead of economic fundamentals – as they did in the lead - up to 2013. if a renewed property bubble were to form, it would risk a destabilising correction later that would hurt households, businesses, and the banks. this risk was especially pertinent, given the strong pipeline of private housing supply coming on stream over the next few years. this is why, mnd, mof and mas decided to act early and decisively to restrain the property market. we have learnt from experience that preventing a bubble from forming is less painful than deflating one that has fully formed. the measures implemented last year have helped to moderate the property