. renminbi internationalisation as part of china ’ s wider reform process as china has gained in international stature, some people have asked whether it can maintain its economic dynamism. a decline in growth ( from over 10 % in 2010 to slightly below 8 % at the end of 2013 ) coupled with the persistence of domestic imbalances suggests that further reforms are needed. in particular, the composition of domestic demand continues to be highly skewed towards investment ( now standing at 47 % of gdp ). at the same time, growth has become increasingly reliant on credit, with total financing to the private sector growing to about 180 % of gdp at the end of 2013 from 115 % in 2008. financial leverage on this scale is much higher than in other countries with a similar level of development. moreover, much of the credit growth has taken place outside the formal banking system, a development which needs to be monitored closely to minimise risks to financial stability. bis central bankers ’ speeches the chinese authorities are well aware of these challenges and, in november 2013, presented a comprehensive reform programme aimed at making growth more sustainable. an essential element is the progressive development and liberalisation of domestic financial markets so as to give a greater role to market forces in determining interest rates and allocating credit. allowing those forces to play a more important role will increase the liquidity of china ’ s financial markets as well as the variety of instruments traded. over the last few years, we have already seen a rise in the number and variety of financial instruments that are being traded on china ’ s domestic markets, be they bonds, at various maturities and with different ratings, derivative products or different currencies. as for currencies, china ’ s decision to introduce direct trading between the euro and the renminbi in the shanghai foreign exchange market could, beyond its symbolic value of signalling stronger relations, bring benefits for the euro area and china. it could do several things – enhance price discovery for the currency pair, encourage a decline in transaction costs, facilitate the access of european banks to the chinese onshore foreign exchange market, and it could allow the euro area to benefit from the rising importance of the renminbi. however, should trading volumes remain low, some of these advantages, such as lower trading costs, might prove elusive. an expansion of the country ’ s domestic financial markets should allow for a more efficient allocation of capital, which should benefit china ’ s long - term growth prospects. these measures,

policy makers be in a position to take the most appropriate decisions to obtain their policy goals. let me elaborate a bit more on these three themes : the need for an encompassing and integrated set of data, the achievements of, and outlook for, euro area statistics and the ecb ’ s framework for analysing this information. monetary policy and the need for an encompassing and integrated set of data if we lived in the world of macroeconomic textbooks, a few simple models with a limited set of variables would be a sufficient basis for monetary policy - making and the statistical requirements could be kept to a minimum. as we all know, the real world is much more complex and, therefore, information needs are much more elaborated. in such a world, a rich and integrated set of data is needed because macroeconomic models, synthetic indicators and unconnected statistical indicators are often too rough a guide to the current and likely future development of the economy. as mentioned before, central banks have to take decisions under conditions of constant uncertainty. the economy is never at rest. a multitude of disturbances of diverse nature affect the economy all the time : financial shocks, demand shocks, supply shocks etc., and these cannot easily be distinguished in real time, let alone foreseen. in their attempts to identify disturbances and track how they spread through the economy, central banks are assisted by models. but too often, existing models are not sufficiently sophisticated instruments to identify shocks. for one thing, their focus may be too narrow, in a way that makes them unduly selective. a partial representation of the economic structure can only partially help in monetary policy decision - making, notably in real time. for instance, it is very difficult to find empirical models that allow for an integral view of both non - financial ( ‘ real ’ ) and monetary - financial phenomena. so, it may be impossible to arrive at a convincing explanation of the origin and propagation of a significant financial shock, say, on the basis of sets of equations that do not elaborate on the role of the financial sector or account for only tenuous links between that sector and the rest of the economy. another example is provided by the many pitfalls that come with using “ synthetic ” indicators of inflationary pressure. the most famous of these “ synthetic ” indicators is the so - called “ output gap ”. the “ output gap ” can be defined as a measure of the deviation of the aggregate output of an economy from the maximum level that would be consistent with price stability. this