the first is the size of the base. china's total gdp has exceeded rmb120 trillion, and the growth of 5 percent is not a low rate against the backdrop of such a large base. the second is to 1 / 6 bis - central bankers'speeches strike a balance between economic growth and its quality and sustainability. a proper economic growth is necessary, but it is more important to achieve high - quality and sustainable development. in brief, transforming the mode of economic growth is more significant than pursuing a high growth rate. second, the pboc has continuously implemented the sound monetary policy to support the stable growth of the real economy. since the beginning of this year, we have strengthened the counter - cyclical adjustments, and used a mix of monetary policy instruments in terms of aggregates, structure, quantity and prices, providing vigorous and effective support for the development of the real economy. in march and september, the required reserve ratio ( rrr ) was lowered twice, injecting medium and long - term ( mlt ) funds exceeding rmb1 trillion. in june and august, the policy rate was cut twice, bringing down the market interest rates such as the loan prime rate ( lpr ) on a continuous basis. in august, we have launched the " policy package " for real estate finance, including lowering the ratio of down payment and the floor on second - home mortgage rates, and improving the standards for identifying whether a property is a " second home ". in addition, we have guided commercial banks to adjust interest rates on existing home loans, helping households save about rmb170 billion every year and benefiting about 50 million households or 150 million people. we have increased the quota for central bank lending to support rural development and micro and small businesses ( msbs ) as well as central bank discounts twice. we have extended the applicable term of six structural monetary policy instruments, including the inclusive msb loan facilities. at present, money and credit aggregates are growing at a proper pace, and the credit structure is continuously improving. the interest rate on corporate loans has maintained at a low level, providing strong and effective support for economic recovery and development. going forward, we will strengthen both inter - temporal and counter - cyclical adjustments for the monetary policies, and strike a balance between short - term and long - term goals, stable growth and risk prevention, as well as internal and external equilibria, thus creating a sound monetary and financial environment for stabili

of relative “ over - competitiveness ”. the netherlands for instance had in 1999 a very strong competitive position due to the success of their longstanding previous strategy of competitive disinflation. a higher level of increases of unit labour cost during several years is explainable in such a situation. • third, some countries might be or might have been catching up in terms of growth. then they may have experienced relatively strong trend increases in per capita gdp. to the extent that these income per capita developments are sustainable, relatively strong wage increases are justifiable by reference to the fundamentals of the economy. these three first developments are economically justified and need not be a concern to policy makers. • however, there is a fourth type of developments which poses problems for the economies concerned. some euro area countries have witnessed a long period of strong growth in domestic demand. these demand pressures were related to expectations of consumers or firms about future income and profit prospects, which, it is now clear, were overly optimistic. 7 this situation was often accompanied or intensified by an insufficiently tight fiscal stance, even if headline fiscal numbers ( such as the deficit and the debt ratio ) still suggested a healthy fiscal situation. technically speaking, governments and the public have mistakenly taken a cyclical or temporary expansion to be an upward shift in potential output and long - term income growth. they thus took insufficient account of the impact of a possible downturn in activity on the public finances and private income. in simpler terms, this means nothing less than extrapolating the good times almost for ever and accordingly increasing spending and indebtedness. see campa and gavilan ( 2006 ) and blanchard ( 2007 ). in our economic models, we often speak about “ forward - looking agents ”, portraying households, firms and governments as making rational economic calculations with a watchful eye on the future. but in reality, we have to be aware of too many “ forward - spending ” agents, private and public alike. such a situation can stoke inflation and bring cumulated losses in competitiveness, lower export performance and a high current account deficit. moreover, it has often resulted not only in pressures on the prices of goods and services, but also in asset price inflation, notably in the housing market. in addition, in some cases sizeable wage increases in the public sector during normal or good times may have provided the wrong signals for wage bargaining in other sectors. the accumulation of relative losses in competitiveness and the build - up of domestic im