on global production through trade diversion and production relocation. but even before all these trade tensions started, value chains around the world had begun to change in even more significant ways, thanks in part to the advancement in technology. to this point, i ’ d like to highlight a few observations by mckinsey global institute report earlier this year. first, services are becoming a larger part of the global value chain. cross border services are growing more than 60 percent faster than trade in goods. the valueadded share of services is increasing as firms around the world today are spending more on brands and intellectual property. manufacturing firms in many areas start providing leasing services, which add value to downstream processes and blur borders between products and services. in addition, as people ’ s standards of living increase, they shift their consumption towards services, which could range from tourism, medical services, financial services, and educational services. unlike trade in goods, trade in services are not the focus of the ongoing trade tension, which makes service - related value chains less vulnerable. the second observation is that global value chains are becoming more knowledge - intensive and are relying more on high - skill labor. this is partly attributed to the first observation, as service - related tasks generally require higher skills than manufacturing tasks. the introduction of technologies such as automation and the rising wages in developing countries diminish the importance of labor - cost differences. contrary to the common perception that the global value chains are driven by cheap labor in developing countries, today less than 20 percent of global trade is driven by labor - cost arbitrage. the last observation is that goods - producing value chains are becoming more regionally concentrated. robotization and automation made cheap labor less relevant when companies decide where to place production. this pattern is obvious in certain sectors with closely integrated supply chain for just - in - time production such as automotive, electronics, and electrical appliances. locating production line close to the end - market also helps businesses better customize the products based on each market ’ s preference. trade protectionism is undeniably one other key factor that help accelerate value chain regionalization. all these changes in value chains could be a threat to today ’ s businesses. consumers are ready to switch to a competitor ’ s product if they find it suits their changing preferences better and quicker. a standalone service business might be disrupted by new service value chains that offers a more complete solution to the customer ’ s need. rising wages in thailand will draw production to emerging market countries with lower wages

the people at large remain our priorities. for this reason, we need to redouble our efforts to enhance our banking, finance and technological know - how. we also need to make sure that a wealth of knowledge and experiences is effectively shared among members of the clmvt. bis central bankers ’ speeches the last one is to leverage on specialized financial services that some of our members are ready to offer. for thailand, progress has been made to create financial ecosystem to meet growing regional demand for specialized financial services. in the capital market, thailand allows entities from clmv countries to raise funds from the thai capital market with the introduction of more accommodative rules on capital account and taxation. since 2013, the lao government and firms from lao pdr have issued baht - denominated bonds, worth 28 billion baht in total, to support large - scale infrastructure projects. in addition, the bank of thailand supports multinational corporations operating in the region to establish regional treasury centers in thailand. as of now, there are 13 companies holding treasury center licenses, of which 4 have been granted in the past 3 months. ladies and gentlemen, the work to develop domestic financial sectors and strengthen financial connectivity will always be a work in progress. the bank of thailand is committed to working with our counterparts in clmv countries to develop the financial industry and enhance regional financial integration. much progress has been accomplished, but there remain many more things that we can and should do to further promote more connected financial system. as we have done in the past decade, the bank of thailand will stand ready to work with our clmv partners in various ways from development of human capital and regulatory frameworks to infrastructure building. if we can build strong domestic financial systems and regional financial connectivity, we will be able to reduce costs and create positive spillovers to several other industries. livelihoods of our people will improve. workers and investors can more easily and cheaply remit funds across countries. merchants will find it easier to trade cross - border. the tourism sector will gain even more momentum. smes will be able to utilize e - commerce and e - payment in selling their products regionally and globally. financing of infrastructure projects can also be supported by long - term financial products with proper risk management features. furthermore, financial inclusion and financial literacy will equip households and small businesses with the needed resilience to go through the increasingly volatile world. ladies and gentlemen, just ten years ago, the low - cost