eddie yue : keynote speech - treasury markets summit 2024 keynote speech by mr eddie yue, chief executive of the hong kong monetary authority, at the treasury markets summit 2024, hong kong, 27 september 2024. * * * distinguished guests, members and friends of the tma, ladies and gentlemen : good afternoon. it gives me great pleasure to see so many old and new friends at this year's treasury markets summit. let me first extend my heartfelt thanks to the distinguished group of experts, who shared their invaluable insights and perspectives on china's economic outlook, defi and cbdc. these topics are timely as well as forward - looking. the discussions provided much food for thought as we navigate the dynamic landscape of global finance. as we get back to work after the summer break, let's not forget the exciting moments when we cheered the remarkable achievements of our athletes in the paris olympic and paralympic games. this small city always dreams big, works hard, and delivers well, or what we call the " can - do spirit ". rmb internationalisation the same can be said of our journey in growing hong kong's offshore rmb business. that journey started in 2004, exactly twenty years ago, when hong kong became the first city outside of the mainland that allowed individual residents to open an rmb bank account. in the following ten years, multiple milestones were achieved, including the launch of the rmb rtgs ( real - time gross settlement ), the first dim sum bond, the first bond issued by the ministry of finance of china ( cmof ), trade settlement, the first participants in the china interbank bond market ( cibm ) and the renminbi qualified foreign institutional investor ( rqfii ). the eventful decade ended with the launch of liquidity facilities backed by the hkma in 2012 and the introduction of the cnh hibor fixing by the tma in 2013. in the second decade, we continued to achieve major breakthroughs in our cnh infrastructure. the year 2014 marked the birth of the ground - breaking stock connect. in the following years, from equities to bonds to funds to wealth management to risk management, the suite of connect schemes kept expanding the scope and enhancing their features. they seamlessly link up mainland and international financial markets, through the critical node here in hong kong. two decades on, our offshore rmb business ecosystem has expanded by leaps and bounds. market participants are now more active and

being more the result of monetary policy mistakes, such as those associated with the great depression, than of supply - side forces such as were so plainly evident half a century earlier. inflation did not really become re - established on a significant scale until the second world war, after which it persisted for most of the remainder of the twentieth century. most recently, the potential problems posed by deflation, particularly in a financially developed world where debt and balance sheets interact, have become apparent, most notably perhaps in japan. all in all, there is perhaps a mixed message from these historical examples. it may be possible to live comfortably with a modest pace of deflation, especially if it reflects benign supply - side influences. nevertheless, monetary policy might usefully be engaged to avert it. c. globalisation and the pervasiveness of the law of one price returning to the factors behind current price trends, there is one aspect of globalisation which may be especially relevant. this is the rapid expansion of the range of globally traded output ( in contrast to efficiency gains within some pre - defined range ), with resultant implications for prices. in the past it was common to observe more rapid domestic inflation in economies enjoying faster productivity growth, as wages rose and the prices of non - tradables accelerated, dragging up the consumer price index. this mechanism, based on an assumed clear analytic distinction between price behaviour of tradables and non - tradables, may still be at work, but surely it is not as powerful as it used to be. the range of tradables is expanding relative to that of non - tradables. while it has long been acknowledged that progressively more goods are becoming tradable because of, for example, advances in freight transportation, the revolution in respect of services may now be more significant. thus, many services which were in the past produced only in the country where they were consumed can nowadays be outsourced offshore or accessed from somewhere else in the world at the click of a mouse - back - office processing, multi - functional call - centre services, legal advice, logistics management, design services for everything from clothes to buildings, and even certain forms of medical consultation or education, to name but a few. moreover, buyers of services increasingly elect to travel elsewhere to consume them. thus the international price elasticity of a wedding ceremony, a game of golf, hospital or health spa treatment, or conference facilities is ever rising. soon there will remain only very few location -