in the two places, conductive to satisfying international investors'needs for risk management. the second one is to establish a standing currency swap arrangement between rmb and hkd. the pbc and hong kong monetary authority ( hkma ) enhanced their existing currency swap facility to a standing one. it has become a long - standing 1 / 2 bis - central bankers'speeches arrangement with no need for renewal. its size has also been expanded from rmb500 billion to rmb800 billion, and the operation will be streamlined to facilitate the usage of funds. this is also the first time for the pbc to sign a standing currency swap agreement. the above two policies have already been posted on the websites of the pbc, hkma, and hong kong securities and futures commission ( sfc ). the launch and implementation of swap connect and the standing swap arrangement will further enhance the connection of financial markets between the two places and consolidate hong kong's status as an international financial center and an offshore rmb business hub. this fully demonstrates the commitment of the central government to consolidate and enhance hong kong's status as an international financial center, and its confidence in and resolution to support the long - term prosperity, stability and development of hong kong. the experience of china's financial market development indicates that further openingup is a powerful driving force in contributing to the market - oriented, law - based and international development of china's financial markets. it is also a key move to enhancing the capacities of china's financial markets to serve the real economy. as an international financial center, hong kong boasts many favorable conditions and unique edges : it serves as a key gateway and bridge for the opening - up of the mainland financial markets ; also it provides a testing ground for the pilot programs of china's opening - up strategies. it is the guiding principle set by the cpc central committee to continue to unswervingly expand the high - level opening - up of china's financial markets and support the prosperity and development of hong kong. this is also an important task of the pbc. going forward, the pbc will earnestly implement the guiding principles of president xi jinping's speech delivered at the meeting celebrating the 25th anniversary of hong kong's return to the motherland and the inaugural ceremony of the sixth - term government of the hong kong sar. the pbc will, in accordance with the decisions and arrangements of the cpc central committee, continue to deepen the practical cooperation with

peak coincided with the s & l problem, which had a far less severe effect on the economy. adding the real total loans to the chart, we find a quite similar pattern to the japanese case. the level of the real total loans in the first peak was high, but far lower than in the second peak. the last chart shows the figures for china ( chart 3 ). china has not yet peaked with respect to working - age population ratio, but it is close. the property price index was taken from the web site of a shanghai index provider, who unfortunately and unexpectedly shut down their site and vanished about a year ago ( june 2011 ). i tentatively use this index since it has a longer span than other indexes, although i am not entirely sure how it was constructed. the chart shows a clear upsurge in property prices up to 2010. again the real total loan also shows a tremendous increase along with the working - age population ratio and the property price index. what lessons can we learn from this rather cursory examination of the recent history of two advanced economies and the present situation of one emerging economy? it is clear that not every bubble - bust episode leads to a financial crisis. however, if a demographic change, a property price bubble, and a steep increase in loans coincide, then a financial crisis seems more likely. and china is now entering the “ danger zone. ” although demographic factors are not the subject of the studies in this conference, there is a growing body of cross - national evidence that compositional change in population has a significant effect on property prices ( especially the land component ). 3 this comes as no surprise since, in the population dividend phase, young baby boomers want to buy more land and save more real money for their retirement. since the supply of land is physically limited, the real price of land will go up. similarly, if nominal money supply is held constant, the “ price ” of real money holdings, which is the inverse of the price level, should also go up, implying deflation. being mandated to maintain price stability, the central bank is then likely to increase nominal money to keep prices stable. the result is an increase in property prices while general price levels remain stable. 4 however, this raises the problem of quantitative significance. though this hypothesis can explain “ correlation ” qualitatively, it is not sufficient to explain these malign property price bubbles quantitatively. the magnitude of these bubbles is simply mind - boggling.