with. regular, frequent contacts with high level officials from the pbc and the chinese ministry of finance at bilateral or multilateral level – including in the occasion of the global economy meetings of central bank governors in basel as well as the active participation in the annual eu - china macroeconomic and financial dialogue co - organised by the european commission – have helped the ecb to become increasingly aware of the many challenges faced by the chinese authorities as they seek to transform their country into a modern, market - based economy. i personally have learned a great deal about china through these exchanges, and profess great admiration for the remarkable achievements made by china in its drive to modernise the economy. having outperformed all expectations in terms of real economic growth performance, the chinese authorities are now rightly focussing their efforts on achieving a more balanced and sustainable pattern of domestic growth, which would also provide one important contribution to the smooth resolution of global imbalances. the chinese authorities have recently spelled out their domestic policy plans also at a multilateral policy level, for instance, in the framework of the recent multilateral consultations convened by the international monetary fund ( imf ) : “ ( … ) boosting domestic demand, particularly consumer demand, and rebalancing investment and consumption ; ( … ) further promoting balanced external sector eu trade data from eurostat based on sitc product classification. development ; ( … ) speeding up financial reform ; and ( … ) further improving the exchange regime ( … ) in a gradual and controllable manner ”. 8 further improving the exchange rate regime is, therefore, first and foremost in china ’ s own best interest, as repeatedly emphasised by chinese authorities on many other occasions. on 21 july 2005 the ecb was indeed amongst the first in the world to welcome through a press release china ’ s decision to increase the flexibility of its currency through the adoption of a new exchange rate regime. more than two years later, i wish to recall the statement i have signed a few weeks ago, on 19 october, in washington dc together with the other g7 finance ministers and central bank governors. we wrote that allowing for “ an accelerated appreciation ” of china ’ s “ effective exchange rate ” is an important element china ’ s economic policy strategy, also in view of the “ rising current account surplus and domestic inflation ” in this country. as part of the ongoing dialogue of the eu with china, at the end of this month i will travel with messrs. juncker and al

its power and means ) to contribute to financial stability, without interfering with the performance of its monetary policy tasks. third, the new body responsible for macro - prudential supervision in the eu should be independent in carrying out its tasks and pursuing its objective of assessing and regulating systemic risk. the fact that the esrb will be responsible for the assessment of systemic risks and the formulation of pertinent policy recommendations, and that it will not be involved in the implementation of these recommendations strengthens the argument for its policy independence. fourth, the effective performance of macro - prudential supervision in the eu will require addressing a number of legal, institutional and governance issues. there are two key requirements for the successful functioning of the esrb : the first is the establishment of a comprehensive and relevant information base as well as effective information - sharing and cooperation between the esrb and the european supervisory authorities. the second is that suitable and sufficient mechanisms are in place in order to ensure the implementation of the macro - prudential recommendations. finally, i should emphasise that the ecb is actively preparing, in collaboration with the national central banks, in order to provide the appropriate analytical statistical and administrative support to the esrb.