tap their potentials. reporter : some people describe you as a scholar - styled leader. your have academic background in many areas including finance, economics, audit and laws. it is said that you are also interested in writing tv plays in your spare time. how will such academic background and the experiences in auditing benefit your work in the shanghai head office? and what implications will the establishment of the shanghai head office, a new play that has just started, have on china ’ s entire financial industry? xiang : i must admit that i am still a new hand in the financial sector. although the knowledge i learned in the university on finance and western economics is relevant to the work i currently do, i still need to make efforts to recharge myself with new knowledge and to adapt to the new environment. i will try my best to shorten this break - in period. of course, diversified academic background enables me to look upon issues from different perspectives. and in the formulation of macroeconomic policies, i will benefit from my front - line working experiences. i will seek to make great contributions to the work of the pbc shanghai head office. as writing a tv play, managing the financial system is also an art. with the establishment and further development of the pbc shanghai head office, we will be able to fully take the advantage of the first - hand contacts with the financial markets and to more effectively make use of financial resources. establishing and strengthening the shanghai head office is a new task for us. as china ’ s socialist market economic system further improves, we need to make breakthroughs in the financial sector, and bring the performance of china ’ s financial industry up to high international standards. to achieve these goals, i and all staff in the pbc shanghai head office will make our best efforts to contribute to the work of shanghai head office and to the development of china ’ s financial industry. 4 / 4

the interests of social justice and helps to protect the weakest members of our society, such as pensioners and the unemployed, who depend on fixed incomes and who cannot protect themselves against the costs of inflation with other assets, such as property or shares. broad agreement exists that there is no long - term trade - off between price stability and economic growth. attempting to use monetary policy to raise real economic activity above its sustainable level will, in the long run, simply lead to ever higher inflation, not to faster economic growth. such an attempt will simply forfeit the benefits of stable prices which i have just outlined and would therefore prejudice growth and employment prospects over the medium term. while the contribution it makes through maintaining price stability must not be overlooked, monetary policy clearly cannot solve the serious structural unemployment problem in the euro area. other policy areas have the instruments needed and are thus responsible for solving the structural problems. decisive action in this field is certainly required to improve growth and employment prospects. safeguarding sound government finances is a means of strengthening the conditions for price stability and achieving strong sustainable growth which is conducive to employment creation. in this context, the stability and growth pact sets the right incentives for the conduct of sound and disciplined fiscal policies across all participating member states. in addition, structural reforms in labour and goods markets, as well as a moderate development of wage costs, can best address the root causes of currently high unemployment in europe. the clear division of policy responsibilities i have just described enhances the credibility of monetary and economic policies in europe, increases transparency and facilitates accountability. it provides the proper incentives for the policymakers in individual policy areas. if all parties concerned respect the fundamental allocation of these responsibilities and act accordingly, the achievement of the objectives of all policy areas will be the natural outcome of their individual policy choices. in this regard the eurosystem supports the idea of a dialogue between monetary policy and other policy areas in the form of an open exchange of information. however, such a dialogue should be clearly distinguished from any attempts to coordinate policies ex ante, so as to achieve a certain “ policy mix ”, which would blur the fundamental responsibilities i described. such coordination would tend to decrease accountability, reduce the transparency of the policy framework for the public and increase uncertainty about policy actions, potentially threatening to destabilise the economy. finally, the debate on a “ balanced and appropriate policy mix ” should not be used to deflect attention from the structural reforms that are urgently needed to address