rapid growth in crossboundary capital flows in recent years. in particular, hong kong ’ s mutual market access schemes with the mainland, namely the stock connect and the bond connect, have played a crucial role in encouraging greater portfolio investment into china and the inclusion of rmb assets into major global indices. within three years, foreign holdings of onshore equities had more than tripled and foreign holdings of onshore bonds had more than doubled at the end of last year. 9. following a strong 2021, foreign equity and bond inflows into onshore markets softened this year on the back of geopolitical uncertainty, covid lockdowns, and the china - us monetary policy divergence leading to a reversal of onshore bonds ’ yield premium. 10. notwithstanding this, the scale of the decline in foreign purchases and holdings has moderated recently and is relatively small compared to global investors ’ total holdings in onshore equities and bonds. we believe that these short - term fluctuations will not reverse the long - term trend of foreign investment in mainland capital markets. 11. in fact, several key drivers will continue to strengthen interest in diversification into rmb assets over the medium term. these include ( i ) continued inclusion of onshore equities and bonds into major global indices ; ( ii ) china ’ s long - term economic growth prospects ; ( iii ) rmb being a stable currency that is increasingly recognised as a reserve currency ; and ( iv ) lower correlation of rmb assets with other global financial market assets. 12. these factors are paving the way for a structural shift which will motivate global investors to think more strategically about their exposure to china. this, in turn, will spur demand for rmb assets and facilitate the further opening up of the onshore capital markets. 13. in the remaining time, i would like to highlight in more detail a few upcoming developments which will be of interest to international investors seeking access to mainland capital markets. 14. first is mainland authorities ’ efforts to connect the interbank and exchange bond markets, which will allow participants in each market to access securities in the other market through an infrastructure connection without having to open separate accounts. this should ultimately be beneficial to the growth of both the cibm and exchange bond markets, thus creating a bigger pie. 15. foreign investors who access the interbank market through bond connect or cibm direct will be able to trade in the exchange market, which is the platform where most non - financial corporate

: first, a prediction was made with absolute certainty, that “ money ’ s destiny is to become digital ”. it is worth noting that, although 2001 is certainly not that far in the past, at the time facebook did not exist, apple had yet to introduce its first smartphone, google was still an infant company and amazon, despite being seven years old, was far from being the giant tech company it is today. therefore, even though the necessary technology was not yet in place, the prediction was made, based simply on the consideration that the long - term evolution of money had been, for centuries, one of ever - greater abstraction, along a trend of increasing disassociation from a precise physical materialisation, one that digitalisation would make final. second, the costs for consumers of not having a digital money were considered at length. they included not only the traditional ones related to the handling of physical cash, but also others, for example the impossibility of obtaining discounts on cash payments as a consequence of the contracts between merchants and credit card companies, or the absence of those innovations and new start - up firms that would be encouraged by digital money. in particular, the availability of a digital money was seen as an especially effective way of reducing the very high costs of remittances and of counteracting the costs of financial exclusion ( for example for those who do not have a bank account ). the book, 1 / 3 bis central bankers'speeches therefore, very forcefully called on public authorities to introduce digital money as soon as technologically possible. third, the risks of the possible disintermediation of the banking system were not elaborated on, nor was the consequential diminished role of banks in providing credit to the economy, given the possibility for the public to open a deposit at the central bank. the potential loss of effectiveness of monetary policy, which may be due to the diffusion of alternative private digital money, was also not greatly considered, even if it was strongly argued ( by michel aglietta ) that any extreme decentralisation of payments was a no - goer. in fact, it was predicted that : “ whatever form the centralisation of payments may take, the control of money will remain in the hands of central banks ”. the risks of bank disintermediation and the challenges for monetary policy are, however, not only central to today ’ s analysis, but have also been discussed at length in the past. economic historians and