guo shuqing : rejuvenation of china is unstoppable speech by mr guo shuqing, party secretary and deputy governor of the people's bank of china, at the tsinghua pbcsf global finance forum, beijing, 25 may 2019. * * * distinguished guests, professors, students and friends, good morning! it gives me great pleasure to attend the tsinghua pbcsf global finance forum. taking this opportunity, i would like to share with you my observations on some economic and financial issues of common interest. i would also welcome your questions and comments later on. i. the escalation of trade friction by the united states does not help solve any problem. on may 10th, the us government announced the increase of tariffs on $ 200 billion of chinese exports. it then further declared to impose ban on huawei and other chinese companies, and also decided to launch anti - subsidy investigation on the renminbi exchange rate. such actions did not surprise the chinese government, companies and people, as we have believed that a trade war does not help solve any problem, but could only do harm to the others while not benefiting the inflictor, resulted in collateral damage to the whole. from the perspective of china, though in theory the us could raise the tariffs on chinese exports to the maximum, the impacts on china ’ s economy would be very limited. firstly, the vast majority of china ’ s exports to the us are suitable for domestic sale. now china is right in the process of consumption upgrade, which means a rapidly expanding domestic market could absorb a large amount of the products intended for export, without exerting a “ crowding out ” effect on the existing consumer goods. secondly, the export market has been further diversified. with great progress made in the belt and road initiative, chinese products are also welcome in overseas markets other than the us. thirdly, despite the tariff increase, a substantial amount of the chinese products are still expected to export to the us, as on the one hand, there is currently no better substitute for these products, and on the other, the us importers are more than willing to share the increased cost given the ample profits of the import business. fourthly, china is now upgrading its industrial structure, which requires the transfer of certain production activities to overseas, and thus facilitating high - quality growth in china. fifthly, financial market in china withstood the over - impacts caused by the trade tension last year

##able economic matrices. at this juncture, with the global crisis behind us and all the lessons learned, i think as policy makers we are more knowledgeable to reap the benefits of the eu entrance more wisely, and to better deal with the challenges ahead. at this point i must say, that macedonian economy is already well integrated both in terms of trade and finance with the eu. more than 70 % of the total trade is with eu countries, the foreign owned banks are mostly of eu origin, and the bulk of financial flows comes from eu. very importantly, these financial flows went in export – oriented and more productive segments, that fortified the fundaments of the economy, provided impetus to growth and did not add to inflationary pressures, or pressures on foreign reserves. and, this model should actually be the proper way to proceed after the eu entrance, as well. less reliance on short - term volatile financial flows, and import of longer term capital is the only way to enhance the productivity of the economy and improve its competitiveness. very often, the entrance on the large eu common market of goods, services, capital and labor, not only is connected to faster growth and real convergence, but also to convergence in price levels. as wages start to increase, and gradual shift towards consumption of more expensive services occurs, the price level might elevate as well, thus posing challenges for monetary policy. these price pressures can be avoided by boosting the 1 / 2 bis central bankers'speeches productivity, thus creating more favorable environment for the monetary policy, without pressures on the interest rates. the second angle that should be pinpointed is the implication that eu entrance does have on the further monetary integration, the adoption of the euro as a single currency and the role that the national central bank would have in this context. entering the eu, for the nbrm would automatically mean participation in the european system of central banks ( escb ). in this manner, we are getting much closer to europe in the field of central banking. the staff of the central bank becomes part of many committees, subcommittees and working groups of the escb, which is crucial ingredient for strengthening the institutional capacity for policy making. and this is vital for the future steps, as the eu membership, for small and open economy, with high level of euroization and fixed exchange rates would inevitable imply need for very serious preparations for the euro adoption. it requires passing the so - called test period, staying in the er