benefit. if the productivity of 1. 3 billion people increases, world production increases and we all benefit. consumers experience this every day : international competition has resulted in cheaper goods, and has contributed to the success of central banks in maintaining price stability. 2 but it is not just that prices have fallen, in addition consumers can also choose from more variety : where henry ford once joked that his famous t - model comes in ‘ any color as long as it is black ’, today ’ s consumers can purchase a wide array of goods not available in the past. p. krugman. the myth of asia's miracle. foreign affairs 73 ( 6 ) : 61 - 79, 1994. krugman ’ s main message is confirmed in duo qin, marie anne cagas, pilipinas quising, and xin - hua he. how much does investment drive economic growth in china? queen mary university of london working paper 545, 2005. k. rogoff, 2003, globalization and global disinflation, paper prepared for jackson hole conference, august. 2 / 3 a recent u. s. study found that the welfare gains from consumers having a broader choice of goods are equivalent to 2. 8 percent of gdp. 3 china has a huge cost advantage in producing labour - intensive goods. consequently, europe ’ s economic structure will change : as chinese wages are much lower than european wages, production of labour - intensive goods is shifted to china. europe will specialize in capital - intensive production. one area where massive relocation of business activities is already taking place is the textile sector. we must acknowledge the hardship imposed on those who find themselves out of work. and we must ask ourselves : which policies are needed to ease the adjustment? let me be clear : protectionism is not the answer. this would not only hurt chinese workers, it would also deprive european consumers from the benefits of international trade. instead, competitive, sound firms in europe must have opportunities to grow, while policymakers should limit assistance to firms that will no longer remain competitive. structural change brought about by globalisation is not very different from structural change imposed by technological progress. had we banned cars, we would still be using horses and buggies. viewed from that angle, it is clear that we would become poorer by protecting industries that cannot compete with cheaper foreign products, or by protecting employment in these sectors. europe ’ s advantage lies in the production of capital - intensive goods. and given that the most

joanne kellermann : welcoming speech at the iais conference 2014 welcoming speech by ms joanne kellermann, executive director of the netherlands bank, at the 21st annual conference of the international association of insurance supervisors ( iais ), amsterdam, 23 october 2014. * * * good morning ladies and gentlemen, • i hope you all had an enjoyable evening last night. for those who arrived this morning, welcome to amsterdam and to this year ’ s iais conference. my name is joanne kellermann and i have the honour of representing de nederlandsche bank or dnb and welcoming you as host to our beautiful city. the governor of dnb, mr. knot, regrets that he is unable to be here today to welcome you. however, he ’ ll be able to attend the gala dinner on friday. • amsterdam has played a key role in the cultural, nautical, financial and trading history of the netherlands. in the 17th century, the dutch golden age, ships set sail from amsterdam to trade across the globe. this boosted the economy of what was then known as the republic of the seven united netherlands. amsterdam became the trade and financial hub of the netherlands and – as the dutch like to believe – the trade center of the world. • insurance has a longstanding connection with maritime affairs and it is therefore no coincidence that the setting for the gala dinner tomorrow evening and sponsored by the dutch association of insurers, will take place at the national maritime museum. there you will have a chance to learn more about our country ’ s intense relationship with the seas. • two hundred years ago this year, king william the first founded dnb. at that time dnb was the first truly national credit institution incorporated to boost the ailing dutch economy. today, dnb is a central bank, part of the european system of central banks and member of the single supervisory mechanism, as well as the prudential supervisor of the pension and insurance sector of the netherlands. • the iais, too, is celebrating an anniversary – it was founded 20 years ago. to mark this event, there will be special ceremony during the last session today. i believe the iais has put together an excellent and varied programme that will inform and inspire. the six panels of this conference bring together perspectives on the past, present and future of the insurance industry. allow me to look briefly into that past and glimpse into the future. insurance is a dangerous game ; risk being the industry ’ s business model. ever since the merchants in