such as m2 and social financing. they have been replaced by qualitative descriptions such as " being basically aligned with nominal economic growth ". the monetary and credit growth as needed by the real economy is also changing with high - quality economic development and structural transformation. the changes in the growth rates of monetary and credit aggregates essentially reflect the structural changes in china's economy and the associated supply - side structural changes in china's financial sector. when we look at aggregates from a mathematical perspective, the growth rate is the ratio of the current increase to the total existing amount, with the former being the numerator and the latter the denominator. currently, as the outstanding amount of social financing in china has exceeded rmb390 trillion and m2 stands at over rmb300 trillion, china's macro financial aggregates are huge. however, we should be aware that many of the existing loans are being used with low efficiency, mobilizing such loans is essentially as significant to economic growth as issuing new loans. in terms of the changes in the credit structure, of the outstanding loans totaling almost rmb250 trillion, real estate loans and local financing vehicle loans account for a large share, which is declining rather than expanding. only after having offset the decline, can the increase in other loans be reflected. as a result, it is quite difficult to maintain an overall credit growth of over 10 percent as seen in the past. the measurement of money supply should also be improved constantly to adapt to the changing situation. china's statistical coverage for m1 was set 30 years ago. with the facilitation of financial services and the rapid development of financial markets and financial innovations such as mobile payment, major changes have taken place to the range of financial products that meet the statistical definition of money supply, particularly that of m1, entailing dynamic improvements to the statistical coverage of 4 / 7 bis - central bankers'speeches money supply. judging by the functions of money, we should work on incorporating in m1 statistics personal demand deposits and some highly liquid financial products, which can be even used to make direct payments, so as to better present a true picture of money supply. we can also continue to refine intermediate variables for monetary policy, and gradually weaken our focus on quantitative targets. when the growth of money and credit has pivoted from supply constraints to demand constraints, it obviously runs against the law of economic performance if the emphasis remains on quantitative growth, or even " the obsession

the hong kong monetary authority, of the apec compendium of sound practices to facilitate the development of domestic bond markets. this comprised a comprehensive list of recommendations covering topics such as government involvement in the market, level playing fields, consistent tax policies, sound regulation, clarity of responsibilities, transparency, robustness and efficiency of market systems, and so on. crucial though these considerations may be for the foundation of sound markets, they are, by and large, just the basic tenets. even when they have all been observed or put into practice, there is no certainty that active debt markets will emerge. in other words, whilst these may be a set of more or less necessary conditions for market development, they are unlikely to prove sufficient. however good the infrastructure may be, it is the issuers, investors and financial intermediaries which eventually determine whether there is a active market or not. here in hong kong the debt market has grown significantly in the recent past, and the increase in issues by non - financial corporates has been encouraging. but we cannot escape the fact that we are still a relatively small market and that, despite the increases in primary issuance, secondary activity remains subdued. “ so ”, people ask me, “ what is the hong kong monetary authority going to do about it? ” in fact i am not particularly comfortable with the implied presumption that we should be the first port of call when any problems or deficiencies are identified. thus, while i should like to take this opportunity to explain what we are in fact doing or intending to do, i want also to indicate what, in my view, we cannot or should not do. we are involved in the working group established by the securities and futures commission to review hong kong ’ s laws and regulations relating to offers of securities. over the years, several of the procedures have become outdated or have failed adequately to accommodate market innovations. in some instances they are an obstacle to bond market development. there are some complex legal and administrative issues here, which will take time to address. the next step in the process is likely to be the issuance by the sfc of a consultative paper. another area which we are looking at is taxation. we acknowledge that there are serious anomalies in the current arrangements for taxing interest income in hong kong but, given the uniqueness of hong kong ’ s overall tax structure, and the conflicting aims of retaining international competitiveness on the one hand and preserving fiscal revenue on the other,