##ifies their high pay. the fact that hong kong appears to be, overall, a rather expensive place, relative to the majority of neighbouring economies, is a consequence and symptom of its success. as anyone can see by just looking around, this doesn't mean that we can no longer win any business. but we can only afford to pay ourselves what we are worth. if costs go too high and hong kong suffers an absolute loss of competitiveness ( as opposed to there merely being shifts in relativities between sectors ), then an adjustment process kicks in to restore competitiveness. since we have a fixed exchange rate, this adjustment occurs through downward pressure on domestic costs and prices. we have seen this process very clearly and effectively at work over the past three years or so ; for instance, the loss of competitiveness inflicted on hong kong by the currency depreciations elsewhere in the region in 1997 was made good largely through internal deflation within the space of about 18 months. at risk of my labouring the point, look at cities such as london, paris, zurich, tokyo and new york. in absolute terms they are expensive places, but they all generally thrive. the citizens don't hang their heads in shame at being in a high cost and high earning environment. indeed, many relish it. but none of the businesses there can afford not to search continuously for greater control of costs, for higher productivity, for new products and markets, and so on. competitive pressure may be intensified by globalisation and by the emergence of significant competition even from third world cities, where basic costs are hugely lower, but the very survival of the wealthy cities has not been seen to be seriously threatened on that score. over a period of time there may be marked shifts in relative income levels between different locations – hopefully as the living conditions of the poor advance more rapidly than those of the rich, although sadly there has been less evidence of that than one might have wished for – but there is no reason to expect the great cities of the world to sink out of sight. and if you add hong kong to that list, you will see the point i am trying to make. i'm not sure whether anyone a quarter of a century ago accurately predicted how important a contribution the financial and business services sectors would now be making to the hong kong economy. looking ahead, i am definitely reluctant myself to make any prediction about the mix of activity twenty - five years from now. ask anyone involved in

##pate a dynamic job market, diverse career paths, and the opportunity to work on groundbreaking projects that will shape the future of finance. i've highlighted the opportunities arising from the growing demand for fintech talent, and the market potential stemming from the gba area. the next question is, how can our younger generation, including the students here today, seize these opportunities? the fintech ecosystem has undergone remarkable growth and development in the last few years. as the financial services industry embarks on the next phase of digital transformation and innovation, there is a pressing need to unlock the full potential of fintech. 2 / 3 bis - central bankers'speeches at this critical juncture in our fintech journey, the younger generation will be a vital source of fresh ideas, driving further breakthroughs and advancing more innovation. here, i would like to offer three pieces of advice for you. first, you need to stay curious, keep learning and remain adaptable. things are changing fast, and you need to ensure that you stay up - to - date with the latest trends and developments. secondly, you need an entrepreneurial mind - set to think creatively about applications and explore innovative business models that can bring benefits to the real economy. it is essential to remember that innovation is not an end in itself, but it is really about using technology to make our life better, to make financial services either faster, more efficient, or more accessible. my third advice is that you need to stay open - minded about new, or even radical ideas, and to stay global on fintech trends, so that you can find inspiration to turn them into new ideas for local applications. in closing, i would like to extend my best wishes for the success of this summit, and my appreciation for the dedication of every partner and participant in this initiative. let's continue to grow our fintech talent together for a sustainable ecosystem. thank you. 3 / 3 bis - central bankers'speeches