Ravi Menon: China-Singapore financial connectivity Speech by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the 2nd RMB Internationalisation Summit, Singapore, 7 June 2016. *  *  *  Mr Jiang Jianqing, former Chairman of Industrial and Commercial Bank of China His Excellency Mr Chen Xiaodong, Ambassador of the People’s Republic of China to Singapore Distinguished guests, ladies and gentlemen, good morning. I am happy to join you and would like to thank ICBC for the invitation. China’s economic transformation China’s economy is at a major inflection point, balancing three objectives. •  First, to manage a moderation in its economic growth without undue disruption. •  Second, to resolve vulnerabilities in its economy and financial system without triggering a crisis of confidence. •  Third, to implement perhaps the most comprehensive and ambitious structural reform programme of any country in modern times. In the short term, these three objectives may at times be in conflict, presenting a trilemma of difficult trade-offs for policymakers. But if successfully executed, they are mutually reinforcing and will lay the foundation for a more sustainable and vibrant economy. China’s economic restructuring has deep implications for Asia. A new configuration - a new regional value-chain - is taking shape across the region, driven by three features of China’s economic transformation. First, China is shifting from a labour-intensive industrial structure to a more skill and technology-intensive one. •  China is inshoring more high value-added production within China.
•  There is a growing cluster of Chinese asset managers that are keen to set up in Singapore, attracted by our pan-Asian focus and broad base of international investors. •  They cover a broad spectrum of investments, ranging from traditional asset managers to hedge funds to private equity funds. Conclusion Let me conclude. The biggest story for Asia in the last three decades has been the rise of China. Asia’s biggest story in the next three decades will be the transformation of China. It will not be an easy transition, as China deals with the challenges of debt, deflation, and demographics. There will be dislocations and bouts of volatility along the way, with spillovers into Asia. But if China successfully addresses its vulnerabilities and restructures its economy, it will pave the way for more sustained growth and a more advanced economy. The new China that will emerge will open up new opportunities for Asian economies. The RMB will become more international and Chinese corporates and financial institutions more global. Singapore is well-positioned to partner Chinese companies in their regional journey and deepen China’s connectivity to Asia through trade and investment. The next chapter of ChinaSingapore financial partnership will be exciting and rewarding. I wish you fruitful discussions and a pleasant stay in Singapore. Thank you. BIS central bankers’ speeches  5