While that is a secondary listing, it certainly underlines the unique position of Hong Kong as an international financial centre that connects the fast growing Mainland market to global investors. 4. I know some of you may have doubts that the Chinese economy is actually slowing down in face of trade dispute and deleveraging. That is true if we compare to the days when Mainland GDP was growing at double-digit every year. But let’s remember, a real growth of 6% is still a very respectable pace compared to economies around the world. And with Mainland China’s sheer size, a 6% GDP growth means adding some $ trillion nominal value to the world’s GDP in a single year. This is more than the total size of the Indonesian economy, or close to that of Australia. 5. With such economic expansion and its deepening capital markets, China continues to be a compelling investment theme for global investors. As an investment manager ourselves, we are among the first offshore players in the Mainland’s capital markets. Surely, for the past eight or nine years since we invested in the Mainland, there had been some very challenging times, such as the RMB exchange rate reform, the stock market turmoil and fear of economic hard landing. But looking through these short-term ups and downs, two unmistakable trends are consistently borne out by actual developments. The first is the progressive opening of the markets, and the second is the growing momentum of international investors’ allocation to Chinese assets.
As you may know, the membership has just agreed to an increase of 45 percent, equivalent to about $ billion, in IMF quotas. This will raise the capital base of the institution to some $ billion. In addition, the Fund has taken steps to augment its financial resources through the agreement on the New Arrangements to Borrow. Under these arrangements, participants would be prepared to lend up to the equivalent of some $ billion when additional resources are needed to forestall or cope with an impairment of the international monetary system, or deal with an exceptional situation that poses a threat to the stability of the system. We hope that participants who have not yet done so will complete the necessary legislative action so that these arrangements can enter into force soon. BIS Review 111/1997  -6-  Furthermore, in order to allow all members to participate on an equitable basis in the SDR system, agreement has been reached on a proposal to amend the Fund’s Articles of Agreement to authorize a special one-time allocation of SDRs of about $ billion that would equalize all members’ ratios of SDR allocations to quotas and would double the amount of SDRs allocated to date. These resources will supplement members’ reserves, giving them more flexibility in economic policies and a cushion against adverse developments. Last but not least, recent experience has demonstrated once again that early warnings cannot always prevent crisis from blowing up.