The latest estimates predict a significant increase in public expenditure on pensions, health-care and long-term care stemming from the substantial rise in the dependency ratio. Even on the most optimistic demographic projections, this ratio is set to rise from 25% today to 50% by mid-century. In the case of the pension system, the 2011 and 2013 reforms included a number of adjustments that made it possible to significantly counteract the effect of the expected longterm increase in the dependency ratio. Nevertheless, the latest legislative developments have eased the implementation of these mechanisms with the postponement in application 11/14  of the sustainability factor until 2023 and, above all, the return to a system of annual pension increases in line with the consumer price index. According to the Banco de España's calculations, reintroducing this indexing system on a permanent basis would lead to an additional spending increment of more than 3 pp of GDP in 2050. Consequently, guaranteeing the financial sustainability of the public pension system will require additional measures on the revenue or expenditure sides of the system to offset this additional burden. Pending structural reforms In the context just described, characterised by the need to pass the baton to demand-side policies to underpin the current expansionary phase and boost growth potential, it would be particularly desirable to give more prominence to measures to correct the Spanish economy’s structural vulnerabilities and strengthen its capacity to adapt to future shocks.
There is friction in clearing customs, handling trade documents, checking for fraud in trade finance, and ensuring the safety and timely delivery of goods. This is because the approach to trade and trade finance is still manual and paper-based. We need to have end-to-end digitalisation of trade processes. Chongqing and Singapore can work together to apply FinTech solutions to make the STC hassle free, safe, and cost efficient for all stakeholders. Chongqing’s interest to develop a Fintech experimental and demonstration zone in the Western Region is thus timely. The Fintech zone can serve as a source of technology solutions for the successful development of the STC. Several players have embarked on initiatives in this area. For example, VCargo Cloud from Singapore has worked on digitalising the STC’s work flows onto cloud services, synchronising and sharing the information provided by different parties from trade, logistics, and supply chain. I am glad to share that there will be a signing of a four-party Memorandum of Understanding (MoU) later today at the Summit that will catalyse FinTech cooperation between Chongqing and Singapore. The MoU will cover enterprise and talent exchange, the establishment of an incubator platform and a regular communication mechanism. Under a separate MoU, OCBC Bank, Xiaomi Inc, and Hanhua Financial Holding Co will explore Fintech collaboration in the areas of retail and institutional financial services in China. This collaboration will enable more than 300 million Xiaomi retail customers and business partners to have access to innovative financial services.