8  BIS central bankers’ speeches  we cannot give any single measure prime position as representing the one and only truth. It is wisest to continue using several different measurements as a guide. In the second place, situations sometimes arise where there is a conflict between stabilising inflation and normalising resource utilisation and different decision-makers may make different assessments. However, this has not been a problem recently as both underlying inflationary pressures and resource utilisation have been low. In the third place, in my opinion economic trends beyond forecast horizons should be taken into account, though it is not possible to make thorough forecasts covering long periods. Let me briefly explain my argument. As I mentioned earlier, the assessments in the latest Monetary Policy Update can be said to paint a long-term picture in which resource utilisation is coming under pressure and there is a risk of high inflation, in other words the reverse of the current macro picture. However, up to a point I was willing to accept these long-term tendencies, since I must take into consideration the need to use expansive monetary policy to offset the low inflation and relatively weak resource utilisation expected for the time being. In the current situation monetary policy considerations mean supporting continued recovery while preventing longterm overheating tendencies from becoming too strong.
On this front, we are happy to see that RMB lending business is developing progressively, with outstanding RMB loans reaching 60 billion yuan at end-July 2012, nearly four times the level of a year ago. So, is the wider use of RMB a continuing trend? Well, I would say the scope for further development is clear, and it will be very much up to how corporates and banks can get more engaged in the new business of RMB. Third question: does the development of offshore RMB business in other financial centres pose a threat to Hong Kong? This question, I have to say, suffers from the fallacy of “zero-sum” thinking. As more corporates and investors worldwide are becoming interested in conducting their business transactions and investments in RMB, it is natural to see financial institutions in different parts of the world providing RMB services to meet the demand of their customers. This does not necessarily mean that RMB businesses are being diverted to other places. BIS central bankers’ speeches  3  Indeed, such developments will mean that banks in Hong Kong will not be dealing only with each other locally, and there will be new business opportunities to conduct RMB businesses with counterparts overseas. For instance, as a global hub for RMB liquidity and financing, Hong Kong is well placed to channel customer and wholesale RMB deposits towards corporations and financial institutions in other parts of the world. In fact, we are already seeing such a trend.