Chairman Fukuda’s Congratulations on the BFA Financial Cooperation Conference
Origin:Boao Forum for Asia      Time:2016-07-05 08:54:42     Views:289594

Please accept my warm congratulations on the BFA Financial Cooperation Conference in Hong Kong and a warm welcome to you all for coming to this event. It’s a pity that I cannot join you in person due to a previous engagement.

As is known to many of you here, the Boao Forum for Asia is the premier forum for Asia and emerging markets. Each Spring, our annual conference in Boao, Hainan Province, China gathers together over 2000 government, business and intellectual leaders to explore the most pressing issues facing Asia and emerging markets. Chief Executive CY Leung and many business leaders are our regular guests at the conference. Thank you for being always so supportive.

The Boao Forum is committed to promoting Asian economic integration and sees financial cooperation and energy/resources as two key drivers in the process. This Hong Kong conference is focusing on financial cooperation, particularly how to kick-start growth in the real economy through innovative means of financial cooperation.

Monetary policy, for instance. Too high hopes have been placed on monetary policy to rid the world of the economic frailty. Central banks around the world have tried unprecendented and unconventional monetary policies, including QE, QQE and interest rates in the negative territory. Not much have been achieved in the real economy. It is time to rethink the role of monetary policy, and probably turn to fiscal policies (where there is room) and structural reforms (which are hard, of course).

In this connection, massive and drastic capital outflow, partly as the result of the Fed interest hike, has wreaked havoc on the economic, forex and financial stability of many emerging markets. Brazil and Russia has gone into recession. South Africa is on the verge of stagnation. China’s economic growth has slowed down by a large margin. In good days, capital inflow helped with the boom of these economies. When the direction of flow reverses, what can they do to avert damage to the real economy?

When the world struggles for growth, one way out is perhaps the infrastructure. Better connectivity serves both short-term growth and long-term sustainable development. The key is financing. Public and private sectors need to work hand in hand to finance the enormous funding gap on commercially viable terms.

I am impressed by the impressive line-up of speakers and delegates at this financial conference. Though not being able to be here in person, I am convinced that the conference will come up with valuable and thought-provoking solutions on how we can spur growth through greater financial cooperation.

 

 

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