INSTAT’s data reveal that Albania’ s economy grew 3.1% in 2011, supported mainly by the increased external demand for goods and services, whilst the domestic demand performed sluggishly. The economic growth was materialised into a better performance of services sector and individual branches of industry, while construction continues to suffer from sluggish demand and high inventory, especially of residential buildings. These developments reflect the internal restructuring of the economy and Albanian business, in response to changed aggregate demand composition and the need for enhancing the economic competitiveness in the region and world-wide. Consumer price inflation appeared volatile in 2011, due to upward prices in international markets and other supply-side shocks. However, the past year’s average annual inflation was 3.5%, i.e., in line with Bank of Albania’s target. The meeting of inflation target was driven by low inflationary pressures from the domestic economy, controlled monetary expansion and anchored inflationary expectations. Meeting inflation target amidst a challenging environment, full of unexpected developments, reflects the effectiveness and credibility of Bank of Albania’s monetary policy. Our unwavering commitment to maintaining price stability has led to anchoring inflationary expectations. Inflation anchoring has brought about direct benefits to the economy, in the form of mitigating economic fluctuations and reducing the intermediation cost of macroeconomic policies. BIS central bankers’ speeches  1  Year 2011 was featured by an increasing harmonization of macroeconomic policies. These policies stimulated the Albanian economy, but were prudent in terms of maintaining macroeconomic and financial stability in the country.

Today over 60 per cent of foreign direct investment into the Mainland is routed through Hong Kong. A similar figure applies to China’s outward investments. Hong Kong is the pre-eminent fund-raising venue for Mainland corporates, through equity IPOs, debt issuance, bank lending, and various forms of private investment. In recent years, two major developments in financial linkage have been gaining momentum. One is the continuous opening of the Mainland’s financial markets to global investors through the various northbound Connect schemes with Hong Kong. The other is the increasing southbound traffic, again through the Connect schemes, that enables Mainland investors to invest in overseas financial assets. These are significant developments. They demonstrate China’s confidence and willingness to be connected to the global financial markets. The southbound schemes also send a clear 2/4  BIS central bankers' speeches  message: as China’s economy grows and its people become more affluent, both institutional and retail investors look for more diversified allocation to overseas assets. Let me offer some context here. When we think about the northbound traffic, we should bear in mind that, in global terms, China’s stock and bond markets are second in size only to their US counterparts. For the southbound traffic, we are talking about managing the wealth of the world’s second largest economy and most populous country. And we are only in the early stages of these two-way flows through the Connect schemes. Hong Kong is the natural choice of venue to host the Connect schemes.