a : a large part of the weakness undoubtedly comes from the global economy and from the fact that exports are not growing as rapidly as they have in previous years. within the economy, investment demand grew very, very rapidly in 2011 and in some part of 2012. that has slowed down significantly – that presumably means that people looking ahead are less impressed by 3 percent growth than by 5 percent growth which is what we had until 2011, for some time. so i think that ’ s a potential source of difficulty, and for the rest, i think there is a great deal of uncertainty – geopolitical uncertainty, and there is also governmental uncertainty, about what the next government will doq : let ’ s talk about that. what are you most worried about what the next government might or might not do? a : well, that ’ s a major worry – its not going to be easy to deal with this budgetary problem, in light of the fact they were not able to pass a budget a few months ago. the major challenge is whether the next government will be able to do what was done in 2003, which was to put bis central bankers ’ speeches the economy on a very successful course of growth, based on the plan which got the budget into shape and which started liberalizing the economy. that seems to be the major challenge. what ’ s the concern? that instead of that, because of the political situation or whatever, there will be a budget which just scrapes by. that means that next year, in 2014, we ’ ll find ourselves again scrambling to get close to a budget target that is not as ambitious as it should be. the deficit for this year, which is supposed to be 2 percent, will be around 4. 2 percent. one guesses that next year they ’ ll be aiming at 3 percent ; when they said that 3 percent was the target for this year, we were arguing for something a little bit less. it ’ s difficult to be ambitious at the beginning ; it ’ s much more difficult to be ambitious later, down the road, when you ’ ve already not done it once or twice. so that ’ s really a major concern. the second issue is one which is much more difficult to deal with, which is the issue of the business climate, as seen both from outside and from within. the world bank issues a report each year called “ doing business ” which ranks countries in terms of how easy it is, or how difficult it is, to

tests together with their usd correspondent banks in hong kong. on the back of the keen interest observed, i am confident that we will see sizeable flow of transactions through this link. 8. expanding the footprint of the local financial market infrastructure is a strategy actively pursued by the hkma to develop hong kong into a regional payment and settlement hub. this pvp link with thailand is the third of its kind in the region, preceded by the launch of the links with malaysia and indonesia, in 2006 and 2010 respectively. according to the latest triennial survey on global fx market activity of the bank for international settlements, the average daily turnover in fx transactions in asia increased by 27. 5 % from us $ 962 billion equivalent in april 2010 to us $ 1, 227 billion equivalent in april 2013. this is in line with the growth in the activities of the two existing cross border pvp links recorded by us. since 2010, the combined average daily turnover of the links with malaysia and indonesia has doubled, reaching a new record of us $ 5. 4 billion last month. this is equivalent to an annual growth of about 23 %. other economies in the region, especially those with significant fx transactions, can similarly be benefited from a reduction in settlement risk and increase in efficiency in the settlement of fx transactions by establishing a pvp link with the usd rtgs system in hong kong. 9. the hkma will continue to watch out for opportunities to collaborate with asian neighbours to develop infrastructural solutions to meet growing regional demand for more efficient and robust settlement solutions. 10. lastly, i would like to thank bot again for the bank ’ s commitment and professionalism leading to the successful launch of the pvp link. based on the solid foundation laid through this project, i keenly look forward to working with bot in other areas of central bank cooperation to contribute further to regional financial stability and prosperity. 11. thank you. bis central bankers ’ speeches