during this period, the financial industry made use of the opportunity offered by economic growth, consolidated the foundation for sustainable and stable development. a brief look back of past history of the macao economic development and change in industry, we can perceive the pattern ; the two significant developments of macao financial industry were brought about by the rapid growth of the economy and prosperity. in the 70 ’ s and 80 ’ s, the policy to diversify manufacturing industry enabled new manufacturing industries to flourish. coupled with the prosperous development of other pillar industries and the legislation promulgated in 1982 which allowed banks in macao to expand their activities, the financial system had a rapid growth which in turn stimulated economic development. in 1999, after the return to the motherland, under the auspices of the central government and leadership of the msar government, macao experienced economic consolidation to rapid growth. the financial industry also benefited from phenomenal economic growth. financial products became highly diversified and differentiated. services network, channel and related quality were enhanced. risk control, management and resilience continued to be strengthened. in the face of this unprecedented global financial crisis, our financial system emerged relatively unscathed, while the operating results continued to stay at a high level. all along, capitals from the mainland, portugal and hong kong dominate the macao banking industry and account for a large chunk of the market. together with branches of the us, the uk, france, singapore and chinese taiwan banks, the banking system of macao as a whole is pivotal to the industrial transfer of macao. in the 80 ’ s to the beginning of the 90 ’ s in last century, the pearl river delta was the ideal relocation area in attracting industrial transfer due to its comparative advantage in its convenient location, availability of labour and cheap land cost. macao enterprises made full use of the opportunity provided by the reform / opening - up policy of the nation to move their labour - intensive production base to this area. from a micro point of view, the migrant enterprise, in the course of transfer, will face the problem if it can obtain the much sought financial services in the new location. how the local financial institutions can provide the necessary funding services for the migrant enterprise under controlled risk is an issue for financial regulator. generally speaking, the local financial institution has limited information on the migrant enterprise. there is insufficient knowledge of the financial condition of the migrant enterprise, its cash flow, its profitability, its debt servicing ability, the quality of management, hence it

especially if several of these factors weakened at the same time and the economic climate deteriorated sharply. that ’ s a long way from our central forecast, but uncertainty about how consumers might react to higher interest rates has been an important reason for tightening policy gradually since last november. we have also avoided springing surprises. i think that ’ s important : people are more likely to believe what we say, if our behaviour is reasonably predictable. but we wouldn ’ t be doing our job if we didn ’ t constantly revise our views in the light of new information and new research. that is why every month has to be a fresh decision. and why i can honestly say that i don ’ t know, any more than anyone else, where rates will be in a year ’ s time. compared with a year ago, interest rates have risen from 3. 5 % to 4. 5 %. but the international outlook is clearly stronger now, the domestic economy is buoyant, and inflation remains low. that ’ s how we like it : and the lesson you should draw from our readiness to tighten policy over the past seven months is that we are on the case. i hope that will give you the confidence to focus on your main business ; creating wealth and ‘ making people happy ’.