per cent over the year to the march quarter and more recent data such as retail trade show good rises in the two most recent months – march and april. given the growth in employment and incomes, and the fact that consumer confidence is above its longer - term average, prospects for consumption look quite good. similarly, private investment according to the latest capex survey is holding up well. we cannot expect a repeat of the 20 per cent growth we had last year, but a figure of the order of 10 per cent is likely, given the strength of investment in building and structures. the corporate sector is in excellent financial health, with conservative gearing, good profitability and ready access to credit, although it is not using much of this because of its ample internal sources of funds. most of the surveys show readings at or above average for business conditions and business confidence. i do not wish to say much about residential construction other than that it has held up for longer than we or other forecasters expected, but it now appears to have peaked despite the boost that it is continuing to receive from alterations and additions. the experience among different industries is, as usual, quite varied. although, in the aggregate, growth has been good, some sectors are suffering. agriculture during the drought is the obvious example, but more recently the tourist and international transportation sectors have suffered a sharp fall in activity associated with the public reaction to the sars virus, just when it looked like they were about to recover from the drop in travel associated with the iraq war. employment has grown by 2½ per cent over the past year although, as usual, the recorded figures show a very irregular pattern of growth. the unemployment rate at 6. 1 per cent is about as low as it has been in the present expansion. as explained earlier, consumer prices are rising at 3. 4 per cent per annum, and wage costs at about 3. 6 per cent. inflation has been close to or above 3 per cent for more than a year. this would be a source of concern if we expected the situation to persist long enough to become entrenched in expectations. but, as i said earlier, inflation is likely to decline in coming quarters, and overall growth in labour costs is consistent with the inflation target. these figures contrast with the much lower rates of increase occurring in major economies overseas where demand is much weaker and inflation targets – implicit or explicit – are, or are in danger of, being undershot. before leaving the domestic economy, i

eddie yue : towards rmb internationalisation - the role of hong kong markets opening keynote speech by mr eddie yue, chief executive of the hong kong monetary authority, at the hong kong institute of bankers ( hkib ) annual banking conference 2021, 29 september 2021. * * * distinguished guests, members and friends of treasury markets association ( tma ), ladies and gentlemen, 1. thank you for having me at this event. it is my pleasure to deliver my keynote speech at the treasury markets summit 2021. opening 2. we should all take it as a blessing that against the shadow of the pandemic, we could still host this annual event today to exchange views. the pandemic has brought profound and lasting changes to our lives, but not all of them are negative. i notice for instance that several people around me have been hiking more frequently during the pandemic and even maintained it as a habit. it is beautifully ironic that during this period of restrictions, we have had the opportunity to be outdoor more often and to interact with nature. as we enjoy and rediscover the astounding scenery and diversity of our landscape, it is difficult to not appreciate the harmony in nature or, if you prefer a more precise description, the harmony in the co - existence and interdependence of living organisms. one example is the bee and the flower : the bees need flowers for food and flowers depend on the bees for pollination. they live in harmony by helping each other survive and evolve. there is a term for it – mutualism, describing a mutually beneficial relationship between living things. and let me explain why i am talking about biology in a financial forum to begin with. 3. i have always longed to find an appropriate way to describe the financial relationship between hong kong and the mainland. in my view, hong kong ’ s dynamic with the mainland is truly unique in that it is a dynamic which no other pair in the world shares. in the financial world, our win is their win and their win is ours. as financial competition amongst the world ’ s hubs continues, hong kong and the mainland have long enjoyed a mutually beneficial relationship. sounds familiar? yes, perhaps neither of us are exactly the same as a bee or a flower, but hong kong and the mainland share a very similar dynamic as them in the financial world – one of mutual benefit. rmb internationalisation : hong kong stands out 4. and that brings me to the topic that i want to discuss