the 62 basis points of that in 2007. the growth of foreign reserves began to decelerate, and is expected to decelerate further. iv. china ’ s policy stance to be adopted in the next stage an old chinese saying goes “ ruling a country is like cooking seafood delicacy ”, which follows that ruling a country requires the same meticulous efforts as cooking palatable seafood. at present, there are more destabilizing factors in the international economic environment, and problems in china ’ s economy are becoming more apparent ; therefore, we need more patience and wisdom in order to maintain stable and rapid economic development. in the next stage, china will put maintaining stable and rapid economic growth and curbing excessive price hikes as the top priority of macroeconomic management, and put reining in inflation high on its agenda. efforts will be made to maintain the continuity and stability of monetary policy, increase the foresightedness, pertinence and flexibility of the adjustment policy, adopt fine - tuning measures when appropriate according to changing situation both at home and abroad, manage the priorities, pace and intensity of macroeconomic adjustment, encourage growth of some sectors while discouraging it of others, strengthen financial support to key areas and weak aspects of the economy so as to balance the relationship between containing inflation and maintaining rapid economic growth and promote the economy to grow in a sound and rapid manner. the year 2008 marks the 30th anniversary of china ’ s reform and opening - up. in the past 30 years, china successfully transformed itself from a command economy to a market economy, from a closed and semi - closed economy to a fully opened - up economy, making outstanding economic and social advancements. china ’ s gdp has been growing at an average annual rate of 9. 7 percent, and foreign trade 17. 4 percent, ranking the fourth and the third respectively in the world. people ’ s living conditions have achieved overall well off. but china is and will stay in the primary stage of socialism for a long time. there are still a lot of poor people in urban and rural areas ; urbanization is inadequate ; the per capita gdp ranks behind the 100th in the world. constrained by such a reality, the solution to many problems is a long - term and systemic project. when making policies, consideration should be given to china ’ s national situation, development stage and affordability. we have recognized that with increasing economic globalization, financial integration driven by financial innovation and diversification of transfer modes of financial

own purposes and the chinese government shall not levy taxes in hong kong. moreover, china will not draw on or resort to hong kong ’ s exchange fund or other assets in any way and for any reason. all financial transactions between the mainland and hong kong will be conducted in accordance with the rules and practices of international financial activities. claims and liabilities between institutions from the mainland and those from hong kong will continue to be regarded as external claims and liabilities. when participating in the hong kong market, chinese entities will have equal treatment as other international and local market participants. apart from the above, it is also important for hong kong as an international financial centre to continue to develop its international monetary relations and participate in the activities of international and regional financial institutions. there are therefore provisions in the joint declaration and the basic law that hong kong may, on its own, maintain and develop financial relations with other countries, regions and relevant international organisations after 1997. the 1997 world bank / imf annual meeting will be held in hong kong just a few months after china resumes the exercise of sovereignty over hong kong. this is a magnificent financial event and i am confident that it will be successful. iii the strengthening of financial co - operation and the promotion of economic prosperity and stability between the mainland and hong kong mainland china and hong kong have close financial links with each other. since the implementation of financial reforms and the open - door policy, such links have been strengthened further. it is necessary to further enhance such a mutually beneficial relationship between the two places. first of all, the mainland and hong kong should work together for the prosperity, stability and smooth transition of hong kong. china ’ s commitment to the implementation of the “ one country, two systems ” principle is increasingly accepted and appreciated by the people of hong kong and the international community. worries and doubts about the future of hong kong which emerged in the early 1980 ’ s have largely subsided. we are pleased to note that the financial situation in hong kong is heading towards a smooth transition. we are confident that hong kong will enjoy financial stability before and after 1997. even though there may be some fluctuations in hong kong ’ s financial market, we believe that the hkma is fully capable of handling these situations satisfactorily. if necessary, the people ’ s bank of china will, at the request of the hkma and in accordance with the basic law and market practices, offer support to the hkma. financial stability in hong kong before and after 1997 is not