Before I do that, I should first like to update you on the state of our economy as the painful adjustment process draws to a close and as clear signs of economic recovery emerge. I should also like to address some of the concerns – unnecessary ones, in my view – that still seem to be clouding the view of Hong Kong from outside. The recovery Those of you who heard me in June last year may well be a little sceptical about any advice from me on the outlook for the Hong Kong economy. Although I was under no illusion about the less prosperous times that lay ahead, like many at the time I was perhaps a little too sanguine in my assessment about the impact that the Asian crisis would have on Hong Kong. However, the temptation now for many is to go to the other extreme: to be very cautious in making predictions about the future and to acknowledge signs of recovery only very reluctantly. This is understandable when we are still only just moving out of our sharpest recession on record. Yet even the pessimists would now, I think, acknowledge that the storm signals are down, the clouds are thinning out, and there are shafts of sunlight in the distance. I speak only metaphorically, of course.
Mr Yam comments on Hong Kong: from crisis to recovery  Speech by the Chief Executive of the Hong Kong Monetary Authority, Mr Joseph Yam, at the HKMA Luncheon on the occasion of the opening of the HKMA Representative Office in London on 28 September 1999. * * * It is a great pleasure to be speaking here in London again, and to do so at this large and expert gathering. Some of you may have been present at my last speaking engagement here, in June last year at the 11th Dragon Boat Dinner, which now seems like a very, very long time ago. In that speech I described Hong Kong, against the background of the financial turmoil in Asia, variedly as a pillar of stability, the eye of the storm and the typhoon shelter of Asia. My message then was that Hong Kong, with prudent policies and robust financial structures, had been the last and the least to be affected by the storm. Since that time, as you all know well, the tail of the storm has swept through Hong Kong and it has not been so gentle after all. The painful downward adjustment in the internal cost/price structure under a fixed exchange rate system eventually and inevitably came. This was reflected in plummeting asset prices, declining GDP and rising unemployment. Although the fundamentals of the Hong Kong economy remained sound, these events provided an attractive environment for the launch of speculative attacks.