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   Following is the transcript (English portion) of a media session by the Financial Secretary, Mr Henry Tang, on the latest unemployment rate this afternoon (March 21) at the ground floor lobby of West Wing, Central Government Offices:

Financial Secretary: The newest unemployment rate is 6.1%, a 0.3 percentage point drop from last month. This is the largest single-month drop in 15 months and this is the lowest unemployment rate in 39 months. The underemployment rate also went down by 0.1 percentage point to 3%. Total employment continued to set a record high -- 3 346 000 people and significant improvements have been seen in sanitary services, amusement and recreation services, retail as well as real estate. In the last year, the Hong Kong economy has created about 100 000 new jobs and it is very encouraging. We remain cautiously optimistic about the future.

Reporter: Is this a real recovery? Are we heading into a bubble?

Financial Secretary: I believe this is a recovery because it is fairly widespread as well as sustained, so I believe this is a reflection of the improvement in our economy.

Reporter: The US Federal Reserve is expected to raise its interest rates, maybe as soon as tomorrow. Do you see any negative impact on our economic recovery? And besides this, are there any external factors that we have to watch out for?

Financial Secretary: The FOMC [Federal Open Market Committee] is widely expected to increase the lending rate by 25 basis points. This is anticipated by the market and I don't think it will come as a surprise to anybody, so the market has digested that news basically.

Reporter: Can you see any other external factors that could put a damper on our economic recovery?

Financial Secretary: There are a number of external factors that might put a damper on our economy. Whether the macro-economic control measures (in the Mainland) are sustainable and what implications they will have on Hong Kong, the US dollar exchange rate and also the oil prices, whether it will have any lagging effect on the world economy and hence on our economy. All of those and also of course the US interest rates. All of those may have implications for us. It all depends on how far and how steep they go.

(Please also refer to the Chinese portion of the transcript.)

Ends/Monday, March 21, 2005

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