If Taiwan continues to take unilateral action, pressure will be piled upon it, even from the U.S..
We don't think there will be immediate conflict between Taiwan and mainland China, but it will put increasing pressure on Taiwan against declaring independence.
The widening rate gap between the U.S. and HK in the later part of 2006 will likely be accompanied by a strong HK dollar.
The strong domestic economy should cushion the impact of an anticipated slowdown in Hong Kong's trade growth this year.