Those still-plunging retail sales figures reported for March require a few observations to be made. The first is that the bane of economists almost anywhere in Asia is the Lunar New Year holiday. Why can it not fall conveniently on the same days of the Gregorian Calendar every year? But it doesn't. It varies from mid-January to late February and when you chart things like retail sales you constantly get up and down blips at the beginning of the year. The only solution is to take a three-month average. Don't even look at such figures without doing it. The second is the question of just who is doing the buying. Our economy has more visitors for its size than any other in Asia and their purchases are sizeable too. Tourist expenditure is the equivalent of 32 per cent of total retail sales. Let's say that half of this expenditure does actually constitute retail purchases and the rest is hotels and incidentals. Tourist arrivals fell drastically between mid-1997 and mid-1998 so let's take the estimated sales to visitors out of the picture. What you get, as the first chart shows, is something odd. The red line shows you the overall growth of retail sales and the green line shows you what Hong Kong residents alone did. Notice that the green line was much higher than the red line in late 1997 and is now lower. What seems to have happened here is confirmed by other statistics. The real impact of the financial crisis which broke out in the rest of Asia in mid-1997 did not really hit us until the end of 1997. We continued blithely to pour out money for consumer goods while visitors were already deserting us and retail sales elsewhere had collapsed. Then reality struck home and down we plunged, harder than we might otherwise have done. Now add another complexity to the figures. We travel more than our visitors seem to do. Resident departures are five times visitor arrivals. Shenzhen is rapidly becoming our shopping paradise and we have estimates in our national accounts for how much we spend abroad in total. Take half of this figure again and add it to what we alone (not our visitors) spend in retail sales in Hong Kong to get an estimate of just what sort of spenders we are overall. You now get the blue line in the chart. We're still down but not as badly as in the other two ways of looking at it. Finally, let's get away from value figures and look at volume of retail sales. Prices have been falling recently and the picture therefore looks much brighter in volume than in value terms as the second chart shows. We're seeing some definite evidence of recovery now. In particular, look at those growth figures for clothing and footwear. The latest inflation report says prices here have fallen by 24 per cent over the past year and about time too. The clear result is that people are beginning to buy again. Score that as another triumph for the invisible hand of free markets.