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Following is a transcript (English part) of a stand up media session given by the Financial Secretary, Mr Antony Leung, at the West Wing Lobby of the Central Government Offices today (August 31):
Financial Secretary: We have seen that the Government Economist has revised the GDP forecast for this year down to 1 % from the original 3%. The major reason for such downward revision is a continued slow down in the external economy, particularly in our major trading partners. While 1% is lower than the original forecast, I'm sure you are aware that this number is still quite a bit better than some of our neighbouring regions. Some of them are actually suffering a lot more from this external downward revision. Obviously in Hong Kong besides adjusting to the external economy, we are also facing a major economic restructuring, from an industrial economy to a knowledge economy. The Government and all our citizens will face the future together. What the Government will do, as I've said in previous interviews in the last few days, is that we will focus on two particular areas. One is that we will improve the business environment in Hong Kong so that we can provide more job opportunities for our citizens. The second area is to provide opportunities for our citizens to upgrade themselves continuously particularly through various means of life long learning. While the near term outlook is not that positive, there are a lot of opportunities for Hong Kong. In particular, because our hinterland, the Mainland of China, is growing at a very rapid pace. There are many predictions that China will be the second strongest economy in the world in the next two decades. With such changes, there should be lots of opportunities for Hong Kong. I believe in our people. Hong Kong people have the wisdom, have the skills, have the ability to change quickly and find opportunities, as well as have the ability to strive for excellence. With all these good qualities and with the Government working together with our citizens, I am quite sure that together we will find a better future for ourselves.
Question: ... and the negative growth in the second quarter, do you think Hong Kong is down to recession. If not, how do you define it?
Financial Secretary: I believe the numbers show that in the first quarter we grew by 2.3% and in the second quarter by 0.5%. You can say that on quarter-to-quarter basis we are not really growing that fast. On the other hand, the technical definition of a recession is two quarters of negative growth, we haven't seen it yet. We are not saying whether we will or will not be in a recession. As you can see, the number we are forecasting for this year is 1%. But that is really not the point because a lot really depends on the external economy. What we hope is that the Government and the citizens will face the situation together, and as I said the Government and the citizens will have our parts to play, I am quite sure that we can face it positively and will come out a better economy.
Question: Education and retraining are things that are good in the long term, for the short and mid term, there's really not much the Government can do? Second, are problems we are facing problems of structure rather than cycle...?
Financial Secretary: Indeed. I think I have said many times, today as well as in previous days, that the problems that we are facing are two-fold. One is that, we are suffering from the external economy's slow-down, and Hong Kong, being such an open economy, will definitely be affected. Secondly, Hong Kong, just like many other economies in the region, suffering or not suffering, we are facing structural changes. The Chief Executive has said many times that we are changing from an industrial economy to a knowledge economy and theses are truly structural changes. So, I think what you said is absolutely right. But what the government can do to face the structural changes is not to introduce short term measures, because short term measures will not address these structural problems. What I've said many times is that, the Government, in facing these structural problems, will do two things: one is that we'll improve the business environment, and that's why we are working on quite a number of fronts, sector by sector, as well as improving the competitiveness of the entire economy. Secondly, really is to provide opportunities for our people so that they can really upgrade their skills continuously.
Question: We are having deficit budgets as well, the question is, are we facing structural budget deficit?
Financial Secretary: I think it would be quite academic to define whether we are facing structural deficit or not, but the fact of the matter is, we will have a deficit this year and possibly next year.
(Please also refer to the Chinese transcript).
End/Friday, August 31, 2001
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