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Following is the transcript (English portion) of the media session by the Financial Secretary, Mr Henry Tang, on the latest unemployment rate at the lobby of the Central Government Offices (West Wing) this afternoon (September 18):
Financial Secretary: I am pleased to see that the June to August figure for unemployment has come down to 8.6% and under-employment has also come down to 4%. There has been a significant improvement in some of the tourism-related industries, such as hotel, catering, restaurant, as well as transportation, so on and so forth. There also has been some improvement in the decoration and also maintenance trades. Vacancies have also increased by 13.3% and many of them are from new employers. Now because unemployment figures are a lag indicator, I believe the fact they have started to improve is an indication that our economy is beginning to recover. I hope this recovery is sustainable and I believe with many of the measures that are being implemented now, our economy should continue to improve.
Reporter: Secretary, you sound cautiously optimistic. Is that a fair assessment of how you are feeling?
Financial Secretary: I think you have known me long enough (to know) that I am always cautious, whether I am optimistic or pessimistic. I think in this case you could say that I am cautiously optimistic.
Reporter: Would you say one-tenth of a percentage point spread over three months is very strong grounds for even cautious optimism?
Financial Secretary: Yes, and I always look beyond my nose and not just look at one month and look at a number of months. In fact, we publish these figures once a month on a three-month rolling month basis. This is a 0.1% decrease, last month was a 0.1% increase, the one before that was a 0.3% increase, and the one before that was a 0.5% increase. So you can see that there's a clear trend that the increase in the unemployment rate has been diminishing until the last month when it peaked at 8.7% and now it is beginning to come down. I hope it will mirror this trend the other way.
Reporter: Are you sticking to your upgraded annual growth forecast of 2%, and what's the possibility of a recurrence of SARS?
Financial Secretary: Yes, I am sticking to my forecast of 2% for the year. The next time we publish a forecast will be sometime in November, when we will be forecasting again. Whether there will be any change, I don't know yet. Last time when there was a suspected case of SARS we saw that the stock market had a reaction. However, the community is quite mature and there was no panic reaction. I believe Dr EK Yeoh is going to give a full briefing on SARS, the contingency prevention and our plans if there were another recurrence.
Reporter: Secretary, do you think that this pattern that you pointed out is the result of a natural feel-good factor of people after SARS and its apparent going way, or can you point to anything that is structural that can help explain why we are seeing this and why you think it might continue?
Financial Secretary: I think when people feel good, they go shopping, they go out for a meal with the family, they go to a movie, they don't go to buy stock. So I think some of the performances of our stock market, or the increased interest in real estate is not just (due to) a feel-good factor but rather Hong Kong is beginning to regain some of the confidence we lost in the last months or so. What prompts a person, or what prompts a community to regain our confidence depends on many factors. There are now more tourists, there are people who feel a little more stable, they are a little more positive about our figures, they are also more positive about our trade, our Closer Economic Partnership Arrangement, they're more positive about Central People's Government support for Hong Kong under the one-country-two-systems. I think many of these contributing factors point to a regain of confidence and that is probably a more structural explanation of our better performance.
Reporter: Do you think the positive trend, again to return to that, makes you any more or less confident that you can meet the 2007 target of balancing the budget? Or do you think you will need a little more time?
Financial Secretary: I will need a little more time.
Reporter: How much more?
Financial Secretary: I am planning to make a statement in Legco, like a mid-financial year review, sometime in October, after they have resumed sitting. I will do a more comprehensive report then.
Reporter: And you will suggest perhaps you'll extend the date, if I'm interpreting what you're saying, you may need a little more time to balance the budget beyond 2007?
Financial Secretary: Yes.
Reporter: Could you mention your thoughts on the rating?
Financial Secretary: I completely concur with the Chief Secretary that Hong Kong deserves at least a AA rating, because the fundamentals of our economy are very strong, we have a very strong trading system with the world as well as with the Mainland, we have very strong current account balance on world trade, we have a very strong fiscal balance and also we have a very strong and robust financial system. So I think with all of these advantages, they should take a second look at us.
Reporter: You don't feel we're being dragged down by concerns about the Mainland, RMB etc?
Financial Secretary: I don't think the Mainland RMB should be a drag but rather a boost to us. If we can manage to secure that we can do the four RMB businesses, which is exchange, deposit, remittance and credit card business, in Hong Kong as soon as possible, I think it will be a major boost for our financial system. So again I don't think anybody in their right mind would call this a drag. Thank you.
(Please also refer to the Chinese portion of the transcript.)
End/Thursday, September 18, 2003
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