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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 at the Legislative Council Building this (April 22) afternoon:
Financial Secretary: The unemployment situation for the first quarter of 2004 has remained stable. The seasonally adjusted unemployment rate remains at 7.2 %, which is the same as the last quarter. The underemployment rate is 3.4%, which is 0.1 percentage point increase over the last season. The total employment has actually increased by 6,500 people, and I emphasise that the total employment has actually gone up in the last six months continuously. But because the total labour force has actually increased at an even faster pace by 10,800 people. Therefore, 4,300 people more have joined the unemployment because there are more people looking for jobs than the jobs created. The increased demand for employment, and the increased demand for people is a reflection of the improving economic situation in Hong Kong. I am cautiously optimistic that this situation will continue. But because of the improving economic situation, it has also attracted more people to join the labour force, and thereby exerting pressure on a faster pace of deduction of unemployment rate. I like to re-emphasise that we are still facing economic structural change and this has caused a structural unemployment. While the economic situation is improving, at the same time more people are joining the labour force, so even though the total employment situation has been improving for each of the last six months, the pressure on an unemployment rate will continue. The Government will continue to work with the community, look for ways to allow the private sectors to create more jobs. I emphasise that we have put revitalisation of our economy and also a sustainable growth in our economy as our foremost priority.
Reporter: Is the situation a reflection of a mis-match of skills and jobs?
Financial Secretary: Your question has actually two answers. The first answer is that it is not necessarily a reflection that there is a skill mis-match because there are a number of sectors which will create jobs for people who may not be otherwise qualified for a knowledge-based economy. For example, many tourism-related trades, the transportation and logistics trades, the hotel and restaurant trades. So there are a number of trades that are not directly related to a knowledge-based economy. I think in that aspect, it may not be a reflection of a skill mis-match. On the other hand, we are going through a very vigorous economic transformation. We are going into a much more demanding kind of economy where the companies are free to move part of their operations overseas, when it is more economical for them to do so. So thereby the pressure it creates on some of those otherwise left out of this transformation is not inconsiderable.
Reporter: The seasonal unemployment rate.......
Financial Secretary : Like I said earlier the seasonally adjusted rate actually has adjusted for the graduates from schools every year. They graduate pretty much at the same time. That is why the seasonal adjustments would actually even out the graduates on that factor. The second thing is we do not make forecasts on unemployment rate because there are many factors at play including people who may consider rejoining the labour force because of the improving economic situation or including those who think the situation has changed and therefore rejoin the labour force.
Reporter: How many people...do you expect will rejoin the labour force ?
Financial Secretary: The factors are too varied because family situation may change. The children may grow up and thereby freeing some of the family members to work. Improving economic situation may attract someone who did not want to work to rejoin the labour force. So it is very hard to make any reasonable guess.
Reporter: The unemployment rate is still under pressure, but how long are we talking about?
Financial Secretary: We are talking about a situation where it is very fluid. Although we already have one of the highest participant rate for employment, for example, we have a lot more of women in Hong Kong working than in many overseas countries. But it is very hard to say how many of them will decide that they will continue to join or they have newly decided to join the labour force. As I have said, family situation will change. Children will grow up and thereby freeing someone, whether the wife who has been a housewife or the father who has been a househusband, to join the labour force. Other kinds of situation may also make someone decide to join the labour force. It is very hard to make that kind of predication.
Reporter: Greenspan indicated this week interest rates would be rising. How you are going to expect the interest rates to rise....?
Financial Secretary: First of all it would depend on how much the interest rates goes up and how fast it goes up. Interest rate should not be influenced by political factors. It should be based on economic forecast and economic factors. The American economy is showing signs that it is doing very well and that there is beginning to show pressure of inflation. So if the problem is not solved and left until after the general election, the problem may become more exacerbated, so that is why I believe Greenspan has made those comments. It is possible that he will raise interest rate sooner than we hope he would. But it is really very hard to predict right now.
(Please also refer to the Chinese portion of the transcript)
Ends/Thursday, April 22, 2004
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