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Following is the transcript of remarks (English portion) by the Financial Secretary, Mr John C Tsang, at a media session at the Central Government Offices, Main Wing, today (September 19):
Financial Secretary: I have just given a briefing to LegCo members and LegCo members-elect on the latest situation of the financial crisis that is happening around the world and especially reactions in the Hong Kong market. Together with representatives of the HKMA, the SFC, the Insurance Authority, Hong Kong Exchange and the MPFA, I have briefed them on what action the Government and the regulatory bodies have taken to address the situation.
Much of what I said in the briefing have in fact been covered in my media sessions in the past few days. I will now concentrate on the views exchanged in today's briefing and latest market developments.
Members were naturally concerned about the effect of the global financial crisis on Hong Kong's banking system as well as our financial and insurance markets, and whether our regulatory system needs an overhaul.
I wish to make it quite clear that the prevailing state of our financial markets is a result of a global economic crisis, not problems relating to our regulatory system. In the present circumstances, investors would inevitably be affected.
In addition, we intend to ask the distributing banks to set up hotlines to deal with enquiries from their clients. We have heard that lots of investors in Hong Kong have lots of queries and they would like to get clearer information about where they stand.
All major financial centres in the world would continuously try to perfect their regulatory framework in the light of lessons learned. Hong Kong is no exception. We will constantly review our system to ensure that international standards are met and best practices are followed so that investors' interest will be even better protected.
Hong Kong, being a highly externally-oriented economy as well as a major international financial centre, will inevitably be affected by the international financial turmoil in the short term. In our earlier forecast of economic growth for the year, we had already taken into account a slowdown in the economy towards the second half of the year and we are sticking with the forecast of growth between 4% and 5%. We will have a difficult year in 2009.
As a result of a slowdown in economic growth, employers will become more cautious in employing staff. This in turn will lead to an upward movement in our unemployment figures in the next few quarters. The slowdown will also affect directly Government revenue. This will greatly limit room for manoeuvre when drafting the next Budget.
However, the fundamentals of the Hong Kong economy remain sound. While a worsening external environment and volatility in the financial markets will increase the risk of an economic downturn, Hong Kongˇ¦s longer term economic outlook remains positive.
Reporter: (About further injection of liquidity into the market)
Financial Secretary: It's fine right now. But if we should require to do more, we will.
(Please also refer to the Chinese portion of the transcript.)
Ends/Friday, September 19, 2008
Issued at HKT 19:30
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