********************************************************
Hong Kong had introduced a basket of targeted stimulus measures to tackle the financial crisis, the Financial Secretary, Mr John C Tsang, said today (November 12) at the Asia-Pacific Economic Co-operation (APEC) Finance Ministers¡¦ Meeting.
The strategy was based on a three-pronged strategy: stablising the financial system; supporting enterprises; and preserving jobs.
Speaking at the plenary one session ¡§Global Economic Developments and Implications for Fiscal Measures¡¨, Mr Tsang told the meeting that Hong Kong¡¦s stimulus and relief spending amounted to HK$87.6 billion.
¡§This is equivalent to about 5.2% of our GDP. This does not include the commitment for the 100% deposit insurance and the special loan guarantee scheme.
¡§We are seeing positive results from the stimulus measures. Our GDP rebounded 3.3% in the second quarter of this year compared to the first quarter. The decline in exports has narrowed. We expect further improvements when our third quarter results are announced,¡¨ he said.
Mr Tsang pointed out that the springing of ¡§green shoots¡¨ might be partly the result of the stimulus packages launched so far. At the G20 meeting in St Andrews last week, finance ministers agreed to maintain support for the economic recovery until it was assured.
¡§We should watch out for the cumulative effect on our financial system of the host of reform measures that are being deliberated in the various international financial institutions in the wake of the financial crisis.
¡§The last thing that we want to see is a relapse of a credit squeeze in the market as a result of the implementation of the basket of banking reform measures. There is a need to strike a balance, and definitely, we do not want to nip the ¡¥green shoots¡¦ in the bud inadvertently.
¡§In this respect, there is merit in conducting an impact analysis on the cumulative effect of the various reform measures that are now being contemplated,¡¨ he said.
Mr Tsang said regional co-operation would help smooth exit strategies and avoid any adverse shocks to recovery. In this regard, the Hong Kong Monetary Authority had set up a tripartite working group with Bank Negara Malaysia and the Monetary Authority of Singapore to work out a smooth exit strategy.
Noting that APEC was the ideal platform to discuss a co-ordinated and concerted approach to exit strategies as well as a sustainable recovery for the region, Mr Tsang said Hong Kong, China was happy to work with others in the coming year to contribute to the process and to share the experience.
In the plenary two session ¡§Facilitating Finance for Sustainable Growth¡¨, Mr Tsang shared with the meeting Hong Kong¡¦s strategy for sustainable growth while at the same time improving the environment for the community.
As Hong Kong had entered a new phase of economic growth and integration with the Mainland, Mr Tsang said the 10 major infrastructure projects would enhance the long-term competitiveness of Hong Kong as well as the region.
¡§All these projects will not only upgrade our infrastructure and create employment, they will also enhance our long-term competitiveness and spur economic growth in the region. A rough estimate indicates that the 10 mega projects, when fully developed to a mature stage, would bring about US$13 billion of added value to our economy each year, which is equivalent to 5% of our GDP in 2008. About 250,000 jobs would be created,¡¨ he said.
In this morning, Mr Tsang attended the Ministerial Retreat in which ministers focused discussions on new sources of growth and how APEC could further advance structural reforms to raise the potential output growth rate.
Ends/Thursday, November 12, 2009
Issued at HKT 17:00
NNNN
