Following is the transcript of remarks by the Financial Secretary, Mr John C Tsang, at a media session at the Information Services Department Press Conference Room, Harbour Building, Central, today (October 3):
I shall now do a quick recap on the situation over the past week.
On Monday, government bureaux and departments in charge of financial matters activated their contingency plans to minimise the impact of the "Occupy Central" movement on the local financial system and financial market. As of today, the financial system, the stock market and the foreign exchange market have been functioning properly and remain in good order. Hong Kong's banking system and the Currency Board mechanism have been functioning normally as well. But due to the blockage of some thoroughfares by protesters, some bank branches and ATMs have to close. The Hong Kong dollar exchange rate remains generally steady, and no abnormality has been found in the foreign exchange market.
The stock market has been operating smoothly. The total turnover for the past three trading days amounts to some $270 billion. The Hang Seng Index rose by some 130 points today, but dropped by some 610 points in the last three trading days. The Securities and Futures Commission has not noticed any abnormality so far.
Up to now, there is still no indication that the protest activities will end in the near future. I would like to remind the public that the market will continue to be volatile and fluctuate in the short term. Investors should be mindful of the risks. My colleagues and I shall continue to monitor the market situation closely and shall put in place appropriate measures as and when necessary.
OK. I'll take some questions.
Reporter: You have mentioned stock market and exchange market have been functioning well. So, what makes you think that there may be some structural damage, and do you think investors' confidence may be undermined, or is this mere speculation? The second question is ....
Financial Secretary: Can I answer this question first? We have been preparing to minimise the damage caused by "Occupy Central" for some time, so we are prepared to deal with the short-term fluctuations that we are facing now. So, if this situation would not persist, we should be able to deal with the situation. But if this situation were to persist, then we are going to see some damage to our system, and particularly our most concern is about our reputational risk as well as the confidence in the market system in Hong Kong. That would be a permanent damage that we could not afford.
Reporter: The second question is that will there be any change, by any chance, any last-minute change in the Shanghai-Hong Kong through train scheme because of the occupation?
Financial Secretary: As far as I am concerned, that will continue as intended. There is no reason for that to change because a lot of our investors and a lot of our financial institutions have made a lot of preparation and we are ready to go. And this is the market, so people would have to face whatever situation that we have.
Reporter: Mr Tsang, two questions. Just now you mentioned the polarisation of the society, which is not good for Hong Kong society. Do you think that it is the "Occupy Central" that has polarised the society or the Government's not answering the livelihood issues of Hong Kong people, particularly high land prices, high property prices and the more and more unaffordable education and the long queues outside public hospitals? Do you think it is these that have further polarised the society together with the Police's using violence last week? And secondly, Martin Lee Chu-ming has asked senior government officials to resign to show their support to the fight for genuine universal suffrage. Would you resign? If not, why?
Financial Secretary: I'll roll both questions into one. I think Hong Kong has come to a critical juncture at this time. Not only the protesters, not only Government have been affected in a very, very strong way, but also the general public. Not just the public but also their well-being, their future have been affected. But this is the time that we should look to resolve the problems that we are facing. This is not the time to discuss, to lay blame or to talk about resigning. This is the time for work, and let's work together to make that happen.
Reporter: Do you think that the Government's action has been polarising the society instead of "Occupy Central"?
Financial Secretary: As I said, this is the time that we've got to come together to resolve problems that we are facing. It's not a time to lay blame or to find fault with anyone.
Reporter: Besides the political uncertainty we face now in Hong Kong, there's also the likelihood of interest rates rising in the US, to which the Hong Kong banks are more exposed to, because there is very fast credit growth recently, the Hong Kong bank connected to this. At the same time we see the Chinese economy slowing down. Taking all these three factors together, how well prepared is Hong Kong to face three challenges?
Financial Secretary: I heard that Professor Roubini also said something pretty drastic. Yes, the external sector is quite volatile. Interest rates in the US may rise again, QE is starting in Europe, Chinese economy is slowing down somewhat, Japan is not doing particularly well. I mentioned a few weeks ago in one of my blogs that all these different scenarios are not good, but the worst thing that could happen is all these things happening at once, creating the perfect storm, but I certainly hope that it won't happen.
(Please also refer to the Chinese portion of the transcript.)
Ends/Friday, October 3, 2014
Issued at HKT 20:37