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Transcript of Chief Executive's Press Conference


The following is the transcript (English portion) of the press conference by the Chief Executive, Mr Tung Chee Hwa, after his delivery of the Policy Address to the Legislative Council this (October 10) afternoon:

Mr Tung: In my Policy Speech, I have covered many policy areas, in areas of economics, social areas, education, how to improve business environment and of course, infrastructure development.

The Policy Address also addressed short, medium and long-term issues for Hong Kong.

In so far as short term measures are concerned, we are facing very serious economic downturn and we have announced a number of measures. One of them is creating over 30,000 new jobs as soon as possible within a very short time. And secondly is really to have introduced rate rebates which is also quite significant, costing about $5 billion.

And thirdly, we have suggested that there should be an additional tax rebates on interests on mortgages.

So these are there to alleviate the short term difficulties we have.

But for the medium term, we have focused on how to improve the business environment to attract more investments into Hong Kong. And at the same time, we try very hard and we will succeed in helping the medium size small size businesses in Hong Kong to develop, to help the professionals to develop.

We are also going to focus on some of the areas of strengths we have, whether they be textile, making watches and clocks, and develop further the convention and exhibition facilities.

These are very specific medium term measures.

But for the longer term, the issue is about the spending of $600 billion on infrastructure development. This demonstrates the confidence of Hong Kong in our own future.

But nothing is more important than our investment in education, because that is how we are going to face and successfully meet the challenge of a knowledge-economy.

So I hope this gives our community a very clear-cut direction.

Reporter: Many of your critics will say many of these initiatives that you
have just mentioned will not help the average person to overcome what
you have described as acute problems, without taking on board many of
the suggestions made by politicians and also economists.

Mr Tung: Well, let me tell you this, that actually we have listened very
carefully to the voices of the community. I have personally seen many,
many groups of people. The Chief Secretary has done that and the
Financial Secretary has also done that. And the measures we propose are,
as I have said, the result of all these meetings and we feel that they are
appropriate, they are necessary.

You know, creating 30,000 jobs very quickly is not an easy task, but we
are going to do this now. To reduce rebates, we have done it - five billion
dollars. And the point I was making earlier on is this: for instance, there
were some suggestions about whether the Housing Authority could reduce
rentals, both for ordinary folks as well as for the shops, and I am happy to
tell you that today they have responded positively to that.

There was also the discussion about how we can help those with negative
equity. It is very difficult for government to do this, but what we have done
is to allow more interest deductions. But at the same time, the Financial
Secretary has met the banks and discussed this particular issue and, as you
know, today the HKMA has come out and said that for the purpose of
these negative equity owners to refinance, you can go from 70% to 100%.
So things are being done and we will continue to watch very carefully as to
the external development to see what else needs to be done.

But let me tell you this, the more important thing is to focus on what we are
doing in the medium term and the long term, because those are the things
that would keep us there 10 years from now, 20 years from now, 30 years
from now, stronger and better than before.

Reporter: I was wondering, would you or would you not characterise your
proposals today as an economic stimulus package? And second, what is
your argument for not using spending as a vehicle to fuel Hong Kong's
economy ...?

Mr Tung: I wouldn't call our package a stimulus package. I think our
economy is extremely externally oriented economy and the growth of our
economy and the strength of our economy is very much affected by what
happens around the world. And there is so much uncertainty out there
those uncertainties will in fact overwhelm what we would be trying to do in
terms of economic stimulation. That would be my first point.

The second point is, unlike the United States of America, which is where, I
presume, you come from, when you do put money into the economy, the
retention is very, very low. The retention is very, very low in this economy
because we are so externally oriented. So you have to recognise this. I
would say the Policy Address - we are talking about long term, how do
we develop and successfully overcome or successfully undertake the
economic restructuring through our efforts in investment in infrastructure,
through our efforts in investment in education.

And in the medium term we are talking about how to improve the business
environment of Hong Kong which basically is already pretty good but we
would like to do more, to attract more both Hong Kong and foreign

And we have taken some short term measures, such as creating jobs and
have provided some relief, but they were done more to alleviate the
present day problem. Can it be a stimulus package? It might help a bit but
we would be too much influenced by what happens all around the world
and there is so much uncertainty out there.

Reporter: How constrained were you by the Basic Law in working out this
new system of appointing senior government officials, and in what way will
this help to improve the quality of the administration and enhance

Mr Tung: The accountability system, if implemented, I think, will help in
many different ways. Firstly, this group of officials will be there to really be
much more sensitive to the views of the community and therefore to be
able to respond to the views of the community.

And secondly, they will participate fully from A-Z in the formulation of
government policies and the implementation of government policies.
Therefore, there will be a lot more co-ordination in terms of priorities and
how do we move forward with different policies, which should go first,
which should go second, how resources should be allocated.

And thirdly, they will be working much more closely with the legislature, I
believe, because they are out there talking with the public at large, talking
with the legislators, and it will generally be a much more responsive

Yes, everything we do must be in accordance with the Basic Law and we
cannot go beyond the Basic Law.

Reporter: So you were constrained in some way?

Mr Tung: I wouldn't use the word constrained.

Reporter: What words would you use?

Mr Tung: This is like you live in Hong Kong, you have to observe all the
laws. We are here in Hong Kong, we observe the Basic Law.

Reporter: To what extent do you believe Hong Kong's future growth will
come from stronger ties with the Mainland? And in giving your Policy
Address, did you consult with Beijing about what you would talk and

Mr Tung: First, let me say this, that you know our economy and the
economy on the mainland of China are now so closely related. For
instance, in areas of foreign direct investment, last year Chinese companies
from the mainland raised US$44 billion in Hong Kong. Obviously, it is
important to Mainland China, but it is also very important to Hong Kong
because it enhances our position as an international financial centre, and
this is very, very important to us. And you can see, as China enters into
WTO, whether it is in the areas of trade, commerce, in the areas of
finance, Hong Kong's position will become more and more important, and
we look forward to playing an even more active role when China joins
WTO, which should be, in fact, in the next month or so.

Secondly, insofar as the Policy Address is concerned, obviously this is
within the autonomy of Hong Kong to prepare our own policy speech. But
in the policy speech, you will notice I made an announcement about the
agreement with the Mainland on the entry of more Mainlanders as tourists
to Hong Kong. Now these are obviously areas we talked with the
Mainland officials.

I also talked about our agreement to try to identify and find ways to
improve the quality of air between Hong Kong and the Mainland -
Guangdong Province - and obviously, these are issues we will be talking
with the Mainland about. But yes, there are some discussions on areas
which concern both of us. But other than that, no, there are no other

(Please also refer to the Chinese portion of the transcript.)

Wednesday, October 10, 2001

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