Economic Downturn Represents Opportunity For Hong Kong

by Mary Swire, Tax-News.com, Hong Kong

03 July 2002

The Chairman of the American Chamber of Commerce in the SAR has suggested that the current economic downturn presents the perfect opportunity for Tung Chee-hwa's government, now in its second term, to reduce high costs in the jurisdiction and increase Hong Kong's attractiveness as a location for international business.

Speaking to the South China Morning Post on Tuesday, Jim Thompson explained that: 'Honestly, I believe a down-cycle is a chance to regenerate and gain strength. If we always went up, we wouldn't be competitive. The down-cycle does allow you to get stronger.'

However, he added that any reductions to Hong Kong's costing structure should be made gradually.

Mr Thompson went on to predict that the jurisdiction will achieve GDP growth of 2.5% this year, and told the SCMP that: 'There's an optimistic outlook for the rest of this year and 2003.'

Meanwhile, speaking as he began his second term as Hong Kong's Chief Executive on Monday, Tung Chee-hwa announced that his aims for the forthcoming years are to lift the jurisdiction's economy and restore confidence. However, he warned that there would be no short cuts:

'The Hong Kong economy needs restructuring,' he told those attending the inauguration ceremony, continuing: 'Obviously, the economic and unemployment problems cannot be resolved by one or two measures and nor can they be dealt with within a year or two.'

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