Hong Kong Chief Executive Outlines Economic Policy

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

09 January 2003

Speaking on Wednesday, Hong Kong's Chief Executive, Tung Chee-hwa warned that there will be no quick fixes for the SAR economy, but once again stressed the government's commitment to increasing taxes and reducing spending in an effort to generate additional revenue.

In the face of a growing deficit, Financial Secretary, Antony Leung Kam-chung has been bombarded from all sides with suggestions as to measures which should be included in his March budget. However, in his annual speech outlining broad economic policy over the next five years, Mr Tung was giving little away.

'The economic situation we are facing is severe and unprecedented in decades,' he observed, continuing: 'We...intend to introduce appropriate tax increases and adjust government fees and charges upwards to help eliminate the fiscal deficit.'

According to a report from regional news service, Channelnewsasia.com yesterday, the Chief Executive also stressed the need for closer ties with the Chinese mainland, currently undergoing a phase of rapid development:

'Given our geographical location and cultural ties, we have a special relation with Guangdong province, particularly the Pearl River Delta...We should make the Pearl River Delta the economic hinterland supporting development in the rest of the country. In turn, the delta can use Hong Kong's strengths to elevate the competitive status to become a global player,' he suggested.

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