Hong Kong Chief Positive As Confidence Slumps

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

07 February 2002

As the twice-yearly MasterCard International MasterIndex survey showed consumer confidence in Hong Kong sagging in the final quarter of last year to its lowest ever level, Chief Secretary Donald Tsang Yam-kuen promised Hong Kong people last night that the Chief Executive and the Government would learn from the mistakes made since the handover in the SAR's future governance.

The survey result outcome was in sharp contrast to confidence across the border among mainland consumers which soared to the highest level ever recorded. Hong Kong responses scored a dismal 12.5 on an index of zero (most pessimistic) to 100 (most optimistic). The SAR's collapsing property prices and a rising incidence of householders with negative equity were among the main reasons for the fall in confidence, MasterCard International vice-president and Hong Kong manager Danny Cheung said. The previous low point was was 13.1, reached in the second quarter of 1998, and the highest was 74.2 recorded in the second quarter of 2000.

The survey, completed in December last year, canvassed 5,457 respondents for their views. MasterCard International senior vice-president for corporate services in the region, Stuart McDonald, said: "The survey was conducted when consumers in Asia were grappling with a global economic downturn, political and social upheavals, and of course the September 11 aftermath. "It is noteworthy that despite all these challenges, there are markets that are optimistic about the next six months. There have been signs of recovery in some sectors, and we all hope that these positive developments will eventually pave the way for a regional rebound."

Said Mr Tsang during a Legco session: "Mr Tung [Chee-hwa] and the Government will positively respond to the challenge ahead. I hereby make a guarantee to Hong Kong people that we will learn from past experience, understand our wrongs and mistakes.

"We will strive to preserve the factors behind Hong Kong's success and actively build up our strengths," he said at the end of a debate called "Looking back on the Chief Executive's administration during his term of office".

Moving the debate, Democrat leader Martin Lee Chu-ming said: "The problem of Hong Kong is actually Mr Tung Chee-hwa. Mr Tung thinks he's a brilliant doctor, not knowing that he is only a puppet ordained by President Jiang Zemin. He has no legitimacy and does not have the trust of people. He's an unlicensed doctor who thought the bad medicine he gave was good for Hong Kong."

Ambrose Lau Hong-chuen, chairman of the Hong Kong Progressive Alliance, said Mr Tung should not be blamed for the problems left over from the colonial government. "Our economy is better than those of many Southeast Asian countries," he said.

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