Tsang Advocates Structural Reform At APEC Meeting

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

05 August 2008

Structural reform has become part of Hong Kong's continuous effort to enhance its competitiveness on the globalised platform, Financial Secretary John Tsang announced on Monday at the APEC Ministerial Meeting in Melbourne.

Speaking at the "Political challenges of structural reform" session, Mr Tsang cited Hong Kong's recent lifting of wine duty as an example. He explained that it is being used to promote the city as a wine trading and distribution hub to create jobs, and revealed that the prospects appear encouraging.

Noting the serious impact of high food and oil prices in the APEC region, he suggested that while this challenge is complex and many economies are facing unique circumstances, there are generic reform issues that the region as a whole can address, observing that:

"For example, price reforms that would gradually align domestic prices to reflect the scarcity value of the food and fuel items concerned should be encouraged. Second, fuel taxes and subsidies should be reviewed."

"Such reforms would provide the right market signals to encourage the proper supply and demand responses that are necessary to address the long-term challenges we all face."

He went on to add that the wider use of IT and e-government has been one of Hong Kong's key initiatives to enhance regulatory efficiency. Another is the use of reviews to examine why regulations are needed and how they should be applied.

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