CRI听力:HK Expects Further Economic Slowdown This Year

Hong Kong's Financial Secretary John Tsang says he has grave concern about Hong Kong's future development in light of recent political volatility, which will affect the economy undoubtedly.

"As Financial Secretary, it is my duty to mobilize resources effectively to maintain Hong Kong's economic development and fiscal health; to support local enterprises, in particular the small and medium enterprises, to cope with economic volatilities; and to safeguard the jobs of workers."

Tsang commented on Wednesday after delivering his annual budget speech. Economic growth in the city came in below the 10 year average of 3.4 percent for the fourth consecutive year.

The major macro-economic indicators are also the worst in most categories since the global financial crisis, with exports of goods and retail sales recording the first annual decline since 2009, and tourism arrivals lower by 2.5 per cent from a year ago.

The unemployment rate remains low at 3.3 percent, but Tsang says the slumping retail and tourism sectors could spill into the job market this year. The government will inject 140 million HK dollars in the sector to enhance Hong Kong's attractiveness and competitiveness.

"The tourism industry has entered a period of consolidation. In view of the changing mix and spending pattern of visitors, we need to review the development strategy of our tourism industry. Other than seeking growth in visitor numbers, we should move towards diversified and quality-driven high value-added services, with a view to attracting more high-spending overnight visitors to Hong Kong."

Meanwhile, Terence Chong, director of the Institute of Global Economics and Finance with Chinese University of Hong Kong, says the government could record a deficit in the next year or two if the economy remains bleak.

"There are cycles in the economy. The property market is declining at the moment, while the public revenue is mainly from land prices, taking profit tax and stamp duties into account, that is about 300 billion HK dollars altogether. If it drops by 10 percent, that's 30 billion less in revenue. It is unlikely the expenditure would decrease in the future, so it is not surprising to see a deficit soon."

In the budget plan, Hong Kong will further support and nurture innovation, start-ups, and creative industries to maintain its competitive edge, as well as coordinate with the nation's "Belt and Road Initiative" to explore Hong Kong's unique role.