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Hong Kong's Economy Regains Vitality

On May 8, nearly 700 outstanding politicians and economists and business leaders gathered in Hong Kong to attend the 2001 Fortune Global Forum. Chinese President Jiang Zemin delivered an important speech at the banquet given on the occasion of the opening ceremony. For a while, the world once again focused at the Xiangjiang River.

It is not accidental that Hong Kong gains the status of hosting the Fortune Forum. The annual Fortune Forum, called "The World Economy Olympics", faces extremely harsh condition in site selection. Generally, the site is chosen at the place where the global economy is most vigorous to facilitate the "surging of brain work" and the "inspiring of new thoughts" of industrial and business magnates. The fact that the first annual meeting of the Fortune Forum in the new century is being held in Hong Kong is undoubtedly a best affirmation of Hong Kong's economic development.

Indeed, Hong Kong's economy which has experienced the severe test of the Asian financial storm has once again projected a self-confident image.

--In 2000, the growth rate of Hong Kong's economy reached 10.5 percent, the highest ever in Hong Kong in the past 13 years, as well as in Asia and the world at large. Calculated in terms of aggregate, the goods and service created by Hong Kong in 2000 had topped the level reached before the financial storm in 1997. All these developments indicate the strong momentum for an all-round recovery of Hong Kong's economy. According to an estimate made by the government of the Hong Kong Special Administrative Region (HKSAR), a 4 percent increase is expected this year for Hong Kong's economy, and this growth trend will continue in the coming years.

--Phenomenal growth in import and export trade. Available statistics show that the growth of the value of Hong Kong's overall import and export goods in 2000 exceeded 15 percent over the previous year.

--Previous prosperous scene has reappeared in tourism as an important pillar industry. The number of visitors to Hong Kong in 2000 reached 13.06 million/times in 2000, up by 15 percent, bettering the record set in 1996.

A Beijing businessman, who was a frequent visitor to Hong Kong, told these reporters that in 1997 when he came to eat at a Hong Kong restaurant, there were only one or two eaters sitting on a corner, presenting an atmosphere of dreadful quietness. Today, almost every restaurant is crowded with diners. Appraisal made by the international community can also refract the achievements gained by Hong Kong in its economic recovery.

Getting Out of the Shadow of Financial Storm

More than three years ago when the auspicious atmosphere of celebrating Hong Kong's return had not yet dispersed, dark clouds stemming from the Asian financial storm had descended upon the city. This brought the stock market to the verge of collapse and greatly hurt all the four pillar industries of finance, real estate, trade and tourism, reducing the entire economy to a negative growth non-existent for many years.

At this crucial moment, the HKSAR government headed by Tung Chee-hwa made vigorous efforts to stem the raging tide and, with the firm support of the central government, adopted a series of resolute measures to firmly curb economic glide.

Breaking the so-called convention rule of non-government interference in the free market economy, the HKSAR government allocated over HK$110 billion worth of foreign exchange funds with which to purchase some local stocks so as to defend the Hong Kong stock market and the exchange rate-associated system. Up to April this year after only 32 months, the SAR government had withdrawn this sum of money, furthermore, it held stocks of equal value.

Boosting economic growth by enlarging investments in public worksb. The SAR government and the Disney Corporation reached an agreement on spending HK$22.4 billion on jointly establishing the Hong Kong-Disney Amusement Park, the first-phase project will be put into operation in 2005, which will bring to Hong Kong HK$148 billion worth of economic returns and tens of thousands of employment opportunities in the next 40 years. In addition, the SAR government has actively built and expanded subways, expressways and other infrastructure facilities.

Relieving people of difficulties by refunding tax and freezing charges. The SAR government has also returned 10 percent of the 1997 and 1999 payable profit tax, salary tax and real estate tax, with the total value reaching HK$8.5 billion, benefiting 1.25 million tax payers. At the same time, it has continued to freeze the service charges which the government department should provide for the city dwellers.

Carrying out financial reform by combining unclogging and plugging. Unclogging means improving efficiency, stimulating investment and enhancing the charisma of the financial center. Plugging means blocking loopholes, strengthening supervision and control and preventing excessive speculative practices.

The SAR government cherishes high aspirations, goes with the surging tide of the global "knowledge economy" and actively raises the proportion of innovative science and technology and high value-added industries in the economic system. The development plan for a digit harbor involving a total investment of HK$14 billion has been launched. The plan will spur Hong Kong to become an international information science and technology center and help upgrade Hong Kong's high added value industries. The characteristic start-up board market has gone into operation, thus opening up new fund-raising channels for newly emerging science and technology enterprises. By the end of the second quarter of 1999, Hong Kong's economy had put an end to the negative growth that had persisted for five quarters and obtained a 1.1 percent growth, thus bringing Hong Kong onto the road of recovery.

It should be mentioned here that during Hong Kong's most hard time, the central government had never withdrawn its helping hands. The stability of the exchange rate of Renminbi had provided Hong Kong with a strong backing in overcoming the effect of the financial storm. One of the most important reason why tourism, a pillar industry that was the first to "wake up" from the financial storm, was that the inland areas relaxed control on the tourists visiting Hong Kong, thus increasing the number of travelers to Hong Kong.

'The Skies Clear Up After a Rain'?

Perhaps it would be too optimistic to say that the "skies have become clear after the aforesaid storm" for Hong Kong's economy, authoritative persons say that currently Hong Kong is at most in the stage that "the sky turns from being overcast to being cloudy" and that it still takes time to bring about an all-round revitalization.

Today, the motive force boosting Hong Kong's economic recovery mainly comes from export trade and tourism which rely on the effect of external factors, its internal demands are relatively sluggish, this determines that the region's economic reinvigoration has its feebleness and lagging. The unemployment rate remains high. The economic structure has not been fundamentally adjusted, the innovative scientific and technological industry and e-business, which are still in the initial stage, can hardly serve as a locomotive to boost Hong Kong's economic growth within a short period of time. These factors are the "obstacles" in the way for the future development of Hong Kong's economy, so they must not be neglected.

Hong Kong needs the industrial and business magnates present at the Fortune Global Forum to help it put its economic development on the right track.

Hong Kong listens carefully to the voice from the Fortune Forum.

(People's Daily 05/10/2001)

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