Before the announcement of Hong Kong‘s Budget, Financial Secretary Paul Chan has publicly “cried poverty”, leaking that he wants to cut the welfare of Hong Kong people, or even raise taxes or introduce new taxes.
The annual Budget of the Hong Kong government will be announced soon. Although the Epidemic has plunged Hong Kong’s economy to the bottom and all industries are struggling, Financial Secretary Paul Chan has openly “cried poverty” and announced that he wants to cut Hong Kong people’s welfare, and even raise taxes or introduce new taxes. But the media revealed the truth behind Hong Kong’s “financial difficulties”, but the Hong Kong Government’s foreign exchange fund assets of up to 4.5 trillion Hong Kong dollars, ranking eighth in the world, per capita reserves are high in the world’s second, the world’s most abundant financial reserves of the city.
Some experts analyze that behind the Hong Kong government’s “money guard”, or reflect the Chinese Communist Party‘s full governance of Hong Kong, the fiscal reserves of Hong Kong as a pocket, not only will not hand out money to relief the public, but also to “absorb all the Hong Kong capital”, will be taxed to Hong Kong people to push the valley reserves back up. At the same Time, the Chinese Communist Party has adopted the policy of “people leave, money stays”, and even the offshore bank accounts of Hong Kong people are no longer safe. How to “leave people and money together” has become the most urgent problem for the rich people in Hong Kong.
The Hong Kong government has released the wind under the economic recession to reduce welfare and taxation
The global pandemic has plunged Hong Kong’s economy into recession, and the government’s measures such as the “gathering restriction” and restrictions on restaurant operations have plunged many industries into hardship, with the unemployment rate climbing to a 16-year high of 6.6%. In the face of this unprecedented hardship, the people of Hong Kong are looking forward to the relief and welfare measures to be announced in the Budget on February 24.
However, Financial Secretary Paul Chan Mo-po, in an interview at the end of January, had already “cried poverty” in advance, saying that the fiscal reserves had been reduced from more than $1 trillion to more than $800 billion in the past year due to the introduction of the “Prevention and Anti-epidemic Fund”, and that the fiscal deficit was expected to worsen. Paul Chan then wrote an article in the weblog, under the pretext that “some people” suggested that the government should reduce welfare measures, and proposed “to increase tax rates, introduce new taxes, and broaden the tax base”.
Sure enough, on the eve of the “Budget”, the pro-Beijing Hong Kong media “Sing Tao Daily” released on February 22 that the “Budget” will reduce “handing out candies”, will not hand out cash relief, but also abolish the public housing rent-free month measures to help the grassroots, tax rebates, CSSA out of “double Food “and other measures such as the amount of relief will also be reduced; also quoted Paul Chan on Sunday in the weblog that, in the face of the fiscal deficit rose to a record high, the reality to “look at the ? food” (depending on the situation to do), inevitably limited choice.
The truth about “financial distress”: the hidden 4.5 trillion foreign exchange fund assets
Hong Kong government officials are trying to render Hong Kong’s financial difficulties serious, but the actual data reflects another truth.
Apple Daily recently quoted the Hong Kong Monetary Authority figures that, as of December 31, 2020, the Hong Kong Government Exchange Fund assets totaled 4.5 trillion Hong Kong dollars (about $580 billion), of which the monetary base and bank balances accounted for more than 50% of the total. The remaining three major sums totaling $2 trillion are: $881.8 billion in “fiscal reserves” (i.e., the government’s fiscal reserves); $342.4 billion in “deposits with funds and statutory bodies” of the Hong Kong government; and $852.4 billion in “accumulated surplus” of the Exchange Fund. “accumulated surplus”.
The Apple again cites World Bank statistics, which show that Hong Kong’s reserves of more than $4 trillion rank eighth in the world, 1.96 times those of Germany, 2.33 times those of France, and 2.54 times those of the United Kingdom, based on global fiscal reserves in 2019. When population is taken into account, Hong Kong’s reserves per capita are US$58,788, ranking second in the world after Switzerland’s US$99,705 and higher than Singapore’s US$50,052.
The Chinese Communist Party is eyeing Hong Kong’s foreign exchange reserves as its own
In other words, Hong Kong is actually the city with the most abundant financial reserves in the world. So what is the truth behind the “wealth master” ignoring the people’s plight and instead proposing welfare cuts and tax increases? In a recent interview with Look at China, Hong Kong economist Eric Lo offered his analysis.
Hong Kong economist Eric Lo (Photo credit: Zhou Xiuwen/Watch China)
In the past year, Hong Kong’s fiscal reserves were reduced by $304.4 billion, of which one quarter was spent on handing out $10,000 to each Hong Kong citizen. Lo Ka Chung pointed out that at that time, Hong Kong’s unemployment rate was still at a low level, and the Hong Kong government did spend money too casually, “thought to learn from Macau to maintain stability, but can not do to maintain stability, and can not buy popularity.” But Hong Kong’s reserves plummeted caused the attention of the Chinese Communist Party, “the Chinese Communist Party saw the water level fell so quickly, the gang and focus on Hong Kong’s foreign exchange reserves, of course, will not give you (Hong Kong people). It thinks the foreign exchange reserves are its, not yours, it thinks the money is all its. In this case, of course, to those Hong Kong officials to get a good deficit, pushing up that water level, and even to break the top.”
Or force the Hong Kong government to raise taxes wildly rich civilians are also hostage
How to push up the reserves? Luo Jiacong pointed out that the practice is very simple, is not to send any welfare relief, may also in turn wildly increase taxes, the part that has been “squandered”, from the people’s money back, “now the Legislative Council, it is easy to pass, what he wants to open the tax can be said to do whatever you want, you can’t help him! The company’s main goal is to provide a better solution to the problem. Luo Jiacong said, in such an environment, Hong Kong’s rich people are certainly being held hostage, even the poor may also be “open” as taxation, “I guess he must go this way.”
As to whether Hong Kong’s foreign exchange reserves will be directly taken away by the Chinese Communist Party? The government has now been completely played by them, it is very easy to take away your money, and it is not your money to put here, only it knows. If the foreign exchange is the U.S. dollar, it will not give you (the Hong Kong government) to move.”
The Chinese Communist Party wants “people to leave money behind” offshore accounts are not safe
With the National Security Law hanging over their heads, Hong Kong people facing “communism” are emigrating and transferring their money. Recently, it is rumored that the Chinese Communist Party wants to restrict Hong Kong people to travel by means of transportation, disguised as restrictions on leaving the country, which is said to prevent “people leaving and money leaving”. However, Luo Jia Cong believes that the policy should mainly target those who organize social movements, and that they should be charged and forbidden to leave. But for the majority of Hong Kong people, he believes that the Chinese Communist Party does not care much whether they leave or not, and even wants them to leave quickly, “It often talks about the Greater Bay Area, which is like wanting Hong Kong people to leave, as if they were banished to the frontier or Siberia.” But let Hong Kong people leave, provided that the money stays, “it wants this.”
Of course, who would be stupid enough not to transfer the money overseas first? But recently it has been rumored that the Hong Kong police investigating the National Security Law arrested person, asked HSBC to freeze his overseas offshore account. The only way for Hong Kong’s wealthy to leave is to find ways to “leave with their money” to a place where the Communist Party cannot extradite them, to a place where the banking system is completely unconnected to Hong Kong, and “it’s not hard to predict that these things will happen soon,” said Law. “
Luo Jiacong said there are still ways for Hong Kong people’s money to leave, but if it does not go far enough and skim off, it is easy to be “caught in the tail”. But as long as the funds are placed in a bank that has nothing to do with Hong Kong, there is nothing the Chinese Communist Party can do about it, unless they send someone to forcibly take them back. In fact, with so many Hong Kong people leaving, it is impossible for the Chinese Communist Party to kidnap them all, nor will it do so.
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