With international investors’ confidence in Hong Kong‘s business environment shaken by Beijing‘s forced push of the Hong Kong National Security Law in Hong Kong and the impact of the Epidemic, Hong Kong’s economy is lighting up in the red, and the outside world expects the Hong Kong government to deliver a viable solution. Hong Kong’s fiscal deficit has reached a record high, according to the new Budget.
Hong Kong’s Financial Secretary Paul Chan Mo-po announced the Budget on Wednesday (24), expecting Hong Kong’s record-breaking deficit of HK$257.6 billion in 2020/21, double what he expected last year.
The deficit is at an all-Time high and will not be better in the next five years
Checking the information, this is the seventh time since the transfer of sovereignty in Hong Kong, the fiscal deficit, the highest fiscal deficit year for 2001/02, HK$ 63.3 billion, but are less than the latest announcement of HK$ 257.6 billion, four times that year.
The fiscal deficit climbed to a record high, Hong Kong Financial Secretary Paul Chan attributed to social movements and the epidemic.
Hong Kong has experienced several ups and downs in the past two years, with international political tensions damaging exports and market sentiment, violent shocks jeopardizing social stability and security, and the epidemic putting the entire society and economy under extra pressure,” said Mr. Chan. The SAR government has invested a total of nearly HK$300 billion in support, hoping to play a role in stabilizing the economy and relieving people’s hardship. However, this has also increased the fiscal deficit to the highest ever.”
Paul Chan also predicted that Hong Kong will still have a fiscal deficit in the next five years. The future economic situation is severe, the Budget also “tighten the belt”, the people’s relief measures are not good, attracted the pro-democracy camp and the pro-Beijing camp criticism.
Fiscal reserves fall below a trillion Hong Kong dollars and the economic environment is in danger
The fiscal deficit is at a record high, but what about the fiscal reserves? In the past, the Hong Kong government was proud of its fiscal reserves of over a trillion Hong Kong dollars, but in the latest Budget, it is expected that by March 31, 2021, Hong Kong’s fiscal reserves will be HK$902.7 billion, falling below a trillion. The fiscal reserves have dropped significantly from a level equivalent to 23 months of government spending to 13 months in two years.
Affected by the news, Hong Kong’s Hang Seng Index fell sharply by 3% on Wednesday (24), falling through 30,000 points.
“Northern water transfer” to save Hong Kong? Economic scholars: just use Hong Kong
Check the information, the past year, “north water” frequently surging Hong Kong, the Hong Kong Stock Exchange for the year, 154 new listings, mostly from China. And China has also been claiming in recent years, Hong Kong in 2003 after the SARS epidemic, is all thanks to China to open up the “free flow” of travel to Hong Kong, as well as and Hong Kong signed the “Mainland and Hong Kong on the establishment of closer economic and trade relations arrangements” (CEPA), to “north to south transfer of water “Now, 18 years later, is it time to do the same thing again?
Hong Kong economist Luo Jiacong said in an interview with this station, Hong Kong has lost the confidence of foreign investors because of political and rule of law issues, coupled with the U.S.-led sanctions against Hong Kong, Hong Kong’s “international financial center” status is no longer the same as it used to be, only to China. However, China’s economic growth has continued to decline in the past few years, the unemployment rate is high, it does not help Hong Kong out of the predicament, I am afraid that Hong Kong will only be reduced to the implementation of national political tasks tools.
Hong Kong used to be with the periphery recovery, you can get out of the predicament, but now such a pattern, slowly disconnected from the periphery, the whole situation only with the mainland, the mainland is now clearly going downhill. Free trade and the Greater Bay Area are only gradually penetrate the action, not Hong Kong begging for. In the SARS period to the present, Hong Kong’s recovery is to follow the recovery of the global economy, without the free flow of the same will recover. The Greater Bay Area is all about changing blood, making Hong Kong into Shenzhen, only for political purposes.”
He stressed that the year Hong Kong’s economic recovery after the SARS epidemic, the main reason is to follow the global economic rebound, rather than rely on China alone.
Hong Kong current affairs commentator Liu Ruishao told the station that Hong Kong’s shrinkage in the international market and dependence on China is a major mistake in strategy, describing the Budget as ostensibly a way out for Hong Kong, but in reality it is only for domestic policy needs, looking for external funding to use Hong Kong’s resources to build the Guangdong-Hong Kong-Macao Greater Bay Area, which is a key development in China, benefiting only a few large consortia and hardly reviving Hong Kong’s local economy.
Recent Comments