Crisis may demand govt intervention
Updated: 2009-04-18 07:48
By Joyce Woo(HK Edition)
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HONG KONG: The Hong Kong government has warned it will intervene in financial markets if necessary. Friday Chief Executive Donald Tsang was speaking before the 2009 Boao Forum for Asia, whose theme this year is "Asia: Managing Beyond Crisis". The event is being held on Hainan Island.
Tsang said the "big market, small government" principle that the government has been following might prove ineffective tackling the depth of the global economic crisis.
He noted that the Irish government's earlier decision to guarantee every dollar of deposits at Irish-owned banks prompted places like Hong Kong to follow suit. Although some might regard this as a form of market intervention, he said, it was necessary to safeguard bank deposits and guarantee Hong Kong's place as a financial hub.
He emphasized the government would intervene only to protect the public interest.
Tsang met with Chinese General Chamber of Commerce Chairman Ian Fok Chun-wan and Hong Kong Trade Development Council Chairman Jack So Chak-kwong at a cocktail reception last night.
He is expected to meet with Premier Wen Jiabao, who will deliver a keynote speech at the forum, Saturday.
Tsang said that 2009 is going to be a difficult year for Hong Kong, with the city expected to suffer a 2 to 3 percent economic contraction, according to the latest budget.
He maintains that the Hong Kong government need not follow Macao's footsteps in giving cash handouts to its citizens, saying: "Macao has its way of dealing with the economic crisis; Hong Kong has its own way."
Macao's chief executive Thursday announced a three billion patacas cash giveaway, including 6,000 patacas for each permanent resident. The handout was among relief measures, announced during a legislative question-and-answer session.
Macao's move comes at a time when the Hong Kong government appears to be under pressure over a budget criticized for offering insufficient relief amid the economic crisis.
Other government officials also expected to attend the Boao forum include Director of the Chief Executive's Office Norman Chan Tak-lam and Senior Special Assistant to the Chief Executive Chan Kin-ping.
(HK Edition 04/18/2009 page1)