From crisis to opportunity (hktdc.com)


	Chief Executive Donald Tsang promises to rise above all challenges in his policy address

The global financial turmoil presents new opportunities for Hong Kong to enhance its competitiveness. That was the message in Hong Kong Chief Executive Donald Tsang's policy address last month.

"Although the current financial tsunami has not caused systemic damage to our financial market, we will not underestimate the impact, nor flinch from meeting the challenges, nor rest on our laurels," Mr Tsang said. "Sharing a common vision, we can rise above all challenges and emerge stronger."

Amid an ongoing overhaul of the world's financial systems, the Chief Executive pledged to reinforce Hong Kong's status as a global financial centre, through enhanced banking supervision, tightened regulation of fund managers, setting up an independent Insurance Authority and increased efforts to broaden the scope of stock exchange listings.

Cash protected

The government last month moved to boost confidence in the Hong Kong banking sector by providing blanket coverage for all Hong Kong bank deposits. It also set up a contingent bank capital facility for financial institutions in need. The latest measures, effective for two years, followed earlier moves by the Hong Kong Monetary Authority to ensure adequate liquidity in the local banking system.

As Hong Kong Financial Secretary John Tsang noted: "The banking sector plays a pivotal role in our financial activities, and confidence is the cornerstone in preserving banking stability."

In his October policy speech, the Chief Executive said that the government's role is to formulate policies conducive to market competition. "When the market fails, however, the government should be prepared to intervene in a timely and decisive manner."

The Chief Executive will head a government task force of economists, business and finance leaders and officials. The task force will assess the impact of the financial crisis on Hong Kong's economy, and propose specific options to address the challenges. "This will help us overcome the crisis, turn it into new business opportunities and enhance our competitiveness," Mr Tsang said.

Infrastructure proceeding

The financial crisis will not affect Hong Kong's major infrastructure projects, which are worth more than US$7.7 billion and proceeding as planned. The government, Mr Tsang added, would also take the lead in building a Hong Kong-Shenzhen metropolis and strengthening cooperation with Guangdong. These would be achieved by promoting cooperation in service industries, working with Guangdong to upgrade industrial infrastructure, facilitating cross-boundary environmental protection to create a green area in the Pearl River Delta Region, and strengthening coordination and planning of cross-boundary infrastructure projects.

The government is also set to discuss the third-phase expansion of the Hong Kong Convention and Exhibition Centre (HKCEC) with the Hong Kong Trade Development Council (HKTDC).

Boost for SMEs

HKTDC Chairman Jack So welcomed the government's intention. "Trade remains an important pillar of Hong Kong's economy, particularly amid the current financial turmoil," Mr So said. "A further expanded HKCEC would allow more SMEs to promote their products and services to international buyers at trade fairs."

Another measure to boost trade is through enhanced cooperation with Taiwan. A new HKTDC office will open soon in Taipei, following approval from Taiwan authorities. The representative office in the island, Hong Kong's fourth-largest trade partner, will promote closer economic ties between Hong Kong and Taiwan and explore new commercial opportunities.