Blog

To progress steadily with determination and confidence

The pandemic situation has been fluctuating in the past year and posed uncertainties and continuing challenges to global economic recovery. Nonetheless, the Hong Kong economy still achieved an annual growth of 6.4% last year, which reversed the recession recorded in the previous two consecutive years. At the same time, our financial institution had been able to maintain stable operation and achieved sound development. The International Monetary Fund (IMF) Staff Mission has just completed its regular assessment on Hong Kong and published a report last week, which expressed compliment on our economic achievement last year and reiterated its recognition on Hong Kong’s status as a major international financial centre. The IMF also pointed out that Hong Kong’s financial sector had continued to expand under a robust supervisory framework even during the pandemic. Our Link Exchange Rate System continued to operate smoothly and demonstrate resilience, providing effective support to Hong Kong’s financial stability.

We have always been dedicating effort to explore and create more development opportunities and spaces while taking full precautionary actions at the same time. As progress and stability are equally important, we have to aim for an all-front development and safeguard the stability of our economy and the financial market. Only by doing so, we could keep moving forward steadily under an ever changing environment.

Hong Kong’s robust development has been relying on the concerted and dedicated effort of the whole community to promote economic development and comply with our supervisory requirements. With the long established and effective supervisory framework, we have been able to sail along the direction of “pursuing progress under stability and promoting stability with development” for years, which has gained the recognition of international organisations.

In face of the complicated and ever changing global political and economic environment, as well as the impact brought by the fluctuating pandemic, while our economic environment may keep a generally positive tone this year, still we have to stay vigilant and pay extra attention. In particular, as the virus has kept evolving new variants, we could not underestimate its possible impact. As such, the whole community has to come together and join hands in fighting against the virus with a view to achieving the target of dynamic clearing of case. Only by doing so, we could actively safeguard people’s normal living and travel, as well as the stable operating environment for businesses to the largest extent, which is also crucial for safeguarding the overall social and economic stability.

To promote economic recovery, the key is to curb the virus with our best effort. Social distancing measures have been retightened up recently, which will inevitably affect people’s daily lives and the operation of businesses. Nonetheless, only by bringing the virus under control could we minimise its social and economic impacts. I would like to appeal everyone to join us in our anti-virus work, including complying with the compulsory testing requirements and encouraging your friends and families to get the jab.

As the anti-virus measures will bring greater pressure on some sectors, the Government has recently launched the fifth round of supporting measures through the Anti-epidemic Fund (AEF). Apart from the five rounds of AEF measures, I also rolled out series of countercyclical measures with a scale of over $100 billion in my Budget over the last two years, including Government fee waivers, tax and rate rebates, the electronic consumption voucher scheme, the 100% loan guarantee for SME and individuals. These measures had deployed resources in a way to achieve leveraging effects in order to alleviate the impacts and pressures induced on people and enterprises due to the economic downturn.

In fact, to cope with economic downturn, the large-scale countercyclical measures covered in the Budgets over the last two years has led to a relatively high level of deficits and a sharp decrease in our fiscal reserve. Although some may have concern over this situation, the Hong Kong economy has always been enjoying a high degree of resilience and flexibility. Taking last year’s situation as an example. As long as the pandemic was kept under control and the Mainland and external economic environment stayed positive, with the concerted hard work of the whole community, the Hong Kong economy had seen a robust economic rebound, which provided support to Government revenue which in turn greatly improved the fiscal situation of this soon ending financial year.

In face of this once-in-a-century pandemic, there is a need for us to roll out countercyclical measures to stabilise the economy and people’s confidence. This is echoed by the IMF, which recognised the effectiveness of SAR Government’s swift and decisive fiscal policies and measures in providing buffers to the economy under pressure and supporting its gradual recovery.

We have received many different views in the few dozens of consultation sessions conducted for the Budget. Many agreed that the upcoming Budget has to strike a careful balance. While supporting those affected by the pandemic, we should also make efforts in promoting economic development and improving people’s livelihoods. While safeguarding financial stability and promoting development, at the same time we should also promote an inclusive and sustainable economic development, and be vigilant to the complicated and ever changing situation in both internal and external environment. With the electoral system successfully improved to implement the “patriots administering Hong Kong” principle, Hong Kong has entered into a new era and new phase which we can enjoy a more favourable environment to promote economic development in full steam and expedite our work in handling the problems accumulated over the years.

23 January, 2022