HK'S Tung expected to focus on environment
Date: 07-Oct-99
Country: CHINA
The address, starting at 1430 local (0630 GMT), is his third major
policy speech since this former British colony reverted to China in July
1997.
"He will probably concentrate on environmental issues today because as
far as reviving the economy is concerned there really isn't much the
government can do now," James Tien, head of the pro-business Liberal
Party, said in a radio interview.
Hong Kong, caught up in Asia's two-year economic crisis, has been
showing signs of recovery but the pace is slow and the government has
said it will be a long process.
With bad news bountiful on the business front, Tien expected Tung to shy
from saying too much on the economy, having already said he believes the
worst is over.
"We have deflation at six percent while bank interest rates are still
around eight percent, so the real cost of interest is like 14 percent,"
Tien said. "It's very tough for businesses to be profitable.
"Realistically we could only see restraining wages not more
increases...with not so much good news on the economic side, I think he
will shy from that and most of the discussion today probably will focus
on the environment," he added.
Hong Kong posted modest growth of 0.7 percent in the second quarter of
1999, compared to the year-ago period - the first positive note after
five consecutive negative quarterly figures.
Tung's administration is forecasting 1999 growth of 0.5 percent after
negative 5.1 percent in 1998. But an array of indicators show the
territory's hard times are unlikely to be over any time soon.
Unemployment remains stubbornly high at 6.1 percent and the Composite
Consumer Price Index contracted by 6.1 percent in August year-on-year.
More than 50 percent of respondents to an opinion poll this week said
Tung should focus on economic development or employment issues.
The survey by the University of Hong Kong showed almost 20 percent of
those polled saying issues such as housing, social welfare and education
should be the focus of the speech.
"People are very concerned about the economic situation so I would urge
strongly that Tung try to put forward plans to stimulate growth," said
Yeung Sum of the de facto opposition Democratic Party.
But few political commentators expect Tung to follow the advice.
