Following is a summary of major news and comments in the Hong Kong Economic Journal, the parent publication of EJ Insight, on Thursday, Feb. 27:
Hong Kong may see structural deficit by 2021
Hong Kong may experience a structural deficit in the fiscal account in seven years, Financial Secretary John Tsang warned as he delivered the latest budget policy speech Wednesday. Tsang said the government should take a long-term view and establish a future fund to prepare for the structural deficit that is likely to come by 2021, given an aging population and slowing economic growth. Details about the set-up of the future fund will be announced next week.
Govt eyes fresh batch of iBonds worth up to HK$10 billion in June
The Hong Kong government is planning to issue a new batch of three-year iBonds worth as much as HK$10 billion (US$1.29 billion) in June, marking the fourth issuance of the counter-inflation instrument, Financial Secretary John Tsang said. The iBond is likely to bear a coupon rate of at least 4 percent per annum, given an estimated 4.6 percent inflation rate this year, analysts said. The iBond is expected draw warm response as the present saving interest rate remains at a very low level while the instrument guarantees the principal plus a return that matches inflation level of the previous six months.
Land sales for next fiscal year seen to top HK$70 billion
The government has pledged to supply 34 land parcels that could build about 15,500 new home units in the fiscal year starting April, generating HK$70 billion in revenue, Financial Secretary John Tsang said. The supply could top 18,800 units, taking into account other sources in the market, Tsang noted, adding that the government expects this year’s land sales to bring in HK$84.1 billion, more than the original estimate of HK$64 billion. However, it has missed this year’s target to provide 20,000 new homes, by about 2,000 units, amid a slower pace in the launch of railway-linked residential projects.
Ming Pao offers HK$1 million for information on attack against editor Lau
The Chinese-language Ming Pao last night offered a HK$1 million reward for information that could lead to the arrest of the culprits in the brutal attack on former chief editor Kevin Lau, who remained in critical condition after being attacked by unidentified assailants in the morning. Chief Executive Leung Chun-ying joined media groups and political parties to condemn the attack. Some legislators speculated the attack might be related to the newspaper’s report about corruption in the top echelons of the Chinese Communist Party.
Bigger economic pie key to solve structural deficit
Hong Kong faces a real risk of deficits in view of the growing pressure on spending and the difficulties in raising new tax revenues. The setting up of a “future fund”, whose details are still unclear, to keep savings for spending in the future is only a passive way to tackle the problem of structural deficit. Clearly, the ultimate solution is to make the economic pie bigger by boosting productivity and exploring new engines of growth.
Attack on Ming Pao editor raises questions about China factor
There is yet no evidence to show who is behind the brutal attack against Ming Pao editor Kevin Lau. But similar incidents in the past two years seem to have raised a question of whether there is a mainland China factor behind them, writes former HKEJ chief editor Joseph Lian. It was not long ago that Ming Pao ran a series of investigative stories together with an international journalists’ organization about corruption involving princelings of the Chinese Communist Party. We may make an assumption that someone may want to stop him from leaking more information by using violence.
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