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Financial Secretary

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To unite and move forward

The Hong Kong economy is consolidating at a relatively low level. In Q3, the real GDP contracted by 3.5%, narrowed from 9% in Q2 and ending the five consecutive quarters of decline. For the first three quarters of this year, the economy has recorded a negative growth of 7.2%. We have adjusted our economic forecast of 2020 from a negative growth of 6-8% to a negative growth of 6.1%. As the economy is entering a phase of consolidation, it is expected that the unemployment rate in October would face less pressure to rise further. However, with the recent resurgence of COVID-19 epidemic in Hong Kong and the consequential tightening up of social distancing measures, the economy will possibly come under stress again if the situation persists. In view of this, we have to remain vigilant and respond in a cautious manner.

The unpredictable epidemic and the related restrictive and control measures are the most crucial factors affecting our economic performance this year. To prevent further damage to the economy caused by the epidemic, we have to formulate a set of comprehensive and effective response plan. As a small and open economy, Hong Kong relies on its connections with people and commercial activities outside Hong Kong to support the economy. While the Europe and US are still struggling with the epidemic, the Mainland, in contrast, has effectively brought the epidemic under control with its economy already regaining momentum. It is of utmost importance for Hong Kong to tackle the epidemic properly, so that people in Hong Kong and the Mainland can feel at ease to resume the flow of people between the two places as soon as possible. As this is the key to stabilise Hong Kong’s economy, we need to have determination in reviewing our strategy and measures in handling the epidemic.

We should set our target as “strictly preventing imported cases and striving for zero local cases”. In fact, many COVID-19 cases reported in Hong Kong are related to imported cases. We therefore have to implement stringent measures targeting arrival passengers. A more comprehensive approach in the collection of specimens, quarantine at specified locations, as well as tracing of contacts are necessary.

Domestically, we should set a target of having zero local cases. As some infected persons may not show any symptom, the threat of hidden chain of infection still exists in the community. In view of this, when small-scale group outbreak or continuous sporadic cases occur, we may need to carry out mandatory testing programme of a wider coverage with a view to identifying all infected persons and break the chains of infection. Only by doing so, a safe environment could be restored to allow normal living and travel.

Some may consider mandatory testing not practicable. But the reality is that a persistent outbreak is not good for our economy, businesses and people’s livelihood. We have to make difficult choices. Having all the cases cleared will offer the greatest protection to most people’s health and interests. Even if mandatory testing would bring some inconveniences to people, it is still the most “cost-effective” option amongst others as we can create a safe space for living with relatively small disturbance to the community.

Once locking on the target, we could unite and handle the challenges together. There are many solutions for every problem. Yet in a pluralistic society, there hardly can be a perfect solution for all. In reality, we can only choose a solution which better suits the overall interest of the society. And we need determination in the implementation in order to achieve the best result. As seen from other examples in overseas countries, tightening and loosening the anti-epidemic strategy alternately cannot facilitate economic recovery. Neither can this achieve an effective and long-lasting effect in curbing the epidemic, impacting the health and livelihood of people.

In fact, Hong Kong has fallen into political turmoil over a period of time. The violent and illegal acts have even paralysed the operation of the Legislative Council (LegCo), hindering the development of Hong Kong in many aspects. The handling of routine issues has become very difficult, not to mention deriving plans for future development. Political quarrels and violent acts in the society have also led to strained relationships in many families.

The latest decision made by the Standing Committee of the National People’s Congress (the decision) on the qualification of members of the LegCo of the Hong Kong Special Administrative Region (HKSAR) has established a legal framework for Hong Kong’s institutional development, ensuring public servants to hold allegiance to the Country and HKSAR and plugging the loopholes in the implementation of the “One Country, Two Systems” principle in Hong Kong. The “One Country, Two Systems”principle is the corner stone for Hong Kong’s prosperity and stability. We have to safeguard the bottom line of the “One Country” principle and keep the operation of the “Two Systems” on the right track, so as to ensure Hong Kong’s stable and continuous development. The decision and the National Security Law share the same spirit and together they provide the anchoring effect for Hong Kong’s stability and smooth development. Over the past year or so, Hong Kong has been hard hit by violent acts and the epidemic, leading to tremendous stress on the economy and people’s livelihood. The decision could bring the LegCo back to the right track and provide the room and possibility for the government to boost the economy, improve people’s livelihood, and address other deep-seated problems.

The Mainland has curbed the epidemic effectively. Although its economy was under stress earlier this year, it has regained strength quickly. According to the latest estimate of the International Monetary Fund, China would be the only major economy that could see a positive economic growth this year. Its rate of growth is expected to be 1.9% this year and accelerate to 8.2% by next year. Last month, the Fifth Plenary Session of the Central Committee approved the proposals for the "14th Five-Year Plan and 2035 Long-Range Objective”, which outline the major direction for the Country’s future development and provide enormous opportunities for Hong Kong’s future development. At this historical new phase, if we could rightly position ourselves and participate in the national development plans more proactively, Hong Kong would enter a new era of development.

November 15, 2020


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