Hong Kong 's Tsang sees growth , smooth transition .
Mark Trevelyan
WELLINGTON 1996-08-29
Hong Kong Financial Secretary Donald Tsang said on Thursday he expected the territory 's economy to keep growing at around five percent but with some fluctuations from year to year .
Tsang , who made the remarks during a visit to New Zealand , also spoke strongly in favour of keeping the Hong Kong dollar pegged to its U.S. counterpart , and said negotiations with China on next year 's budget were going smoothly .
Hong Kong 's economy grew by only 3.1 percent in the first quarter , down from 5.9 percent a year earlier , and some private sector economists have revised downwards their predictions for the 1996 year .
Second quarter growth estimates will be released when the Hong Kong government issues its half-yearly economic report on Friday .
" Our trend growth rate of five percent in real terms is pretty solid , " Tsang told a news conference after meeting New Zealand Finance Minister Bill Birch .
" There will be fluctuations in individual years , but it wo n't be a big margin , " he said .
He said inflation was under control and the Hong Kong dollar was " rock solid " .
Its link to the U.S. dollar had proved an engine of growth for the past 12 years .
" There 's absolutely no economic or financial or political reason for us to change .
A lot of investment in Hong Kong , some of which ( is ) by China , is predicated on the link continuing . "
Britain will hand over Hong Kong to Chinese sovereignty at midnight on June 30 , 1997 .
Tsang said three sets of meetings with Chinese authorities on Hong Kong 's 1997-98 budget , which will span the transition period , had gone smoothly . "
None of our basic precepts have been challenged . "
Hong Kong will retain its own currency after the handover , run its own financial and monetary policy and have control over its own foreign exchange reserves .
It will have no duty to contribute any taxes to Beijing , Tsang said .
He described the condition of the property market as " very good indeed " .
" You know , we went through a little climb and a little trough over the last few years .
Because of speculation in the market we introduced certain measures , but they are not draconian measures , and we brought it down to earth . "
Tsang said the market would continue to appreciate because property and land were scarce .
The government would put land on the market to stop rentals " going through the roof " , but this would mean reclamation , with possible environmental problems .
" There will be on the whole a slightly upward climb , consistent with our economic growth rate , " he said in reference to the property market .
Tsang , the third senior figure in the government after the governor and chief secretary , said his stated aim was to serve as financial secretary for two years under British rule and three years under China .