Tsang fears for exports; sees no growth

Exports could make or break Hong Kong’s economy this year. And the first quarter isn’t showing any signs for optimism.

There’s a good chance Hong Kong’s export-driven economy may contract in Q1 if exports fail to improve amid slowing global growth, Financial Secretary John Tsang said.

“I see a difficult year ahead for the global economy,” Tsang pointed out. “We may even see negative growth in the first quarter of this year if exports fail to pick up.”

Tsang pledged a US$10.3 billion stimulus in the fiscal year starting April via a series of fiscal measures such as tax rebates, waivers on homeowner taxes and aid for small businesses.

The weaker economy may cause the gross domestic product to rise slowly from between 1% to 3% this year, down from 5% in 2011, said the government. The economy grew 0.3% in Q4 compared to Q3.

On Feb. 1, the government announced an HK$80 billion package aimed at better preparing the “. . . people for the difficult times ahead.”

These one-off economic alleviation measures in the city’s 2012-13 budget includes:

• A corporate income tax rebate for 2011-2012.
• Waiving of property rates for 2012-2013.
• A personal income tax rebate of up to 75% for 2011/12 (capped at HK$12,000).
• A HK$1,800 electricity subsidy for residents.
• An increase of land supplies to ensure supply stability in the property market.
• Additional measures to support small to medium-sized companies.