Tung Vows to Restore Confidence in Property Market

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Last updated at: (Beijing Time) Thursday, November 14, 2002

Tung Vows to Restore Confidence in Property Market

Hong Kong Chief Executive Tung Chee Hwa vowed to take resolute steps to restore confidence in the property market in a bid to restructure the local economy.

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Hong Kong Chief Executive Tung Chee Hwa vowed to take resolute steps to restore confidence in the property market in a bid to restructure the local economy.

Tung told a media session on housing policy at the Central Government Offices Wednesday afternoon, saying that the property market forms a very important part of Hong Kong's economy and the government takes the healthy development of the property market very seriously.

In the past five years, Hong Kong has faced unprecedented economic challenges, Tung said. "Though we have successfully overcome the Asian financial turmoil, we still have a long way to go to bring the economy out of the doldrums," he added.

"We must do our best to facilitate economic restructuring, to improve our business environment and to maximize our growth potential by exploiting the close economic relationship between Hong Kong and the Mainland in order to speed up the economic recovery," Tung stressed.

Tung said, as a major hurdle to economic recovery, Hong Kong's cumulative deflation rate has reached 13 percent over the past four years. Deflation severely dampened people's desire to spend, to consume, or the investors' desire to invest and has caused serious damage to government revenue and has stifled Hong Kong's growth.

A major cause of the persistent deflation is the estimated 65 percent drop in property prices or rental since the bursting of the bubble economy, he said.

According to an economist's assessment, 50 percent to 60 percent of Hong Kong's deflation is attributable to the continuing fall of the property market.

To break this vicious downward spiral, Tung said the government will take resolute measures to stabilize the property prices and the property market, to restore public confidence in property ownership, and to speed up the recovery of economy.

Later Wednesday afternoon, Secretary for Housing, Planning and Lands Michael Suen announced before the Legislature a series of measures aimed at stabilizing the property prices. These measures will also include ways and means to continue to provide housing or housing assistance to those who are really in need.

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