Chamber Welcomes Business Initiatives
In 2001-2002 Budget Proposals
Cautious Budget approach is right for the times

The Hong Kong General Chamber of Commerce (HKGCC) today welcomed the business proposals contained in the Financial Secretary's sixth and final Budget before assuming the Chief Secretary's role.

In particular, HKGCC cited the recognition by the government of the need to support Hong Kong companies in taking advantage of the opportunities emerging from China's imminent entry to the WTO and the opening of the country's Western region.

HKGCC conducted two trade missions to the West last year and believes the opportunities there are potentially large. Government support should enable more local companies to take advantage of them. More information and assistance for Hong Kong SMEs doing business in China are also good news for many SMEs here concerned about their competitiveness on the mainland after China gets into the WTO.

HKGCC also believes that the decision to allow more Mainland professionals to enter and work in the Hong Kong SAR—long advocated by HKGCC, provided they are appropriately qualified, should also help local companies secure needed talent, especially in information technology.

The proposed $300 million training fund for SMEs is also a positive initiative for the largest segment of corporate Hong Kong, HKGCC believes.

HKGCC's Director, Dr Eden Y Woon, said the Budget was largely in line with the modest expectations encouraged ahead of it, even by the Financial Secretary himself.

"If there was one disappointing aspect of the revenue side, it was the decision to increase the air departure tax by $30 to $80 at time when the tourism industry has recovered in terms of tourist numbers but not overall revenues."

Looking at the Budget from a macro-economic level, Dr Woon said the estimated deficits of $11.4 billion for the current 2000-2001 financial year and the projected $3 billion deficit for 2001-2002 were within expectations.

Dr Woon said the Financial Secretary's prediction of 4 per cent real growth in Gross Domestic Product (GDP) in the 2001 calendar year was in line with private sector forecasts and could prove to be conservative.

"We also welcome the Financial Secretary's decision to leave Profits and Salaries tax rates alone at a time when corporate profits are still recovering and a large part of the workforce is still feeling the remnants of the negative effects of the economic downturn," he said.

HKGCC feels that the Financial Secretary also struck a positive note in holding off on any new taxes, including land and sea departure tax, green taxes and, of course, any sales tax until the committees examining Government revenue needs report.

For further information, contact Dr Eden Woon on 2823-1211.