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Published: 18:07, November 19, 2023 | Updated: 18:15, November 19, 2023
Chan: HK to optimize its global position in APEC
By Zhou Jianxin in Hong Kong
Published:18:07, November 19, 2023 Updated:18:15, November 19, 2023 By Zhou Jianxin in Hong Kong

Financial Secretary Paul Chan Mo-po attends the Asia-Pacific Economic Cooperation Finance Ministers' Meeting (FMM) in San Francisco, United States on Nov 13, 2023. (PHOTO / HKSAR GOVERNMENT)

Many Asia-Pacific Economic Cooperation economies anticipate slower-than-expected growth next year, and Hong Kong, as an APEC member, stands to gain a better position in the evolving global landscape, giving full play to the city’s unique advantages, says Financial Secretary Paul Chan Mo-po.

Writing in his Sunday blog, Chan, who represented the special administrative region at the just-concluded APEC meetings in San Francisco, outlined six key observations he made during his weeklong trip to the United States, saying there’s a consensus among APEC economies that high interest rates would last longer.

“The global economy is poised to witness slower growth in 2024, compared to the current year, accompanied by increased risks on the downside,” he said. “The medium- to long-term outlook remains weak, with several countries potentially requiring a span of two to three years to reclaim the growth trajectory witnessed prior to the pandemic.”

There’s also wide recognition that, alongside the remarkable expansion of the economic pie, it’s crucial to ensure a fair and equitable distribution of the economic rewards. This inclusive approach has the potential to enable the people to share the benefits of economic progress

Chan said some APEC members are discussing strategies to raise tax revenues without compromising with investment and competitiveness. “It’s imperative not to underestimate the magnitude of the fiscal challenges that lie ahead.”

ALSO READ: Chan: President Xi cares a lot about Hong Kong

Central banks of the United States and Europe have, in recent years, implemented tighter monetary policies to address soaring inflation rates. Many economies had no choice, but to follow. Consequently, stimulating economic growth through loose monetary strategies in the near term has become an arduous task. Adding to the predicament, the substantial public expenditures allocated to address the wide-ranging effects of the COVID-19 pandemic have left many economies grappling with extensive deficits and mounting government debt. Chan said such circumstances have severely constrained the fiscal space available for maneuvering.

“The resilience of both the economic and financial systems has grown increasingly vulnerable within this context, and there’s a pressing need to reconstruct the buffer space to ensure the ability to withstand any potential repercussions that may arise from unforeseen events,” he said.

Meanwhile, the scope for making fiscal adjustments in crucial areas of expenditure, such as social welfare and healthcare, is limited, as the aging population contributes to rising expenditure and declining tax revenues. Moreover, tackling the complex challenges of climate change and securing investments in infrastructure demand substantial financial resources.

Chan said the summit between the leaders of China and the US during the APEC conference became a global focus. “The growth of the Chinese economy and its impact on the global economy were also issues of great concern among APEC members.” He believes that the significance of the China-US relationship extends far beyond mere political and economic considerations, and will have a profound influence on the rise and fall trajectory of the global economy as a whole.

READ MORE: Chan underscores HK's role in global green progress at APEC

The financial chief also noted that a number of APEC economies expressed support for the reestablishment of a rules-based multilateral trading system. Political and business leaders emphasized the pressing need to revise regulations in response to the rapid progress made in the digital economy, e-commerce, and other relevant sectors.

There’s also wide recognition that, alongside the remarkable expansion of the economic pie, it’s crucial to ensure a fair and equitable distribution of the economic rewards. This inclusive approach has the potential to enable the people to share the benefits of economic progress.

“Through active participation in these conferences and exchanges, we have strengthened our comprehensive understanding of international political and economic landscapes, while keeping abreast of the latest developments,” Chan said. “We firmly believe that Hong Kong, as a free, open and small economy, is well-positioned to establish clearer strategies and chart its own path for development under the ‘one country, two systems’ principle’.”


zhoujianxin@chinadailyhk.com

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