The world financial meltdown is worse than the 1997 Asian financial crisis and will take a far bigger toll on the global economy, Hong Kong’s leader said yesterday.
“Its destructive force is much stronger and more widespread than the Asian financial turmoil,” Chief Executive Donald Tsang (曾蔭權) said in a policy address.
“The recovery will take longer, be more difficult and certainly cannot be taken lightly,” he said, adding that “the worst is yet to pass.”
While better positioned to weather a global slump, Hong Kong’s economy won’t come out unscathed, he said.
The local economy grew at a slower-than-expected 4.2 percent pace in the second quarter, posting its first quarter-on-quarter decline in years.
“We expect the economy to slow further,” said Tsang, who was elected to a five-year term last year. “As a small, open economy and a global financial center, Hong Kong is not immune to the impact of this financial tsunami.”
Tsang said he would set up and head a task force of government officials, industry experts and economists to monitor international markets and devise ways to bolster the government and local businesses.
The move comes a day after Hong Kong announced extra measures to further support the banking system.
Also, Tsang pressed banks to respond within a week to a government proposal under which local banks and other sellers of Lehman Brothers-backed bonds would buy them back from investors.
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