Hong Kong’s economy to shrink by more than a quarter, economy minister says
Hong Kong, Taiwan and Macau will see their economies shrink by between one and three quarters as a result of the impact of the global financial crisis, Hong Kong Finance Minister Michael Chu said Tuesday.
Chu, a former U.S. Treasury secretary who is also Taiwan’s Finance Minister, said the economy was “about to lose almost one third of its GDP.”
Chu said China’s trade surplus with Taiwan will grow by a quarter of a trillion dollars this year as the Chinese economy recovers.
Chu also warned that the economy will continue to shrink as long as it does not address its “core problem of rising debt.”
He said China should not wait for the world’s other major economies to step up and step up on its own.
“We will not allow the world to do that, because if China does not have a plan to address the core problem of its debt and economic growth, then it will be in serious trouble,” Chu said.
Chu said he believes the Chinese government is preparing to introduce a “negative gearing” scheme to help reduce its debt.
China’s top economic planner said China will introduce a negative-interest rate policy, which means banks will be able to lend money at higher rates than what they are permitted to lend.
But Chu said it is unclear whether the new policy will affect the existing loans already made by banks.
Chu was speaking at the Asia-Pacific Economic Cooperation summit in Laos.
China has imposed an “anti-financial-crisis” measure, which has been blamed for a slowdown in China’s economy.
Chu says that China is in a “very delicate situation” because it has no way to reduce its public debt and its trade surplus.
Chu is a close ally of President Xi Jinping, who has taken a tough stance on Beijing over the issue of Taiwan.
The U.N. Human Rights Council is expected to vote this week on whether to extend a U.n. special committee mandate to investigate allegations that China has used forced labor, enforced gender segregation and forced labor camps.