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Strategies & Market Trends : HONG KONG -- Ignore unavailable to you. Want to Upgrade?

To: MikeM54321 who wrote (1704)	5/29/1998 8:18:00 AM
From: WONG	Read Replies (1) \| Respond to of 2951

HK readies for recession Tung moves to safeguard property market as local economy contracts May 29, 1998: 7:47 a.m. ET HONG KONG (Reuters) - With new figures in hand showing a contraction underway in the local economy, Hong Kong leader Tung Chee-hwa said on Friday that the government would concentrate on averting a decline in the territory's vital real estate market. "Our foremost task is to stabilize property prices," Tung told reporters. "It is very important to stabilize prices. A continuing fall in prices is not good for Hong Kong. If the property measures do not work we will work out other measures to stabilize prices." Hong Kong, broadsided by Asia's financial crisis, is facing its worst economic downturn in years. A host of businesses including restaurants, property agents, department stores, and investment houses have folded and the jobless rate has hit a 14-year high of 3.9 percent. On Friday the government announced the local economy contracted by 2 percent in the first quarter of 1998, its first reverse in 13 years. Financial Secretary Donald Tsang attributed the decline to regional turmoil, lower consumer spending, a slump in the tourist industry, setbacks in the asset market, a squeeze on liquidity and shrinking exports. Because the situation was so volatile, he said the government could not forecast revised GDP figures for the remainder of 1998 at this time. Real estate crucial factor Hong Kong residential property prices, the linchpin of the local economy, have dropped about 40 percent from their peak in September 1997. The government said on Friday it would relax anti-speculation measures on the residential property market to help the sector avoid a hard landing during the present price consolidation. It decided to extend the pre-sale period of uncompleted flats from the present 15 months to 20 months before the estimated completion date of the development. However, Tung said the government would again impose anti-speculative measures if they returned in the future. "If a wave of speculative activities returns in the future, we will equally be determined to fight against it," he said. Hong Kong's last recession was in 1985 following Britain's decision to reunite the territory with China.