MANAGING the territory's finances through the transition was never going to be an easy task. But there is no reason to make it more difficult by drawing alarmist parallels with the problems in Western countries. One instance of this alarmism came last week when Hong Kong and Macau Affairs Office chief Lu Ping suggested Beijing's concern over higher welfare spending stemmed from fear that, by having a modest budget deficit, the territory was following the same path as the United States, and amassing an uncontrollable mountain of debt. Mr Lu really should know better than to make such a misleading comparison. The Hong Kong Government has projected a deficit of $2.6 billion in 1995-96, due to the high cost of the new airport. But this temporary deficit amounts to less than two per cent of total government spending and should disappear within the next year as the territory moves back into surplus. It is in no way similar to the long-term structural budget deficit in Washington that has plagued the US economy throughout the past decade, and threatens to soar to US$350 billion (about HK$2,720 billion) by 2002. As the recent bitter battles between President Bill Clinton and Congress show, the federal budget deficit is completely out of control. In Hong Kong, by contrast, the short-term deficit is the product of prudent financial planning. It allows the territory to bear the peak of spending on Chek Lap Kok without imposing an excessive burden on local taxpayers. China, which posted a 57.4 billion yuan (about HK$53 billion) deficit last year, has little it can teach the territory about financial planning. Rather, there is much it could usefully learn.