Financial Secretary Donald Tsang Yam-kuen has admitted that 'at times' the Government's response to the impact of the financial crisis has been 'gauche and clumsy'.
However, during a frank and wide-ranging interview with the South China Morning Post about the regional economic collapse, Mr Tsang said Hong Kong could recover from the crisis by next spring.
'I wish to see Hong Kong come out of this crisis in hopefully next spring or whenever next year as a leaner, sharper, far less self-centred economy with a much more well-developed relationship with China, and with a better relationship with its Asian neighbours,' he said.
Mr Tsang's forecast contrasts with less bullish predictions by Chief Executive Tung Chee-hwa, who has warned that recovery could be two years away.
The Financial Secretary said the recovery could take place only if Japan arrested its economic decline and if prices on Wall Street fell up to 20 per cent in a short period. A sharp fall on US markets would have a limited impact on Hong Kong because local share prices had been hard hit by the fallout from the regional crisis, he said. However, in the longer term a Wall Street correction would lead to an increased flow of funds into the local market.
He said Tokyo was not acting fairly towards its Asian neighbours, which remained major export markets. He expressed fears about the continued instability of the yen.