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Competition welcomed but Singapore no model for free-market SAR

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Hong Kong will not follow Singapore in adopting sweeping pay cuts to help beat the recession, Tung Chee-hwa promised yesterday.

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Wage levels should be determined by the market, he said.

The Chief Executive was responding to proposals announced by the Committee on Singapore's Competitiveness yesterday that called for a 15 per cent cut in total wage costs, combined with tax reductions and other measures.

Mr Tung said: 'Our wages are adjusted by market forces.

'The Government has no intention whatsoever of issuing such instructions because Hong Kong is a free market.' The pay rise for the 190,000-strong civil service would be determined in accordance with the existing mechanism, said Mr Tung.

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He was confident Hong Kong would be able to maintain its competitiveness without resorting to sweeping pay cuts.

'Vision on this aspect has already been mapped out in my Policy Address.

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