The government's latest attempt to prop up the housing market, at the behest of the real estate developers that so readily have its ear, is tantamount to pouring oil on the fire.
It is promoting the very cause of Hong Kong's problems: the territory is still too expensive to live, work, and do business in. The reason it is so expensive, of course, is that most of Hong Kong's competitors allowed their currencies to devalue during the Asian economic crisis while Hong Kong did not.
The government's latest measures will only ensure the SAR's ultimate irrelevance. The way out of Hong Kong's deflationary spiral is very clear - devalue the currency. If the administration did this, the deflationary spiral would end immediately and our ports would become competitive again. Why won't the government take this step?
Could it be that it fears the wrath of Hong Kong-based multinational companies that have substantial holdings in Hong Kong dollars? If so, it is time the government started putting the future of Hong Kong before the short-term interests of the rich and powerful.
KEN THORLEY
Yuen Long
