The mainland finance minister said yesterday Hong Kong could find a solution to its budget deficit problem, and called for greater economic integration between the two sides. Xiang Huaicheng said also he had full confidence in Financial Secretary Antony Leung Kam-chung's ability. 'The deficit Mr Leung is facing is smaller than mine, and he is more capable than I am. If I can solve the problem, Mr Leung must be able to do it even better,' he said. But Mr Xiang, in Hong Kong to attend the 16th World Congress of Accountants tomorrow, declined to say whether the SAR government should raise taxes to balance the budget. He urged the two sides to establish closer economic ties, and said meetings held between the two governments to improve communication and economic co-operation had been progressing well. Mr Xiang also believed the 16th party congress in Beijing that ended last week and which had brought a smooth change in the leadership of the central government, would benefit Hong Kong. 'A stable political environment and a vibrant economic development in the mainland must have a good influence on Hong Kong,' he said. The Hong Kong government has projected a budget deficit of about $40 billion for 2002-03, with accounts staying in the red until 2006-07. Tax experts have said the deficit might rise even further, with Hong Kong Taxation Institute president Joseph Fu Chi-kwong saying it was likely to balloon to $60 billion this year. The government suspended land sales last week in the hope of reviving the property market.
