SAR can rely on China's foreign assets, says Zhu
Premier Zhu Rongji has given the strongest indication yet of the central government's willingness to support Hong Kong and help it emerge from its economic woes, saying that it was backed by China's foreign assets of more than US$300 billion.
In a series of speeches in the SAR yesterday, Mr Zhu urged mainland authorities to take care of Hong Kong's interests, criticised those he felt had failed to do this, and played down the problem of the budget deficit which is tiped to hit $60 billion.
Even if Hong Kong's reserves ran out over the next three years, it could issue bonds which would be snapped up by mainlanders, said Mr Zhu. 'I would be the first to buy,' he added.
The premier gave a keynote speech earlier in the day at the World Congress of Accountants at the Convention and Exhibition Centre in which he described Hong Kong as a 'glittering pearl' and praised its competitiveness.
But he later warned that the worst was yet to come for the Hong Kong economy and called on the public to prepare for it.
He admitted he had no solutions himself, but said he was fully confident that Chief Executive Tung Chee-hwa and his team would overcome the difficulties.
Meeting Hong Kong-based Chinese entrepreneurs yesterday afternoon, Mr Zhu said China's foreign reserves had reached US$265.5 billion. Taking into account income earned overseas, the value of China's foreign assets has exceeded US$300 billion.
'Mr Tung you do have a share. I have said we would mobilise all the resources and efforts that could be mobilised to enhance Hong Kong's prosperity and stability,' Mr Zhu said.
Liberal Party legislator Howard Young said Mr Zhu's remarks about the economy were targeted at the speculators that intended to attack the Hong Kong dollar.
'He is firing a shot across the bows. It is a strong signal to warn the speculators not to attack the dollar,' Mr Young said.
Mr Zhu also reminded Hong Kong-based Chinese entrepreneurs to behave themselves.
'I hope that as you swim in the sea of the market economy you will not become too clever as to consider making profits only. Don't forget our identity - most or all of us are communists - we need to exercise self-discipline.'
He cited two cases to strongly criticise mainland authorities and their subsidiaries for lacking sensitivity in handling issues relating to Hong Kong.
On the recent report by Bank of China International Research casting doubts on the pegged currency rate in Hong Kong, Mr Zhu said it reflected neither his views nor President Jiang Zemin's.
'[People] will think the BOC is the spokesman of Zhu Rongji. The exchange rate fluctuated the day after the article was published,' he said.
Referring to the Ministry of Information Industry's urging China Telecom to raise its rates prior to the 16th party congress, he said: 'You don't know about the market economy. You should not interfere. Whenever you do anything that affects Hong Kong people, no matter if it is only a little, not to say a million US dollars, you need to consider [their interests].'
Mr Zhu said that he did not know about the plan to raise IDD connection fees until he read in Hong Kong newspapers that the issue had aroused controversy.
'The management of the China Telecom has not been cautious in raising the fees when urged to by the ministry,' he said.
He said that only about US$10 million in additional profits came from raising the fees, but the decision showed Hong Kong' sensitivity to such issues.
He also noted that some Hong Kong telecom operators also took the opportunity to raise fees.
'I am not blaming them. It is the behaviour of enterprise,' he said.
Mr Zhu added that the central government's policy towards Hong Kong had not changed in the wake of the leadership reshuffle.
He said that the leadership of the party's central committee would uphold 'one country, two systems'.
Mr Zhu went out of his way to strike a chord with Hong Kong people by reciting lyrics from the song Below the Lion Rock, sung by Canto-pop legend Roman Tam Pak-sin, who died this month.
The song, which evokes memories of the struggles Hong Kong has faced in the past, was also used by Financial Secretary Antony Leung Kam-chung in his budget speech this year.
Mr Zhu said although he could not sing the song, or recite the lyrics in Cantonese, at least he shared the same feelings. He ended his speech by saying: 'I love Hong Kong.'
He recited the lyrics at a banquet at Government House attended by senior officials and businessmen.