Hong Kong Financial Secretary John Tsang (曾俊華) warned of further economic challenges ahead for the city amid global financial turmoil, company closures and investment losses.
“The financial crisis will have a considerable economic impact on the economy and people in Hong Kong should be ready for the challenges,” he told reporters yesterday after officiating at a ceremony.
“Still, Hong Kong’s fundamentals and its system are healthy and our economy remains very strong,” he said.
Tsang’s comments came after three Hong Kong retailers and a toymaker collapsed within two weeks and as tightened credit conditions make it more difficult for smaller companies to refinance debt.
Hundreds of investors protested in the streets last week over losses on so-called minibonds guaranteed by bankrupt Lehman Brothers Holdings Inc.
“We expect Hong Kong’s economic activity will be very slow, but still outperform other counties in Asia in the next six months,” said Kenny Tang (鄧聲興), director of Tung Tai Securities Co (東泰證券) in Hong Kong.
“China will contribute to Hong Kong’s meager growth looking forward and the city still has a solid financial basis, backed by its strong reserves and lack of foreign debt,” he said.
Tai Lin Radio Service Ltd (泰林無線電行), a 60-year-old Hong Kong electrical appliance retail chain, was forced to close on Friday after accumulating HK$100 million (US$13 million) debt.
U-Right International Holdings Ltd (佑威國際控股), operator of about 600 clothing outlets in Hong Kong and China, had funds frozen after it failed to meet a demand to pay HK$850 million in debt.
Smart Union Group Holdings Ltd (合俊集團), a Hong Kong-listed contract toymaker, said on Friday the High Court had appointed two liquidators to take control of its assets.
The company closed two factories in Guangdong Province, the National Business Daily said.
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