HK confident of recovery by end of this year

Air traffic is growing as are exports;

The Straits Times, 20 Jun 2003

HONG KONG - Hong Kong Financial Secretary Antony Leung said yesterday that the territory's economic activity is expected to return to pre-Sars levels by the end of the year.

He was speaking to reporters while attending the opening ceremony of the Hong Kong Jewellery and Watch Fair here - the first such large-scale exhibition held since the severe acute respiratory syndrome (Sars) outbreak which began in mid-March.

He said he expects to see a full recovery in Hong Kong's economic activity within six to nine months.

He did not elaborate, but said many airlines were already seeing a steady rise in passenger numbers, an indication that tourists are starting to return to Hong Kong. He said local consumption has also begun to recover.

In addition, he noted that the outbreak did not have much of an impact on local exports, which have continued to grow steadily.

'A number of high-profile events in the sports, entertainment and cultural fields are in the pipeline for later this year, which I hope, would rebuild the confidence of the community in Hong Kong, and at the same time, uplift the community spirit and stimulate local consumption,' he told the gathering.

He also announced that Chinese tariffs on imports of Hong Kong-made jewellery and watches will be scrapped as part of an upcoming free trade pact.

The agreement is seen widely as a gift from Beijing to struggling Hong Kong, aimed at restoring the financial centre's once-vaunted business confidence. But some local officials are already reining in public expectations that it will be a cure-all for the economy's many ills.

Hong Kong and China will sign the Closer Economic Partnership Arrangement on June 30, ahead of the July 1 anniversary of the territory's 1997 handover back to the mainland. The deal is expected to remove import tariffs of as much as 50 per cent on roughly 4,000 goods. But economists are uncertain if it will significantly increase trade. \-- AFP, Reuters