HK economy expands 6.8% in 2010

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Let's begin in Hong Kong where the economy is set to expand by as much as 5 percent this year, and inflation remains the major challenge. That's according to Hong Kong's financial secretary, John Tsang, in his budget speech for the 2011 to 2012 fiscal year.

Tsang says the economy bounced back strongly last year, thanks to strong growth in the Chinese Mainland and the rest of Asia.

In his forth budget speech, John Tsang says Hong Kong's GDP grew by 6.8 percent in 2010. That surpasses pre-tsunami levels, and is largely thanks to strong growth on the Chinese Mainland and other Asian trade partners.

Tsang says Hong Kong's economy has fully recovered, and forecasts growth of between four to five percent in 2011.

Looking ahead, Tsang perceives increasing risks of inflation and asset-price bubbles as major challenges for the SAR.

He expects underlying inflation for 2011 will average at around 4.5 percent. He says the soft U.S. dollar and possible sustained increases in global food and commodity prices will create more inflationary pressure on Hong Kong.

Tsang also announced the average inflation rate for 2010, as measured by the CPI index. That was at 2.4 percent, which is considered moderate, when taking into account the rapid economic expansion last year.

To curb inflation, Tsang says the government will strive to ease domestically generated price pressures. Strategies include forestalling property market exuberance, preventing excessive credit growth and pursuing a prudent fiscal policy.

The government will also continue to invest heavily in infrastructure, in a bid to enhance product! ivity an d alleviate inflationary pressure.

Meanwhile, the Hong Kong government will also strengthen co-operation with neighboring areas, optimize the business environment and enhance the competitiveness of its industries.

Editor:Zheng Limin |Source: CNTV.CN