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“When completed, these infrastructure projects will enhance the connectivity of Hong Kong with the Mainland and the rest of the world, enrich our cultural life, create new development opportunities, consolidate our status as a global city and lay a new foundation for our sustainable development,” Mr Tsang said.

The Government will run a small budget deficit in 2008-09, due to the various measures announced in the Budget. “Most of these measures are one-off and time-limited. Hence they will not have long-term implications for the Government’s fiscal position and are consistent with our principle of fiscal prudence,” he said.

He says some of these measures are for the longer-term development of the community, such as the one-off fund transfer to University Grants Committee and cash injection to Mandatory Provident Fund accounts, and will not have an immediate impact on the economy.

Taking the lead

As Chair of the World Trade Organization (WTO)’s Sixth Ministerial Conference in December 2005, Mr Tsang showed enormous discipline and stamina despite the pressure and long hours. This he did by staying focused on the end goal.

“I always think that a good leader should devote most of the time to think about the future rather than dwell on the past. In such a multilateral forum as WTO, there were inevitably numerous disputes on multiple fronts when we came the long way to the negotiation table. At times, that could be distracting and frustrating,” he said.

Mr Tsang says he was convinced that much of the credibility of the multilateral trade platform, which Hong Kong had championed all along, was at stake, so there was no time to waste. “When you focus on the common goal, it becomes much easier to concentrate on the work and maintain the discipline despite the gruelling hours.”

Lessons learnt from crisis

As to Hong Kong’s property market, Mr Tsang is cautious, but not overly concerned about a speculative frenzy happening anytime soon. “The strong expansion of the Hong Kong economy over the past four years or so has been the key factor underlying the fairly robust performance of the local property market.

“The lowering of interest rates is another favourable factor, but interest rates are only one of the considerations in households’ and investors’ decisions to purchase a property. It is difficult to say that low (or negative) real interest rates will necessarily lead to speculative activities in the market.

“Also, the latest situation as indicated by the overall property transactions and speculators’ share in transactions is much less frenzied than that in 1997,” he said. Mr Tsang is also confident that most property buyers will be more cautious now than before, partly because of the lessons learnt from the Asian Financial Crisis.