Hong Kong remains committed to retaining its link to the U.S. dollar through a currency board and has strong support from mainland China in defending its dollar, its top administrative officer said Thursday in Tokyo.
Anson Chan, chief secretary for Administration of the Hong Kong Special Administrative Region government, told a news conference that she has great confidence in the system binding the two currencies. “Because we regard exchange rate stability as the cornerstone of Hong Kong’s monetary and financial stability, we will not depart from the link,” she said.
She acknowledged that the former British colony is feeling the effects of the Asian economic crisis, noting that Hong Kong’s economic growth in the first three months of the year fell 2 percent. However, the ensuing adjustments in the local economy in such areas as wages and property prices are painful but necessary to maintain international competitiveness in the long term, she said. “We are very conscious of the need to continue to maintain international confidence by demonstrating that we will not interfere unduly in the operation of market forces,” she said, adding the economic fundamentals of the Special Administrative Region remain strong.
Regarding recent legislative elections, the first since Hong Kong was returned to Chinese rule, Chan said she was glad to see voter turnout was greater than expected. Prodemocratic forces made impressive gains in the polls, together securing 20 seats in the 60-seat legislature; only 20 seats are chosen via a popular democratic vote.
She stressed the turnout is “a firm indication of the Hong Kong people’s increasing willingness to participate in the political process” and growing public confidence in the high degree of autonomy promised by SAR. “What we are dealing with is a legislature that largely sees itself as an opposition party,” Chan said. “And we are very willing to take into account the legislative council’s views. “But at the same time, (we need to think of) the longer-term viewpoint of Hong Kong’s interests, and particularly maintaining overseas confidence,” she continued, adding the administration will adhere to long-held principles such as small government, free markets and prudent fiscal policies.
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