of capital expenditure.
The Hong Kong Government
assumes that average oupital expenditure will be #16773 m. per azium (£48.3 m.). The International Bank team assumed a rather higher rate of Ky905 m. per
aumum (£56.5 m.). (1966 ospital expenditure was about
HĽA726 m. (€45. 4 m.).
(b)
Government as "lender of last resort":
Hong Kong has
no central bank. In effect Government aots as "lender
of lest resort" to the banking system. In the 1965
bank orisis, Goverment lent £20 million to the system.
in view of Hong Kong's heavy dependence on the state of
business confiéence and the effects of a loss of confi-
dence in the banking system, this is an important poten-
tial liability.
Develotment Frojects
The
intermediate
A number of possible major projects have been recently
under consideration – e.g. a masa transit scheme for Hong Kong,
a containerization port and other infrastructure schemes,
International Bank toam suggest that there would be advantage
in the establishment of a lending institution supplying/immediate
and long-term finance for development in the private asetor.
This would be established jointly by the Government and the
largest banks. There will also undoubtedly be increased 'desand
for housing and social services over the next few years.
have insufficient information here to assess any of these
projects such assessment must be done locally in the light of
the Hong Kong Government's viows of its economic and social
priorities. The following considerations, however, are
rolevant I-
(e) Hong Kong has sufficient actual and potential reserves
to allow for some expansion in the rate of development
spending. Moreover, in addition to these reserves, her public døbt is vory mall (Mƒ78.8 m. : £4.9 m.)
and she could easily raiss loans if she had to,
/(b) But