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The interest rate cut was welcomed by the HK Commercial Daily (29.6), which said that high Interest rates would not help ease inflation in the short term.
The HK Daily News (29.6) criticised the Government for interfering with the market under the pretext of curbing inflation. Such interferences would only lead to unfair competition, it said.
The HK Economic Times (1.7) noted that people in the market had criticised the Government for raising and reducing interest rates within a short period of time, with the increases and decreases not reflecting market needs. The paper wondered whether the Government had a well-defined objective in stabilising the economy through its policy on interest rates.
The Express (2.7) was not convinced by the Government's reasons for cutting interest rates. Noting that an earlier interest rate hike was prompted by the stalemate over the airport talks, the paper felt that the sudden reduction could be seen as an indication that there was now a favourable turn in the negotiations. In this connection, bank rates were cut to stimulate the stock market, the paper said.
NEW AIRPORT PROJECT
Developments in the new airport project remained a subject of discussion in the Chinese press, prompting seven editorials and commentaries during the past week.
In a short commentary, Sing Tao Jih Pao (2.7) referred to recent reports on a possible delay of the airport project. The paper pointed out that the core problem about the airport was that China would not be satisfied until she had "a final say" on HK issues. Under the circumstances, it would be pointless for the British side to continue with the talks, the paper said.
Sing Tao Wan Pao (2.7) believed that it would be very difficult to achieve a breakthrough in the negotiations because concessions by either side would definitely undermine its credibility.
The paper was of the view that it might be better to allow a third party to intervene in a bid to solve the problem. Instead of being deadlocked, the two sides should study other options proposed for the new airport.
The HK Commercial Daily (30.6) said in view of the fact that China had already made concessions over the new airport project, the HK Government should sincerely co-operate with the Chinese side in an attempt to solve the airport problem.
An early agreement with China could only be reached if the HK Government showed sincerity and co-operated with China. The ball was therefore in HK's court. For the sake of prosperity and stability of the territory, the paper hoped that the HK Goverment would co-operate and stop playing "petty tricks".