conomy
1 Hong Kong is currently the slowest growing of the Asian NIEs. Real GDP growth in 1989 was only 2.5% compared with 7.4% in 1988. In Q1 1990 the economy stagnated, recording 0% real GDP growth. The official forecast for 1990 as a whole is 2-3%. The slowdown is due not only to the effects of the events of 4 June 1989 in Beijing and a tightening of the economic adjustment programme in China; but also to emerging capacity constraints and a weakening of export volumes. Most worrying of all for the authorities has been the "Brain Drain" of experienced staff in strategic areas of the economy including finance, civil engineering and the public service.
HK$127 bn Infrastructural Projects
2 In October, Hong Kong's Governor, Sir David Wilson, announced a HK$127 bn (US$16.3 bn) package of new construction projects, to be implemented between now and the year 2006. These include:
a new airport off Lantau Island, with two runways, one of which will be operational before 1997. There will be a high speed rail and motorway linking it to the rest of the territory;
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a new town of 150,000 people with commercial and financial facilities, to service the airport;
two new container terminals (Hong Kong's eighth and ninth respectively).
Although funding details have not been finalised, these projects will impact on Hong Kong's fiscal position and the fiscal surpluses which characterised the 1980s may be coming to an end. The FY1990 fiscal surplus is forecast at HK$720 mn (US$92 mn or 0.2% of GDP) compared with the FY1989 surplus of HK$9.3 bn (US$1.2 bn or 2.1% of GDP). The Hong Kong Government is considering the establishment of a bond market as one means of
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