In his latest budget, the minister announced plans to raise the borrowing ceiling for bond issuance from HK$700 billion to HK$900 billion to accelerate the development of the Northern Metropolis and other public works projects.
On RTHK’s phone-in programme on the budget, a caller and university student surnamed Chui raised questions over the government’s ability to repay debts.
“How confident are you that the economic returns of the investments can repay these HK$900 billion bonds and how confident are you that the future generations or future governments would not issue bonds to cover these old bonds?” Chui asked.
The finance chief, in response, stressed that the proceeds from issuing such bonds would be “purely for investment in infrastructure”, and that the Northern Metropolis is going to be “a major engine of growth” in the coming years.
He also pointed out that the city’s debt-to-GDP ratio is forecast to rise from 14.4 percent to 19.9 percent, and said: “By any international standard, we will still be very safe.
“We are very confident with the growing economy, with the investment return, we’ll be able to service these debts.”
The finance chief also pledged to properly position Hong Kong amid the current geopolitical situation and external uncertainties.
“We make sure we have a strong buffer to weather different volatilities. Our financial system remains stable and strong. At the same time, we also need to take opportunity of this challenging situation to position ourselves properly,” Chan said.
“Last year, say for example, given the geopolitics and the tariff war, a lot of capital came to Hong Kong. We became a safe haven. A lot of companies came to Hong Kong for listing. And we, in a way, take advantage of that.”
More 400 companies are in the pipeline for listing in the SAR as more capital is set to come to the city, the minister added.
Edited by Tony Sabine