Tsang announces new measures to contain effects of economic crisis

Hong Kong Chief Executive Donald Tsang (right) announces a series of measures to tackle the financial meltdown after a Task Force on Economic Challenges meeting on January 22. Financial Secretary John C. Tsang was also present at the news conference.

On January 22, Hong Kong Chief Executive Donald Tsang announced a series of measures to cope with the expected wave of staff layoffs and company closures after the Lunar New Year, and to assist school graduates who will be entering the labor market at mid- year.

Speaking after the third meeting of the Task Force on Economic Challenges (TFEC), the Chief Executive said the government will adhere firmly to the strategy of “stabilizing the financial system, supporting enterprises and preserving employment.”

To ease the pressure on the employment market, Mr. Tsang called for full cooperation between the public and private sectors to promote employment. He introduced a number of new measures:

1. To tackle the serious unemployment situation in the decoration and maintenance sector, the Buildings Department will receive an extra US$2.3 million to carry out a one-year special operation to remove 5,000 abandoned advertising signboards. Apart from creating approximately 170 jobs, this will improve public safety and beautify the city.
2. The Internship Program under the Innovation and Technology Fund will be further expanded, providing 600 internships in 2009.
3. The Employees Retraining Board will provide at least 143,000 training places this year, an increase of 20,000 places over the previous financial year.
4. Tertiary institutions will strengthen their career services and work to increase places for tutors, research fellows and postgraduate students. They will roll out more courses, particularly for professionals and mid-level and senior executives, to provide them with continuing education opportunities between jobs.
5. More than 20 statutory bodies will recruit 6,000 workers and create approximately 2,000 temporary jobs or internship opportunities in 2009.
6. The government has discussed the employment of graduates with various local and international Chambers of Commerce.  Some groups have agreed to introduce internship programs and will encourage their members to provide internship places; others are planning to offer more than 800 temporary jobs.
7. The government has explored with the Hong Kong Chinese Enterprises Association the possibility of providing internship and training opportunities on the Mainland for university graduates.

“Preserving employment” aside, another major task of the government is to stimulate the economy. To promote tourism and retail businesses, the government will organize a series of major, international events this year, as well as add color to the existing ones, to enhance Hong Kong’s reputation as the “events capital.” The East Asian Games and celebration of the 60th anniversary of the founding of the People’s Republic of China will be the highlights in 2009.

At the district level, the Lands Department has compiled a list of vacant government sites throughout the territory, which may be made available for short-term use by nongovernmental organizations. If used for community purposes and supported by the District Council and relevant departments, the sites will only be charged a nominal rent.

“With the State Council’s endorsement of the Pearl River Delta Development Plan Outline, we will follow up immediately with the Mainland authorities to explore further opportunities for cooperation,” Mr. Tsang said.

“The Chief Secretary for Administration agreed with Guangdong yesterday [January 21] to set up a new coordinating committee to strengthen our cooperation platform to steer our work in this aspect. We will draw up a plan that will best benefit the long-term development of Hong Kong,” he added.

In light of the expected increase in business closures and bankruptcies, the government has adopted the recommendation of the TFEC to reconsider introducing a corporate rescue procedure. The proposal provides an opportunity for companies in short-term financial difficulties but with viable long-term business prospects to turn around or restructure.

The Chief Executive noted the proposal was debated in the business community and the Legislative Council several years ago but no consensus could be reached.

“The financial tsunami presents an opportunity for all parties concerned to strike a compromise and resume the necessary legislative work so as to minimize business closures and job losses,” the Chief Executive said.