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Hong Kong’s Paul Chan dismisses concerns bond issuance plan may hurt credit ratings, says global firms have welcomed policy
- Finance chief also issues rejoinder after predecessor slams bond issuance proposal in new budget, says past administration failed to boost land supply at the time
- Chan says credit rating agencies, financial institutions, among others he spoke with, ‘all agree the government should issue more bonds’
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The finance chief has dismissed concerns that Hong Kong’s credit ratings might be affected by the government’s proposed bond issuances, insisting global firms have welcomed the policy to fund infrastructure projects and stressing the city will not fall into a cycle of structural fiscal deficits.
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Financial Secretary Paul Chan Mo-po on Monday issued a rejoinder targeting a previous administration and said it had failed to boost land supply and left residents wrestling with sky-high property prices, a day after his predecessor, John Tsang Chun-wah, said the new budget’s deficit-relief measures could create long-term issues.
Former finance chief Tsang wrote on social media a day earlier that government bonds might be unattractive to buyers amid the high interest rate environment, fearing the city’s credit ratings would be affected when it needed to pay the debt’s interest.
Tsang, who left the government in 2017, also argued Hong Kong must find revenue sources other than bond issuance to cover government spending and warned that the city had entered an “era of structural fiscal deficits”.
But Chan brushed aside such concerns and argued the government’s proposed bond issuances had been welcomed by financial institutions.
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