Issuing bonds to tackle Hong Kong deficit ‘legitimate’ not ‘monstrous’, ex-finance minister Henry Tang says
- Former finance minister Henry Tang defends government plan to issue HK$120 billion in bonds to cover recurring expenses after successor warns against measure
- ‘It is acceptable if it is used to strengthen capital flow and raise funds in short and medium term,’ he says
Hong Kong’s plan to issue bonds to tackle a dire deficit is not “monstrous” but rather a legitimate short- to medium-term solution to improve capital flow, former finance minister Henry Tang Ying-yen has said.
Tang on Tuesday defended the government’s plan, which Financial Secretary Paul Chan Mo-po announced in his budget blueprint, after his successor, John Tsang Chun-wah, warned the measure could affect the city’s credit ratings.
According to Chan’s budget speech last week, Hong Kong planned to issue HK$120 billion (US$15.3 billion) in silver, green and infrastructure bonds to cover the government’s recurring expenses. He remained confident that the city would balance the books within three years.
Tsang, the longest-serving financial secretary from 2007 to 2017, earlier said in a social media post that the city needed to look beyond bond issuances to cover government spending. He also argued the government had “undeniably fallen into an era of structural deficit”.
Speaking in Beijing as a member of the Standing Committee of the Chinese People’s Political Consultative Conference (CPPCC), Tang, who was the financial secretary before Tsang, called the plan “completely legitimate” as long as there was market demand.
“Bond issuance for the purpose of maintaining government operations is not monstrous,” Tang said.
“It is acceptable if it is used to strengthen capital flow, and raise funds in the short and medium term when the capital chain is broken.”
