From the Commissioner

Dear Friends,

In my inaugural letter to you since taking up the post of Hong Kong Commissioner, USA, I would like to begin by wishing you Happy Holidays.

Thankfully, I am no stranger to Washington winters having previously served as the then First Secretary in the Hong Kong Economic and Trade Office from 1991 to 1994.

Since the establishment of the Commissioner post in 1993, the Hong Kong government has placed special emphasis on its relationship with the United States Hong Kong's second largest trading partner.

This is a relationship that I cherish and intend to expand upon as Commissioner by enhancing Hong Kong-US trade, economic, investment and cultural ties.

Beyond these areas, Hong Kong has emerged as a valued partner of the United States from securing global maritime trade to combating money-laundering and public health issues.

In addition, we are unified by many common values.  We are committed to a free and open society, buttressed by the rule of law and an independent judiciary, and belief in free-market principles.  Though the latter may be challenged as the global economy faces one of the most severe financial crises in years, it is imperative that the ideals of economic freedom be preserved.

Hong Kong has demonstrated what the benefits of free-markets can achieve as what was once described as a "barren rock" has emerged as the freest economy in the world and an international financial and business center.

With regard to the current global financial crisis, governments around the world have taken extraordinary and unprecedented steps to stabilize markets and shore-up consumer confidence.

As an externally oriented economy, Hong Kong is not immune to the global downturn.  Our economy grew by 6.4 percent last year but we have just reduced our economic forecast this year from 4 5 percent to 3 - 3.5 percent while our unemployment rate has climbed up to 3.8 percent lately.  But since the Asian financial crisis a decade ago, Hong Kong has measurably reinforced its financial markets by improving risk management of banks and creating a more transparent regulatory system.

In response to the financial turmoil, over the past few months Hong Kong, under the leadership of Chief Executive Donald Tsang, has acted to lessen the impact of the crisis and ensure the stability of its financial system.

As a precautionary measure to bolster confidence in the banking system, the Hong Kong Government has guaranteed all deposits held in authorized institutions in Hong Kong and established a Contingent Bank Capital Facility to make available additional capital to locally incorporated licensed banks should they request it.  Both measures will remain in force until the end of 2010.

Early this month, Chief Executive Donald Tsang unveiled a stimulus plan designed to stabilize our financial system, preserve employment, support enterprises and stimulate the economy.

Assisting Hong Kong through this tumultuous period, the Central Government will introduce a variety of measures intended to, among other things, reinforce the city's position as a global financial centre, expand the individual visit scheme, and foster economic cooperation and infrastructural links between Hong Kong and the Pearl River Delta Region.

The combination of measures will help us in overcoming the current financial crisis and turning risk into opportunities.

We remain confident that when the external environment improves, Hong Kong will quickly rebound.

I wish you a safe and happy New Year.

Sincerely,

Donald Tong

Hong Kong Commissioner, USA

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