Motion Debate on Atypical Pneumonia dealing a blow to Hong Kong's Economy

Madam President, a few colleagues from the Liberal Party have just expressed their views on the motion proposed by Dr David CHU on behalf of their sectors. Madam President, I wish to express my views on other areas. Dr David CHU has just expressed his views on real estates and the linked exchange rate, I think that his views are right and the Government should consider the relevant matters on the basis of the views that he has just expressed.

A few Members have just discussed the long-term measures related to atypical pneumonia but I think we can also take some short-term measures. As I have recently noticed, the situation may become better if the existing businesses can stick it out. It is 7 May today and as compared with last Wednesday when we discussed the same subject, the economic situation has turned better when we discuss this subject today, and more people have gone out to spend money last Saturday and Sunday. Actually, several Members have mentioned that the number of infected people has recently started falling to a single digit and the number of deaths has also fallen to a single digit — except the fact that 11 people died today — I believe Hong Kong people will find the situation heartening and they will think that the epidemic has gradually come under control. Concerning short-term measures, the Liberal Party has asked many bosses why they still stick it out and what short-term measures can help them if they stick it out for a month or two more. Recently, we have asked several times whether banks can deal with loans and working capital more leniently. Of course, we definitely understand the opinion of Mr Joseph YAM, Chief Executive of the Hong Kong Monetary Authority (HKMA), that Hong Kong needs a strong banking system, but I wonder if the quality of banks will be affected if banks implement a short-term measure for a month or two during which a client only repays the monthly interest (though the interest rate is very low) but not the principal. I think that there is not any problem and banks can do so.

Now that many businessmen start having problems with their working capital, I wonder if banks would refrain from reducing their credit facility amounts in view of poorer business for a month or two? Can these businessmen be allowed to maintain their usual credit facility amounts to enable them to stick it out for a month or two? Actually, in view of the situation last Saturday and Sunday, a lot of businesses have already slightly recovered. Many shop owners have said that their turnover dropped by half at the end of April when atypical pneumonia first broke out but their turnover picked up last week and it was only around 20% to 30% less than before. The situation has actually become better. If we give them further support (I am not asking the Government to give out money to support them, I am only asking the HKMA to issue guidelines; neither am I asking banks not to manage finances prudently, I am asking them instead to increase the credit facility amounts as far as possible, as a short-term measures for a month or two) and if various quarters are willing to extend a helping hand, there will be a turn for the better. I have heard many landlords (including developers) say that if banks can be less strict and allow them to use $150,000 out of the monthly rents of $300,000 they collected for the repayment of interest and $150,000 for the repayment of principal, and if they are allowed to just repay the interest but not the principal for two months, there will be room for them to reduce the rents of tenants within these two months. If landlords are willing to do so, banks should give such a concession, but they have to obtain the approval of the HKMA if they are to give such a concession. If the HKMA does not grant its approval, individual banks that may not be as strong as the HSBC will encounter difficulties. I hope that the Financial Secretary can take the situation into account. I am only asking for measures to be taken for a very short term and I think that it will not really affect the robustness of the banking system.

Moreover, many airlines have asked whether anybody has been infected after taking a flight. The Government frequently make appeals on television to people who took certain flights to report to the Government but nothing is heard after the investigation. If the Government steps forward and tell people that it has been confirmed after the investigation on those people that all of them have not been infected, and give foreign countries the message, foreign tourists will visit Hong Kong and businessmen will have the courage to come to Hong Kong. They will not shrink back because they think that they will very easily be infected after taking flights, especially long-haul flights of more than 10 hours. If these messages can be given, I believe it will be more or less helpful to the aviation and tourism industries in the short term.

In my opinion, we can now begin to consider making efforts to stimulate spending. If we asked for spending by people a week ago, I also worried whether it was right to do so. Nevertheless, the epidemic situation has recently improved and I think that it is time for us to make preparations. I hope that we can begin to implement these measures for stimulating spending a week or two later when the epidemic situation has become even better.

Madam President, the last point I wish to make has already been mentioned by several Members and Mr Joseph YAM, that is, I ask the Financial Secretary to consider issuing bonds, which is also supported by Dr David CHU. However, the Liberal Party's opinion on this issue is rather conservative. The HKMA has indeed indicated that our reserves will have a yield of 5.1%. On the basis of the remark made by the HKMA, if five-year bonds are issued at a yield of 4%, we will still have a yield of 1.1%. I am not sure if giving such a message can really achieve our objective.

In addition, the Liberal Party always thinks that the Government should reduce expenditures in view of the overall government finances. I am a bit worried, if we have a reserve of some $300 billion and issue $100 billion in bonds, will it make things difficult for the Financial Secretary when he starts out to reduce expenditures? For example, when he has to tackle the issue related to the civil service, will it give civil servants an excuse that it is no longer necessary to talk about reducing expenditures because the reserve of some $300 billion has not decreased and the Government will issue $100 billion to $200 billion in bonds? It is something that we do not want to see it happen.

Madam President, the Liberal Party expresses again that it will support Dr David CHU's motion. Thank you.