Be prepared

Greece's failure to form a coalition government hit the news headlines yesterday, raising fears that the country might exit the eurozone. Stock markets in both the States and Europe reacted with a slide, while Hong Kong stocks plunged by over 600 points. In fact, local stocks have fallen for nine of the past 10 days.

The global financial market remains volatile and will continue to be overshadowed by the European debt crisis - certainly in the short run. In Hong Kong, many people are following the latest developments closely and the editorials of most newspapers today also focused on this issue.

With increasing economic globalisation different parts of the world are now more closely connected and the domino effect is not uncommon. Given such an uncertain external economic climate, the new-term government must remain vigilant at all times and be prepared for different scenarios. And naturally, chief responsibility will fall on the shoulders of the Financial Secretary.

At present, the Financial Secretary is heavily burdened with a number of tasks. Apart from overseeing economic development, he also has to supervise the development of infrastructure and the management of public finances. In the event of an unexpected economic or financial crisis he must be constantly on guard and ready to act quickly, because the consequences of even a slight oversight or small mistake could be very costly.

The proposal in our reorganisation package to create a Deputy Financial Secretary post to share the Financial Secretary's workload is fully intended to give the Financial Secretary more time and space to respond to the ever-changing circumstances of the macro global financial environment and focus on crisis management.

As a small, open and free economy, Hong Kong is vulnerable to changes in the external economy. I imagine many of you remember the lessons we have learned in recent years. With the creation of the Deputy Financial Secretary post, the Financial Secretary could focus on both responding to the changes of the external financial environment and addressing the needs of the development of the local economy.

May 17, 2012