The well-known Hong Kong currency is in jeopardy after the city’s non-partisan parliament approved the government’s spending last year, experts have warned.
Experts added that the economy will be hit hard by the city as it plans to build jobs that will facilitate greater integration between the region and China.
Legislators approved more than HK $ 305bn (US $ 39bn) in the 2020-21 parliamentary term, which ended in October, on state projects, which are nine years old. Politicians discuss each plot for just 46 minutes on average, down from about two hours ago, before giving them a green light.
Opponents say the money spent shows that the parliament became a state-of-the-art “ATM machine”.
The Asian economy is already known for its vast reserves, which are collected mainly from trade and taxes. But by September this year, the city’s weapons had been reduced to HK $ 812bn, from about HK $ 1.2tn in March last year, after further expansion of the epidemic.
Many of the pro-democracy camps in Hong Kong have left the majority in the Legislative Council in November 2020 in protest of the expulsion of four of their colleagues, leaving parliament with no opposition.
Following Beijing’s reform of the elections that banned it Those who do not “love the world” Upon resignation, opposition politicians are unlikely to return to parliament.
“Without proper checks and measurements, the pressure continues [fiscal reserves] is increasing, “says Kevin Lai, an Asian economist with the exception of Japan’s Daiwa Capital Markets.
Andy Kwan, executive director of the ACE Center for Business and Economic Research, acknowledged that the government “has lost much of its financial security. . . especially when it comes to spending a lot of money on major upcoming projects ”.
Last month, the mayor of the city, Carrie Lam, announced plans to build a residential area near the Chinese border within 20 years, dubbed the “Northern Metropolis”, but did not indicate its value.
“Lantau Tomorrow Vision”, another major government project in preparation, seeks to build houses on man-made islands south of the city. The government estimates that the project will cost more than HK $ 600bn.
Major major projects are expected to be approved to help Hong Kong become more connected to the country, Kwan said, which could lead to increased investment in the city.
“The Northern Metropolis alone has five railways connecting Hong Kong to the mainland. The government should explain how these plans affect finances,” Kwan said.
Chan Kin-por, chairman of the parliamentary finance committee, denied that the commission had become a rubber stamp and said that there had been “very good discussions. . . very effective ”without opposition.
Aside from the money spent on major projects, Hong Kong finances have been affected by the Covid-19 border restrictions, which means less tourists and less business travelers. Prior to the outbreak, the city was shaken by anti-government protests in 2019 that experts say have tarnished its reputation as Asia’s economic capital.
HK $ 305bn approved last parliamentary share was about 10 percent higher than HK $ 279bn approved in 2019-2020. That amount did not include HK $ 205bn of emergency funding approved by regulators for Covid-related services over the past two years.