Hong Kong has strong buffers, robust policy frameworks: IMF

HONG KONG, Nov. 29 (Xinhua) -- China's Hong Kong is well placed to navigate through challenges given its strong buffers and robust policy frameworks, including ample fiscal reserves, strong financial regulatory and supervisory frameworks as well as the Linked Exchange Rate System (LERS), an International Monetary Fund (IMF) Staff Mission said in its latest assessment published on Wednesday.

The assessment, which was made in the Concluding Statement of the IMF Mission following its 2017 Article IV Consultation with the Hong Kong Special Administrative Region (HKSAR), noted that Hong Kong's economy has gathered momentum, with real gross domestic product projected to grow at 3.5 percent in 2017, amid robust domestic demand and recovering external demand.

Hong Kong's balance of risks has improved since last year, said the mission, adding that the strong policy frameworks and ample buffers Hong Kong has built and strengthened over the last decade will help weather challenges.

The current fiscal stance of the HKSAR government is appropriate, and the financial system of Hong Kong is well placed to cope with the challenges ahead, the mission assessed while welcoming Hong Kong' continued strengthening of the regulatory and supervisory framework to maintain financial stability.

The mission expressed support for Hong Kong's continued efforts to tap new opportunities as a global financial center.

Hong Kong is well positioned to contribute to, and benefit from, the Belt and Road Initiative and the Guangdong-Hong Kong-Macao Greater Bay Area development, it said, adding that it welcomes the HKSAR government's support for Fintech development and the Hong Kong Monetary Authority's establishment of the Infrastructure Financing Facilitation Office and the Fintech Facilitation Office, which will help enhance Hong Kong's role as a key global financial center.

The mission reaffirms its continued support for the LERS, commenting that it is the best arrangement for Hong Kong and anchors the stability of Hong Kong's highly open economy with its large and globally integrated financial sector.

The HKSAR government's Financial Secretary Paul Chan welcomed "the IMF's reassuring forecast for Hong Kong and reaffirmation of our strong buffers and robust policy frameworks".

With the Chinese Mainland continuing to be the growth engine of the world, the rolling out of the Belt and Road Initiative and the Guangdong-Hong Kong-Macao Greater Bay Area development, in which Hong Kong plays a unique role, and the new and continuous impetus to be injected into the economy by the HKSAR government in its new proactive role, "I have every confidence that Hong Kong's economic growth will continue to gather strong momentum," he said.

Chief Executive of the Hong Kong Monetary Authority Norman Chan welcomed the IMF's continued support for Hong Kong's Linked Exchange Rate System which underpins its economic stability.

"I am also pleased to note the mission's support for our work in capturing opportunities arising from the infrastructure financing and fintech space, as well as in building stronger financial ties with the Chinese Mainland," he said.

The IMF mission visited Hong Kong from Oct. 23 to Nov. 3 for the 2017 Article IV Consultation with the HKSAR. It held discussions with HKSAR government officials, regulators and private sector representatives. Enditem