A glow of confidence

Article Abstract:

Hong Kong is feeling economically secure, but it should not ignore economic warning signals. The Hong Kong dollar weathered the 1997 financial crisis affecting Southeast Asian currencies, and Hong Kong looks set to grow at 5.5% during 1997. Hong Kong's connection with China gave it strength rather than vulnerability in the financial crisis, and it is strongly placed to become China's global intermediary and service capital. However, Hong Kong has the highest stockmarket capitalization-to-GDP ratio in the world, the rate of credit expansion is 34%, and 47% of bank lending is for property.

Economic Programs, Administration of Economic Programs, Cover Story, Economic policy, Economic indicators

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Riding high

Article Abstract:

Many investors were interested in Asian markets during the Credit Lyonnais Securities Asia second annual Asia Investors' Forum in mid-May 1995, with Hong Kong receiving a 10.6% investment increase, the largest. Fund managers, primarily from the UK and US, totalled 400 and managed $3 trillion. The US fund managers made significant investments largely based on the belief that Wall Street was unlikely to keep climbing because the US dollar was stabilizing and interest rates had peaked. Some fund managers were carefully questioning production costs, margins and financing operations.

Conferences, meetings and seminars, Foreign investments, Investment advisers

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Politics and the peg

Article Abstract:

It is becoming increasingly likely that the Hong Kong government will have to bring to an end the link between the Hong Kong dollar and the US dollar. The Hong Kong Monetary Authority has used large-scale intervention in the stock, currency and futures markets as a way of avoiding raising interest rates, and has thus given up its main weapon in defending the US dollar peg. However, ordinary people in Hong Kong still have faith in the Hong Kong dollar, and this is key element in maintaining its integrity.

Monetary policy

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