A wise move for China

In Washington, economists expect growth to slow to a moderate 2.5 percent as the financial turmoil in Asia threatens to slash United States exports and send a wave of cheap imports across U.S. borders.

The International Monetary Fund estimates that the Asian financial crisis will also reduce growth in other developed economies by about 0.8 percent.

At the World Economic Forum in Davos, Switzerland, (Chinese) Vice-Premier Li Lanqing admitted that it would be impossible for China to totally separate itself from the financial meltdown in the region. But Mr. Li indicated that Beijing had prepared various countermeasures, including a plan to invest US$750 billion in infrastructure over a three-year period. At a time when there appears to be enormous difficulties for China to expand its exports, it may be wise for the mainland to boost its domestic market in order to maintain high-speed growth. The big money injected into the infrastructure will definitely offset the sums lost in foreign trade.

This move, which involves a shift of investment funds from the stagnant manufacturing sector to other sectors, will help boost economic growth on the mainland. It also is good news for Hong Kong. It certainly will help companies involved in infrastructure projects on the mainland. Nor should we forget that our economy is now more closely tied to the mainland than the West. This means that economic development on the mainland will provide much-needed stimulation for our economy. Hong Kong basically is a service-provider for the mainland. Those services include technology, finance, shipping, management and information. In all these fields there are opportunities for, among other things, employment and making money.

-- The Hong Kong Standard