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Daily Archives: November 15, 2008

Hong Kong falls into recession

Image    Hong Kong slipped into recession in the third quarter as the global economic slowdown took its toll on the financial hub, government figures showed yesterday.

Hong Kong’s gross domestic product fell 0.5 percent from the previous quarter on a seasonally adjusted basis, following a fall of 1.4 percent in the second quarter, the Census and Statistics Department said in a statement.
“The growth of the Hong Kong economy slowed notably further in the third quarter, as the external sector slackened amid the faltering global demand,” government economist Helen Chan said in the statement. “And as domestic demand towards the end of the quarter was severely hit by the outbreak of the global financial tsunami that caused significant jitters in the local asset markets.” The standard definition for recession is two
consecutive quarters of falling GDP. Hong Kong joins Singapore, Germany, New Zealand and Italy in reporting a technical recession as the global slowdown bites into economies across the world. Hong Kong cut its full-year 2008 GDP forecast to between 3 and 3.5 percent from the previous 4 and 5 percent but kept its forecast for inflation at 4.2 percent for the full year. Last year, Hong Kong’s economy grew 6.4 percent.“The whole world has changed radically since September and we expect the recession will deepen,” said Hang Seng Bank economist Irina Fan, according to Dow Jones Newswires. “Hong Kong can’t expect to recover until
2010 at the earliest,” she said. The government said merchandise exports were hit hard, giving their worst performance since the first quarter of 2002, as demand from the United States and other markets dropped away. Consumption, one of the most solid performers in the city’s shopping-mad economy, held firm in July and August but slackened distinctly in September, the statement said.

Scholar advises to follow legal procedure to deal with casinos’ financial problems

by Anni Lam

A scholar in Macau advised the SAR government should follow the appropriate legal procedure to deal with the financial crunch problem or possible bankruptcy situation happening to any of gaming corporations in the SAR.
Wang Wuyi, researcher of Economics and Public Administration Study Centre of the Macao Polytechnic Institute said yesterday on the sidelines of a seminar that any bankrupt situation should be dealt with under the formal bankruptcy law at the Bankruptcy Court.
He said that the redemptive procedure had all been regulated by laws and that should be followed and be fairly settled.
“I also think that the values of capitals should be calculated strictly under the proper assessment procedure from what the law regulates,” he went on.
The researcher also said that “such a doing would be better than the government to directly take over the aftermath of what's left of the gaming corporation.”
He also said that even if the number of gaming corporations shrank to three, it would not affect much of the overall gaming mode.
“Didn't we originally set to have only three gaming corporations at the beginning? But we expanded to six gaming concessionaires today,” he added.
Wang at the same time also recommended the government to reconsider the aiding plan to do with any of the financial-stridden gaming corporations.
He also said that the legal status of the government would likely be befuddle once the government takes over the gaming corporations.
“One of the most significant problems is the confusion of status between monitor and operators,” he told.
Yesterday the Research Centre of the University of Macau held a seminar at the UNESCO Centre of Macau at Nape to discuss the “Expectation of the Next Ten Year Political Measure in Macau,” wherein the lawmakers, scholars and lawyers gave suggestions to the next ten year government policy orientation, and where most said they hoped to emulate the law system in the future.
In addition, some advised the government to reinforce the regional corporation in order to diversify markets and to reduce the reliance on merely gaming industry.