5. With such a broad based economic
upturn, some of the problems that have troubled Hong
Kong for a long time have been reduced or eliminated.
The specifics are:
Employment, a major public concern, has improved.
The unemployment rate has dropped steadily from a peak
of 8.6% in 2003 to 6.7% at the end of 2004. Total employment
has reached a historical high of 3.3 million.
Property values have rebounded significantly.
The number of property transactions was the highest
since Hong Kong's return to China. Cases of negative
equity, which put the middle class under intense pressure,
have dropped drastically from a peak of over 100 000
to about 25 000 last September.
The upturn in the property market has led to a
rebound in rents and a gradually improving consumer
market. As a result, deflation, which had persisted
for 68 months, finally ended in July 2004. Public revenue
has increased and government expenditure has been contained,
greatly easing the fiscal deficit.
6. Our economic growth has been achieved through the
clear positioning and direction we set for Hong Kong.
As enterprises have improved cost effectiveness and
enhanced competitiveness, and our economic structure
has increasingly developed high value-added services,
there is little chance of a bubble economy reappearing.
Following the alleviation of the problems of unemployment,
deflation, negative equity and fiscal deficit, people's
confidence in our economic prospects has been restored.
All this points to the fact that after so many years
of difficult adjustment, Hong Kong has finally shaken
off the economic doldrums and is now on the road to