HONG KONG: Thanks to land purchases made largely by mainland Chinese developers, who have been paying eye-watering prices, Hong Kong’s latest budget forecast total fiscal reserves to stand at HK$952 billion (US$122.52 billion) by the end of March 2018. Add in various piles of cash the government has scattered about and it’s closer to HK$1.8 trillion, and none of this includes reserves held separately by the Hong Kong Monetary Authority.What this means in practical terms is the government has enough money on hand to stop taking in revenue today and still cover all its spending for two and half years. Sir Hamish Macleod, who served as Hong Kong’s financial secretary from 1991-95, used to refer to a surplus of 18 months’ spending as the “golden rule”. The answer to the last question is easy – it’s the Hong Kong people’s money. The others are harder to answer. Building large things is one way to spend bundles of cash, though not without controversy.
Hong Kong already has several major infrastructure projects underway: the Hong Kong-Macau-Zhuhai bridge, the Kai Tak re-development, a third runway at Chek Lap Kok airport and the West Kowloon Cultural District, not to mention the link to the mainland’s high-speed railway network. Plus there are plans to reclaim artificial islands to link Hong Kong Island to Lantau, put housing on brownfields and even in areas of country parks and, most recently, plans to build a museum to be a permanent home for Beijing’s dynastic treasures. Mike Rowse, former director general of Invest Hong Kong and a now-retired long-time civil servant is adamant fiscal reserves are much larger than needed.
