As the third year of his tenure as Hong Kong’s financial secretary stretches out in front of him, Paul Chan Man-po will hope to see out the remainder of this one without putting his fiscal foot in his mouth.
Despite coming in fifth this year in our assessment of finance ministers around the region, it's not been a faultless performance.
Since being appointed finance chief in January 2017, the 63-year-old former president of the Hong Kong Institute of Certified Public Accountants has been plagued by a series of very public scandals – from libel accusations to allegations of dodgy land deals – not directly linked to his work as Hong Kong’s head honcho for finance.
That changed several months ago when a clean slate, at least as far as his day job was concerned, became sullied over a botched plan to give a HK$4,000 ($510) cash handout to more than 2 million of the city’s 7.3 million population.
The handout – considered by many to be a clumsy and populist fiscal instrument – will go ahead at some point later this year but only after ructions over red tape forced Chan into a public apology over the measure, which will likely cost the taxpayer more than HK$11 billion.
Mind you, it’s not like Hong Kong cannot afford to splash the cash.
In its latest credit opinion, Moody’s continued to set the Special Administrative Region of China’s fiscal strength score at “very high”, citing its very low government debt level of less than 5% of GDP.
Hong Kong’s ability to weather the twin threats of an aging population and external geopolitical shocks – especially due to the city’s increasingly intertwined relationship with mainland China and the Sino-US trade war uncertainty that brings – is also bolstered by its strong fundamentals.
“With a GDP per capita of more than $55,000 in purchasing power parity terms, households have significant capacity to absorb economic shocks,’ Moody’s said.
These concerns were highlighted in Chan’s second budget, which he delivered at the end of February.
