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HONG KONG: Hong Kong leader Donald Tsang is expected to announce plans to boost the economy and to combat poverty when he delivers his annual policy address this week, analysts said.
In his first address since winning re-election in March, Tsang will explain his political blueprint for the coming year. He will set out strategies that will likely please tycoons and grassroots workers but those looking for signs of a move towards greater democracy may be disappointed.
With a swelling budget surplus, which is expected to top 55 billion Hong Kong dollars (7.05 billion US) this financial year, analysts said the China-backed leader is widely expected to return some money to the community.
"Because of the large surplus we have, Donald Tsang is in an enviable position to give away money," said Joseph Cheng, a political science professor at the City University.
"There will be plans that will please the business community and the middle class, but he will also be under pressure to help the poor," he said.
Peter Cheung, political professor at the Hong Kong University, echoes those views.
"There won't be many surprises. As we are in a better financial position, he will focus his priorities on recovering the economy, education and job creation," he said.
In his speech on Wednesday Tsang is widely expected to fulfil the promise he made during his re-election campaign to reduce taxes on profits and salaries to 15 per cent. The tax on profits for corporations is currently 17.5 per cent and on salaries the standard rate is 16 per cent.
Analysts believe the 63-year-old will also set out strategies to enhance the city's competitiveness and strengthen its status as a top financial centre to fend off threats from rival Chinese cities Shanghai and Macau.
The gambling haven of Macau has been enjoying a casino boom and double-digit growth since, in 2001, it liberalised its monopolistic gaming market once dominated by local tycoon Stanley Ho.
With the recent opening of the Venetian Macau resort, which houses the world's largest casino and a convention centre that is more than twice the size of Hong Kong's, there have been fears the former Portuguese colony will take away tourists and business visitors.
"Facing the threat from Macau, Hong Kong's competitiveness is decreasing. A lot of people are worried about being marginalised. This is something that Donald Tsang would have to address," James Sung, political professor at City University said.
Also at the top of Tsang's agenda will be the growing concerns about the widening wealth gap. Despite the city's booming economy, more than 20 per cent of the population live in poverty, more than double the number two decades ago.
Sung believes Tsang will create jobs by launching construction projects and may also set a minimum wage for low-skilled workers, such as cleaners and security guards.
Cheung, of the Hong Kong University, said the chief executive may strengthen his policies to combat the worsening pollution, which has raised fears the choking smog could hamper tourism and investment.
He is also likely to announce all children in Hong Kong will get 12 years of free education, up from the current nine years.
Sung predicts Tsang will not spend much of his speech on the thorny issue of democracy as a three-month public consultation on political reforms in the city expires on Wednesday.
Half of Hong Kong's 60 lawmakers are chosen directly, while the chief executive is selected by a committee composed mostly of Beijing loyalists.
"The democracy issue remains an empty shell. I believe the government will delay the issue as long as possible, at least until after the legislative council election next year," Sung said. - AFP/ac
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