Chen Maobo: In the future, many high-quality companies will be listed in Hong Kong, leading to cautious optimism in the development of the stock market.

Paul Chan Mo-po, Financial Secretary of Hong Kong, in his fourth year in office, said in a radio interview that he is cautiously optimistic about the economic situation in the second half of the year and believes that the targets set at the beginning of the year can be achieved. He pointed out that Hong Kong's economy grew by 5.9% year-on-year in the first quarter, and preliminary data shows that exports performed well in the second quarter, with retail and catering stabilizing and improving. He also mentioned that the asset market is stable and believes that consumer spending can be sustained, boosted by major events. Regarding the impact of the Middle East situation on oil prices, Paul Chan Mo-po said that Hong Kong's economy is relatively less affected compared to other economies, as Hong Kong's main industry is the service sector and most of its energy supply comes from the mainland. However, the government will not underestimate the impact, as it may affect prices. The government has raised its basic inflation rate forecast for this year from 1.7% to 2.5% and will closely monitor the situation for dynamic assessment and provide support when necessary. The two-month diesel subsidy plan introduced to mitigate the impact of high oil prices will end at the end of this month. In terms of financial conditions, Paul Chan Mo-po said that the growth in profits tax is good and there is currently no need to adjust the financial forecast. He is confident that the operating accounts for this fiscal year will be in surplus. However, due to the acceleration of development in the northern metropolitan area, the government will continue to invest approximately HK$120-130 billion in infrastructure each year in the coming years. He estimated that the capital account will still be in deficit, and the government will continue to issue bonds. He emphasized that government debt represents about 14% of the GDP, which is a stable and safe level, and the proceeds from bonds will be invested in the future and will not be used for regular expenses. Regarding the stock market, Paul Chan Mo-po believes that in addition to observing the index, attention should also be paid to trading volume. The average daily trading volume of Hong Kong stocks was HK$250 billion last year, recording a significant increase year-on-year. Some days this year exceeded HK$300 billion, indicating large trading volumes and capital flowing in from all directions. Over 60 new stocks have been listed in Hong Kong so far this year, raising over US$20 billion. He believes that many high-quality companies will list in Hong Kong in the future and capital will follow, leading to cautious optimism about the development of the stock market. In response to the China Securities Regulatory Commission's announcement last month to crack down on illegal cross-border securities activities, Paul Chan Mo-po believes that this will not have a major impact on Hong Kong's long-term competitive advantages. The government is also negotiating with mainland Chinese agencies to further optimize cross-border wealth management schemes. The plan to establish an offshore RMB venture capital fund in Hong Kong is aimed at guiding more offshore RMB funds to target industries, and government investment is seen as a good endorsement for attracting investment. He described funds from Europe, America, and the mainland as important participants in the Hong Kong market, stating that the government will strengthen and enhance relationships and exchanges in various ways. Paul Chan Mo-po pointed out that there are three main engines worth noting for Hong Kong's future economic development: trade, finance, and technology and innovation industries. In the field of artificial intelligence, efforts are being made to promote computing power, infrastructure, application scenarios, and data development to empower industry upgrading and transformation with AI. He also said that the government is continuously improving the efficiency of public financial resources, believing that the property market will stabilize and improve. The government will closely monitor the situation and accelerate land supply if necessary. Regarding the government's decision to reserve HK$4 billion to purchase the ownership rights of Wang Fuk Estate, Paul Chan Mo-po said that the use of public funds is a special case to give residents a choice, and if additional funding is needed, the government will apply to the Legislative Council.