Night view of Hong Kong Central district and Victoria Harbour.
Hong Kong aims to cut spending by slashing 10,000 civil service jobs to rein in a rising deficit and plans a big AI push as it navigates headwinds from global economic uncertainty, geopolitical tensions and a weak property market.
"It gives us a clear pathway towards the goal of restoring fiscal balance in the operating account in a planned and progressive manner," said the city's Financial Secretary, Paul Chan, in announcing the financial hub's annual budget.
Chan said 10,000 civil servant jobs would be cut by April 2027, representing a reduction of 2% of the civil service in each of the coming two years. Public sector salaries will also be frozen this year.
Chan said the "reinforced" fiscal consolidation programme would see a cumulative reduction in public expenditure by 7% from now till the fiscal year ending on March 31, 2028.
The spending cut would lay a "sustainable fiscal foundation for future development", he said, after a sharp fall in revenue from land sales left the deficit at HK$87.2 billion, nearly double the previous forecast of HK$48.1 billion.
Separately, in line with China's growing push to develop self-reliance in AI and other high technology sectors including robotics, Chan said Hong Kong would "leverage its strength as an international platform for stepping up the development of the AI industry". The city has earmarked HK$1 billion for an AI Research and development institute.
GLOBAL UNCERTAINTY
Hong Kong's small and open economy
has also been vulnerable to external headwinds, including China's economic slowdown and the tensions between China and the U.S. as President Donald Trump ramps up pressure on Beijing around trade, tech and geopolitics.
Earlier this year, the U.S. imposed additional tariffs of 10% on goods from China and also Hong Kong, which the financial hub's government has criticised, saying Washington has ignored the city's status as a separate customs territory.
Following China's imposition of a powerful national security law on Hong Kong in 2020, a number of officials, including current leader John Lee, were sanctioned, and the city was stripped of its special status as a separate trading entity.
One of Hong Kong's major conglomerates, CK Hutchison , owned by billionaire Li Ka-shing, is also facing pressure from the U.S. over its ports in the Panama Canal, after Trump falsely claimed China is operating the canal.
Hong Financial Secretary, Paul Chan announcing 2025 budget at the Legislative Council on February 26, 2025. Photo: Handout.
"Hong Kong is facing a rather complicated international environment amid changes unseen in a century around the world. The rise of protectionism and unilateralism has resulted in a fragmented global political and economic landscape," Chan said.
Hong Kong's finances have been hurt in the last three years by plunging revenues from land premiums - which developers pay for land use - as home prices tumbled nearly 30%.
The government will not put any commercial sites on sale in the coming year, due to high office vacancy rates and ample future supply, and will consider rezoning some commercial sites to residential sites.
Land sales have traditionally been a main source of income for the government, contributing more than 20% to coffers, a figure that has now slipped to around 5%. Hong Kong's fiscal reserves are now around HK$647.3 billion.
香港將裁減1萬名公務員，人工智慧推動扭轉巨額赤字
香港的目標是透過削減 10,000 個公務員職位來削減開支，以控制不斷上升的赤字，並計劃大力推動人工智慧，以應對全球經濟不確定性、地緣政治緊張局勢和房地產市場疲軟帶來的不利影響。
香港財政司司長陳茂波在宣布該金融中心的年度預算時表示：“這為我們以有計劃和漸進的方式實現恢復運營賬戶財政平衡的目標提供了一條明確的途徑。”
陳表示，2027年4月，裁減1萬名公務員職位，相當於未來兩年每年削減2%的公務員職位。 今年公共部門的薪資也將凍結。
陳表示，「強化」財政整頓計畫將使公共支出從現在到2028年3月31日結束的財政年度累計減少7%。
他表示，此次削減開支將為“未來發展奠定可持續的財政基礎”，因為賣地收入大幅下降，導致赤字達到872億港元，幾乎是先前預測的481億港元的兩倍。
另外，陳表示，隨著中國日益推動人工智慧和機器人等其他高科技領域的自力更生，香港將「利用其作為國際平台的優勢，加速人工智慧產業的發展」。 該市已預留 10 億港元用於人工智慧研發機構。
全球不確定性
香港的小型開放經濟 中國經濟放緩以及美國總統川普在貿易、科技和地緣政治方面加大對北京施壓之際，中國與美國之間的緊張局勢也容易受到外部阻力的影響。
今年早些時候，美國對來自中國和香港的商品加徵 10% 的關稅，香港政府對此提出批評，稱華盛頓忽視了香港作為獨立關稅區的地位。
2020年，中國對香港實施強而有力的國家安全法後，包括現任領導人李家超在內的多名官員受到製裁，香港作為獨立貿易實體的特殊地位也被剝奪。
在川普謊稱中國正在營運巴拿馬運河後，億萬富翁李嘉誠旗下的香港主要企業集團之一的長和集團也面臨來自美國的巴拿馬運河港口壓力。
陳肇始表示，香港面臨的國際環境相當複雜，世界百年未有之大變局，保護主義、單邊主義抬頭，全球政治經濟格局碎片化。
過去三年，隨著房價暴跌近 30%，土地溢價收入（開發商為使用土地而支付的費用）大幅下降，損害了香港的財務狀況。
由於辦公室空置率較高且未來供應充足，政府明年不會出售任何商業用地，並會考慮將部分商業用地重新規劃為住宅用地。
賣地歷來是政府的主要收入來源，佔國庫
收入的20%以上，目前已下滑至5%左右。
香港的財政儲備現約為6,473億港元。
Source: Reuters
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