Hong Kong yet to emerge from financial crisis

Posted: 28 June 2009 1808 hrs

Residential property (top-R) on Victoria Peak overlooks the skyline of Hong Kong

HONG KONG: Hong Kong has still to emerge from the effects of the global economic slowdown despite early signs of returning stability, the city's chief executive Donald Tsang has said.

Tsang said that big challenges remained for the city, whose key industries of finance and exports have been hit hard by the crisis.

"There is no doubt we have yet to emerge from the impact of the financial tsunami," he said on local broadcaster RTHK's weekly Letter to Hong Kong.

"While recent statistics have shown some signs of economic stability returning, there are still many uncertainties in the global market."

He said reforms put in place after the Asian Financial Crisis of 1997 meant Hong Kong had not suffered a breakdown in its financial system.

He said that the latest crisis presented similar opportunities to improve the city's economic fundamentals.

The government has pointed out six sectors the city should focus on -- including education and environmental industries.

Tsang countered accusations that such directives went against Hong Kong's free market economic principles.

"Hong Kong has thrived as a free and open market. This must and will continue," he said.

"At the same time, increasing globalisation and regional competition have resulted in a need for a strong government role in facilitating economic development.

"So, we are not picking winners. Rather, we are providing a more favourable environment for industries to become even bigger winners than they are now."

Hong Kong fell into recession in the third quarter of 2008 and in May the government slashed its growth forecast for this year, saying the economy would contract 5.5-6.5 percent in 2009, from a previous forecast of 2.0-3.0 percent.

- AFP/ir

From ChannelNewsAsia.com; see the source article here.

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Why a ‘blood transfusion’ may not work

The other day, we had our communication session, and I was having a small discussion with one of our teammates, and how some of the management decisions seemed inconsistent with the drive to reduce cost, especially during these hard times. And that is exactly what this article is discussing: retrenching 'experienced' workers, then hiring new blood… may not be warm blood after all, and even then, may not be warm enough to bring about the heat to induce the much-needed energy to propel changes – for the better.

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IT MAY be a time-tested policy, but the "blood transfusion" approach — retrenching workers during a downturn and hiring new ones when the good times return — may not be in the company's best interests these days.

Instead, companies should look at ways to manage costs and retain existing manpower, said labour chief Lim Swee Say.

"The blood transfusion method means that at the company level, you're going to lose a lot of experience, a lot of skill and time... it takes time to hire and retrain new workers. And if you're in a knowledge-based economy, the time needed to retrain new entrants will be much longer compared to a labour-intensive operation. It's better to upgrade and restructure with your existing workforce," said Mr Lim.

Companies restructuring operations should focus on reskilling, upskilling and multi-skilling existing workers while keeping their wage costs down, he added. This would lead to a win-win situation for workers, companies and Singapore's economy.

    The seminar also saw human resource experts offering some tips on how to manage employees during a downturn. CHANNEL

NEWSASIA, 938LIVE

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From TODAY, News – Thursday, 07-May-2009

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