Close partners: Financial Secretary John Tsang (second right, first row) joins his counterparts at the APEC Finance Ministers' Meeting.

Stimulus measures introduced in Hong Kong to tackle the financial crisis have been bearing fruit, Financial Secretary John Tsang says, adding further improvements in the third-quarter gross domestic product are expected.

Speaking at the Asia-Pacific Economic Co-operation Finance Ministers' Meeting today, he said Hong Kong's stimulus and relief spending amounted to $87.6 billion, equivalent to about 5.2% of the city's GDP.

"We are seeing positive results from the stimulus measures. Our GDP rebounded 3.3% in the second quarter of this year compared to the first quarter. The decline in exports has narrowed. We expect further improvements when our third quarter results are announced," he said.

The springing up of 'green shoots' might be partly the result of the stimulus packages launched so far, he added. 

"We should watch out for the cumulative effect on our financial system of the host of reform measures that are being deliberated in the various international financial institutions in the wake of the financial crisis.

"The last thing that we want to see is a relapse of a credit squeeze in the market as a result of the implementation of the basket of banking-reform measures. There is a need to strike a balance, and definitely, we do not want to nip the 'green shoots' in the bud inadvertently.

"In this respect, there is merit in conducting an impact analysis on the cumulative effect of the various reform measures that are now being contemplated," he said.

Exit strategies

Regional co-operation will help smooth exit strategies and avoid any adverse shocks to recovery, he added. The Hong Kong Monetary Authority has set up a three-way working group with Bank Negara Malaysia and the Monetary Authority of Singapore to work out a smooth exit strategy.

Mr Tsang said 10 major infrastructure projects will enhance Hong Kong's long-term competitiveness - as well as that of the region.

"All these projects will not only upgrade our infrastructure and create employment, they will also enhance our long-term competitiveness and spur economic growth in the region.

"A rough estimate indicates that the 10 mega projects, when fully developed to a mature stage, would bring about US$13 billion of added value to our economy each year, which is equivalent to 5% of our GDP in 2008. About 250,000 jobs would be created," he said.