| Abstract | Fiscal stimulation through increased infrastructure spending has long been regarded as a common means to cushion an economic downturn. The Hong Kong Special Administrative Region (SAR) Government's grand infrastructure plan, which is estimated to cost HK$235 billion and will take place in the five years following 1998, was emphasised in the SAR Chief Executive's 1998 policy address as a measure to alleviate economic pain and create jobs. Hong Kong is now undergoing a cost adjustment process to restore its competitiveness, a process which also requires the territory to slash its trade account deficit and reduce its overall reliance on foreign funds. Limited labour mobility across different sectors in Hong Kong also makes the objective of creating jobs for local residents less effective. The article introduces the grand infrastructure plan of Hong Kong. Also, its effects on external balance, on unemployment and growth, as well as on government finance are featured. |
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