Hong Kong Braces For 'Volatile' Year

Hong Kong has rolled out a multibillion-dollar package of sweeteners to bolster its economy, as a slowdown in China and rising political tensions deepen its economic woes. David Pollard reports.

Video Transcript:

The term "boom times" in Hong Kong's traditionally vibrant economy has taken on a different meaning lately.

These riots were the worst since pro-democracy protests in December 2014.

And put politics at the top of an economic risk list for Financial Secretary John Tsang.

"We anticipate that political disputes will only intensify over the coming months. Politics and economics are closely intertwined. Political volatility will unavoidably impact our economy."

The comments were unusually blunt for a budget address.

But if somewhat unpalatable, there were multibillion-dollar sweeteners to help them go down.

Tax cuts, property rate waivers and new housing targets to boost an economy where core sectors like trade, property and finance are said to be in trouble.

Protesters outside the chamber, though: unimpressed.

"Hong Kong is facing structural problems ... a one-time sweetener wouldn't help alleviate the anger of Hong Kong people," said Avery Ng, chairman of the League of Social Democrats.

After a stint of surpluses, Tsang said he expected deficits in the coming year.

Growth seems likely to cool from last year's 2.4 percent as it struggles with not only its own problems.

Jeremy Cook of World First:

"The strains coming from domestic China are heading across the sea into Hong Kong. This isn't anything new, but the fact that they've had to take a step in the short term obviously means they are ...knowledgeable of these risks moving forward."

The next big risk: elections due this year, pitting pro-democracy opposition groups against a pro-Beijing establishment.