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Last Updated: Wednesday, 10 October 2007, 12:12 GMT 13:12 UK
Hong Kong tax cut to boost growth
Hong Kong
Hong Kong wants to attract more investment
Hong Kong has said it will cut taxes, in a move to promote further growth and lure foreign investment.

Leader Donald Tsang said taxes would be cut by 1 percentage point, to 16.5% for firms and 15% for individuals, in the first policy speech of his new term.

In addition, HK$250bn ($32bn; 15.7bn) is to be spent on infrastructure.

Hong Kong's boom comes amid wider growth in Asia that has sent stock indexes to new highs. Earlier in the day, India's Sensex set a new record.

The Mumbai-based index added 378.79 points or 2.07% to reach an intraday high of 18,659.03, ahead of a record level set a day earlier.

Robust economy

In announcing the tax cuts, Mr Tsang said: "We will consider further profits tax relief if our economy remains robust and our public finances stay sound."

The newly-announced infrastructure plans include links between Hong Kong, which became a Chinese "special administrative region" in 1997, and China itself by rail, as well as more local transport.

Such projects are tipped to create 250,000 jobs and, Mr Tsang said, could boost the economy by some HK$100bn yearly.

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