The Hong Kong Special Administrative Region (HKSAR) government announced on Monday that it will raise its commitment for a loan guarantee scheme aimed at helping small and medium enterprises to 100 billion HK dollars (US$12. 8 billion).

The HKSAR government will also create more than 60,000 job opportunities next year by speeding up infrastructural projects, recruiting civil servants as well as measures that are expected to create temporary posts, said HKSAR Chief Executive Donald Tsang.

Tsang was speaking after the second meeting of the Task Force on Economic Challenges, which was established in late October to help the HKSAR government formulate strategies and plans to battle the current economic challenges.

The task force was headed by Tsang and its members include government officials, bankers, analysts, economists as well as business leaders of key sectors.

The HKSAR government has previously announced a special loan guarantee scheme worth 10 billion HK dollars (1.28 billion HK dollars), in addition to expanding a loan guarantee scheme that has been in place since late 2001 to help small and medium firms.

Hong Kong currently has about 270,000 small and medium-sized enterprises, which represented 98 percent of the enterprises in the finance and trade hub.

Helping small and medium enterprises at present is the key to preventing job loss, Tsang said, proposing to substantially expand the special credit guarantee scheme.

"We will increase our overall commitment for this scheme to 100 billion HK dollars. We will seek the Legislative Council's approval for the enhanced measures as soon as possible and we hope to have them implemented before Christmas," he said.

The maximum loan amount for each firm will rise from one million HK dollars to 6 million HK dollars, with 3 million being revolving credit. The loan can be used for a wider range of purposes. All firms, except listed companies, can apply.

Tsang also announced the HKSAR government's target of providing more than 60,000 job opportunities next year by "making the best use of government funds", while achieving other policy objectives, like promoting environmental awareness and innovation.

Licensing and approval for private sector projects will be sped up, he said.

Tsang said he is working closely with the central government and provincial authorities of the neighboring Guangdong on measures to help Hong Kong-owned enterprises operating in the Pearl River Delta, expand the scope of renminbi business in Hong Kong, extending and introducing schemes that will help attract visitors from the mainland.

Tsang said he hoped the new measures, together with the 2009 budget, which the financial secretary was currently working on, will help address the challenges.

"It requires every one of us to work together," he said.

"Despite all the difficulties ahead we must not lose heart. I am confident when the external environment improves Hong Kong will be among the first to rebound." (7.8 HK dollars = US$1)

Editor: Yan