Hong Kong grows at 6.8% in 2010 helped by Chinese money

The government has been battling with a red-hot property market

Hong Kong's economy has expanded by 6.8% in 2010 as it benefited from business ties with mainland China.

The figures were released as part of the annual budget address by Hong Kong's Financial Secretary John Tsang.

Mr Tsang added that he expects Hong Kong's economy to expand by between 4% and 5% this year.

Hong Kong also unveiled measures to slow inflation and price growth, especially in the real estate market.

Money inflows

Analysts said that Hong Kong has been benefiting from a growing number of affluent visitors from China.

Many of them have been attracted by the weakness of the Hong Kong dollar and low interest rates, which has made it cheaper for them to buy products and investments such as real estate.

Property prices have shot up 60% since the start of 2009 in Hong Kong.

In an effort to cool price growth, Mr Tsang said Hong Kong will ensure that there is a steady supply of land available for purchase and development.

The budget promise comes after the government had taken earlier steps to stop the property market from over-heating

Buyers of luxury property are now only allowed to borrow up to 50% of the purchase price instead of as much as 60%.

The government has also imposed a stamp-duty, or sales tax, whereby home-buyers will have to pay a levy of up to 20% of the property' s value if they sell it within two years.