【明報專訊】THE Hong Kong economy is in free fall, with the government forecasting that the city will register its first budget deficit in 15 years. With ample fiscal reserves amounting to more than $1 trillion, the government may have no difficulty supporting itself for one or two years. However, it is unknown how long the internal and external problems troubling the economy will remain. Sino-US rivalry may continue to affect Hong Kong in the long term. Renewed violence over the weekend has also raised concerns about when stability can really be restored in the city. Hostility between China and the US as well as the storm over the extradition bill has brought about structural changes to the ecology of the Hong Kong economy. The government must consider the new situation when managing public finances. However, it must also adhere to principles like ''spend when necessary''. It should not slow down the pace of economic restructuring and the tackling of deep-rooted conflicts in society.