these are somewhat beretical views in Hong Kong, particularly in the Chinese business and industrial
community. It might be useful to know how widely held Dr. Chung believes them to be.
(b) The Government should offer backing to commercial banks
to enable them to extend long-term, fixed-period and fixed-interest loans to industry, not only for the modernisation of plant and equipment but also for credit facilities in boosting the export of capital goods. Such backing is necessary becausa existing labour- intensive industries are standing on a knife-edge due to competition from lower labour-cost countries. Hore technologically advanced industries requiring greater capital investment are therefore needed. Also, because of competition in consumer goods from nearby countries, it is necessary to change over to the production of
capital goods for the purchase of which customers must be offered long-term credit. (In the officials' reply to
the Budget Debate the Director of Commerce and Industry said that the Goverment would be studying the possibility of establishing a loan institution specialising in helping small-scale industry with medium-term finance at fixed rates for re-equipment).
(c)
The Minister may know that from time to time long Aong has considered the question of establishing an industrial bank, but has hitherto rejected this on the
grounds that funds have never been lacking through normal channels for worth while industrial enterprise. However,
there has been a certain tightening of credit since the banking crisis of 1965 and this has undoubtedly affected the small industrialist. Mr. Cowperthwaite mentioned
this in discussions here last year and said that Hong Kong
would be looking at this problem. It is in this context
that we must view the statement made by the Director of
Commerce and Industry. It seems likely that it did not
go far enough to satisfy Dr. Chung.
Free primary education should be introduced in the Colony
over a period of three to five years.
As the Minister is aware the policy is to provide by 1971 places in Government and aided primary schools for all children wishing to attend such schools and to remit, either in whole or in part, the fees for those who cannot meet the very modest charges in these schools. The
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