7386 D073815 140M 5/74 Cr.P.C. Gp.839/3
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20.
(i) the rapid growth of post war demand in its major export markets, particularly in North America and Western Europe;
(ii)
(iii)
(iv)
(v)
a plentiful supply of labour motivated by sociological attitudes peculiar to an
immigrant society;
an inflow of entrepreneurial and financial expertise from the mainland and, in the early years, an inflow of Chinese capital, mainly from Shanghai.
a stable and efficient colonial government;
and
a general climate favourable to foreign
investment.
Hong Kong's success, against all the odds, has given rise to a settled conviction in the Colony that economic growth is directly attributable to its Government's complete reliance on market forces, particularly evident in the field of monetary management and wages; and on low taxation policies which have preserved its attraction to foreign investment as compared with its Asian neighbours. There is probably some truth in this but the complete explanation is a good deal more complex; and excessive reliance on the prevailing economic orthodoxy may well create unnecessary barriers to further progress.
21.
Criticisms have been levelled against the rigidity with which this conventional wisdom has been applied and the extent to which it is regarded as applicable in an evolving society. In particular:
(a) direct taxation has been consistently low,
narrowly based, and in some circumstances regressive. The link between Hong Kong's economic success and the prevailing tax levels has probably been overstated in the past: and self-imposed fiscal limitations
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