and on a downward trend.

DSR 11C

Of course, much remains to be done. But though the pace

is more hesitant than we would like to see, the pattern

of improvements is encouraging. A greater realism on

the part of those involved is emerging, a heightened

sense of the links between sensible pay settlements,

productivity, unemployment and the creation of lasting

jobs. A successful trading community such as here in

Hong Kong needs no reminding of these links. But we have

had to reforge the chain; reforge it through our

overall economic policies and the climate they create,

through our control of public spending and borrowing,

through our constant encouragement to management

and unions to learn the lessons of competitiveness

and performance as the key to success. In short, that

the world does not owe them or the United Kingdom a

living.

So much for the general picture. You have in Hong Kong

always had a concern for the recreation of enterprise,

for the emergence of new firms and sectors which reflect

the changing circumstances in your own environment and

that which faces you in other economies. We too have

always been aware of the changes in the patterns of

industrial activity flowing from the constant evolution

of our economies, Western and Eastern, and the need to

ensure that our own economy evolves in response.

Innovation and enterprise are keys to that evolution,

/We

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