should not be going before the Judicial Committee of the Privy
Council. Neither do I think it should go to Beijing because the
courts there deal with a different legal system and a large number
of cases, e.g., commercial disputes, will be outside the scope of
their experience. As I see it, the solution to the problem lies in
the creation of a Hong Kong final court of appeal. It will be Hong Kong court as distinct from a British court. However, special arrangements may be made for the English judges who are members
of the Privy Council to continue to assist Hong Kong with their
services in a new capacity that is acceptable to China, U.K., and
Hong Kong.
Before 1972, our Exchange Fund and General Reserves were tied to
Sterling under Colonial Regulations and as a result, Hong Kong lost
heavily through the weakness of the pound and through successive
devaluations. In 1972, our Hong Kong dollar broke away from
Sterling and diversified. The diversification of the Fund is being
managed with success and Hong Kong has now become the world's 3rd financial centre. This advantage should be maintained with full vigor. I think that is one of the points the Chinese leaders had in {mind when they spoke about preserving Hong Kong's present status, When the year of 1997 arrives, the Exchange Fund must not be
transferred to London or to Beijing but should be kept locally at all
times or at any other place which Hong Kong itself may determine This will perpetuate the independence of the Hong Kong dollar and continue to strengthen the confidence in Hong Kong by the international commercial community.
China has a population of 1,000 million. Now that China is no longer isolated, this number of people represents an important resource as
well as a tremendous market for consumer goods. The offshore oil and gas, which will come on stream in the near future, will have a
tremendous economic impact on the world. Petroleum products are
now exported by China in small quantities. In 1981, Hong Kong imported from China 20% of her total requirement in petroleum products. This very modest oil export from China signals a start of a steady rise
in the standard of living for the Chinese masses. There is no doubt at all, in my mind, that Hong Kong can assist China in her oil ex- ploration programme in many ways. The importance of Hong Kong to China is undeniable but of course we all realize too that Hong Kong
depends on China for her survival. Could the China offshore oil and
gas tilt the balance of the industrial world one day? .