CONFIDENTIAL

IMMEDIATE

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Guandong, and more widely in Southern China. It will confirm our place at the crossroads of the Asian economy.

To retain our economic strength, we also have to attend to more parochial but important concerns. We have, for example, to continue to battle against inflation. When the public express anxiety about the rate of inflation, they are wholly right to do

Inflation is a cunning enemy, an enemy we ignore at

So.

peril.

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(Next word underlined) Thirdly, it is essential that we remain a low tax economy in which public spending is kept under prudent control. But it is right that we should be free to use some of the wealth we generate as a community to help those of our fellow citizens who fall by the wayside and to make our society ever more civilised. I know how much this community cares about the education of our children, about the care of the elderly, about housing, about the disabled, and about the environment in which we live. My government will attach to these issues the priority they deserve. I look forward to saying more about them in my speech to the Legislative Council in October.

24 (Next word underlined) Fourth, I know how much

I know how much concern has been expressed in the community about law and order. Hong Kong, it

We

is true, is a safer city than most. Yet that is little comfort to the businesses that have been robbed or, worse still, to those families who have been the victims of violent crime. shall be relentless in our fight against crime. We shall be especially tough in our fight against violent crime. The Royal Hong Kong Police Force do a magnificent job. They can count on my staunch support as they go about their sometimes dangerous work. Co-operating closely with the Chinese authorities, we shall work round the clock to beat crime in

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