--we shall secure a community whose freedoms and way of life are protected, and whose institutions are vigorous and effective, drawing their strength from their deep roots within the community itself;
we shall have a Government which gives a clear lead, and which responds promptly to Hong Kong's changing needs and aspirations.
5.
A COMPETITIVE ECONOMY
The success of the economy is central to all our hopes. We must do nothing to jeopardise it. Our prescription for prosperity is straightforward. We believe that businessmen not politicians or officials make the best commercial decisions. We believe that low and predictable taxes are the best form of investment incentive. We believe that government spending must follow not outpace economic growth. We believe in competition within a sound, fair framework of regulation and law.
The Prospects for Growth
6. Despite the economic gloom in many other parts of the world, we have every reason to be optimistic about our prospects. Hong Kong is at the centre of Asia and the Pacific's rapid development—a_historic process which is lifting hundreds of millions of people out of poverty. This is a "trade wind" that promises to sweep the whole region into an economic revolution as great as any seen in Europe or North America since the very start of industrialisation. Our economic future is inextricably bound up with China, and with Guangdong Province in particular. China's extraordinary growth rates have helped to protect Hong Kong against the recessionary conditions which have plagued much of the world economy in recent years. As a result, we are projecting that Hong Kong's annual GDP growth between now and 1997 will average 5% in real terms.
7. But inevitably we face dangers as well as great opportunities. Some are dangers which we cannot ourselves directly control-like the outcome of the talks between the USA and China on market access, for example, or the controversy over the extension of MFN status for
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