4
REVIEW
'It will I think become evident to Honourable Members as I review the activities of the Government that its philosophy and objectives remain unchanged . . . (In the economic field)...it aims to leave the industrial, commercial and financial sectors free and unfettered to compete in domestic and world markets, regulating only where the orderly conduct of business, fair treatment of the workforce, and the good name of Hong Kong so require. More positively it aims to provide the infrastructure and the environment in which modern techniques and good industrial relations can flourish, and initiative and hard work bring their rewards. Only thus can our economy adjust continuously and grow.'
It is the predictability and continuity of the economic and financial environment taken together with the commercial and social stability given by a strict adherence to the Rule of Law - so that arbitrary decisions or unconstitutional changes are not just unlikely but impossible - which have been essential elements in creating the climate for success.
But restraint from bureaucratic interference is not the soft option arising from passivity; it has never been the basic economic philosophy of Hong Kong just to stand back and let economic forces rip. Sir David Trench, Governor from 1964 to 1971, later reflected that 'Hong Kong's generally laissez-faire economic policies have always been based on considered decisions, not mere paralysis of mind and will.' Prudential supervision and the willingness to regulate if necessary where the animal spirits of capitalism go to excess are both known conditions within which the private sector operates. Not even the most buccaneering of Hong Kong's past or present entrepreneurs would argue that non- interference should mean an absence of any law or regulation.
Yet the secret of Hong Kong's commercial success does not lie in those policies alone; rather they are the soil in which the adaptiveness and skills of managers and workforce alike have flourished. In his first Budget speech, the present Financial Secretary, erstwhile Chairman of Cathay Pacific Airways and of a multinational conglomerate, resident in Hong Kong for over 30 years, publicly proclaimed the Government's faith in the business community and its workforce:
'Our entrepreneurs and industrialists are nimble on their feet, adept at seeking and turning to good account new opportunities, motivated by profits that arise from free markets open to all the talents, and unfettered by heavy taxation. They are well served by our labour force, which too is hard working and highly motivated. Thus in our business community the successful prosper. The unsuccessful are not carried by Government subsidy. Businesses either sink or swim as they adapt to changing competitive conditions. A policy directed towards the survival of the fittest may seem harsh and unfeeling, but it has been shown to be appropriate in the particular circumstances of Hong Kong. As a community we cannot afford to carry industrial or commercial failures.'
Nor should the overall purpose of the Government's free-market approach ever be forgotten or misunderstood. The raison-d'être for it all was encapsulated in a sentence in that Budget speech in 1982:
'It should be clearly understood that the whole long-term purpose of our policy of the encouragement of the creation of wealth is not to enable the rich to get richer, but rather to achieve an improving standard of life in all its aspects for the whole community.' It is the doubling of average real income per head in the decade to 1982, the greatly increased stock of housing, the low unemployment, the introduction of free, compulsory secondary education to 16, the development of a net of social services designed and introduced to catch those individual citizens who through misfortune or disability cannot