THE ECONOMY
develop into higher value-added activities; secondly, quality education, training and retraining that enable the people in Hong Kong to acquire the ability to enter into new and expanding fields; and thirdly, a quality living environment that helps retain local professionals as well as attract overseas talents to build their home and career in Hong Kong, and to create wealth both for themselves and for the economy. The essential ingredients for fulfilling this objective comprise the provision of good and affordable housing, better education, ample cultural and sporting facilities, efficient transport and up-to-date technology.
The Basic Law further stipulates the need to maintain the status of Hong Kong as an international financial centre. The last decade saw remarkable growth in Hong Kong's financial services in banking, securities trading, insurance and fund management. The government will strive to continuously improve Hong Kong's position as a premier financial centre by maintaining a world-class supervisory regime without over-regulation, by providing state-of-the-art financial infrastructure and a well-trained and adaptable workforce, and by sustaining an open market and a level playing field. Underlying this, a sound monetary regime and currency stability are key to investment confidence in Hong Kong as a competitive centre for global finance and business operations.
The government will not seek to influence the economic structure through regulations, tax policies or subsidies. Business decisions are best left to the private sector, except where social considerations are over-riding. Private enterprise will continue to have the maximum freedom to set its own direction, and to explore and seize opportunities in the light of ever-changing market conditions.
Moreover, the government will continue to adhere to prudent fiscal policies, while maintaining a simple tax structure and low tax rate that sustain workers' incentive to work and entrepreneurs' incentive to invest. The 1997 corporate tax rate and standard tax rate 16.5 per cent and 15 per cent, respectively - were low by international standards. The public sector in the economy will remain small and efficient. In the fiscal year 1997-98, public sector expenditure accounted for only around 18 per cent of the GDP. The underlying principle of a small government is to ensure that it will not crowd out an excessive amount of resources from the private sector. In concrete terms, the growth rate of public sector expenditure is to be kept within the trend growth rate of the economy.
Business and Services Promotion
To render the best possible support to the business community, the government has recently embarked on the Helping Business Programme and the Services Promotion Programme. The Business and Services Promotion Unit was set up in the Financial Secretary's Office in May to co-ordinate and support the work of various parts of the government on these two programmes. Its vision is to maintain Hong Kong as the best place in the world for business and the region's premier services centre.
The Helping Business Programme was launched in March 1995 under the aegis of a Task Force chaired by the Secretary for the Treasury with the aim of making the government more business-friendly. The Task Force successfully completed seven pilot studies in 1996–97. Action is in hand to implement the recommendations. In December 1996, a Business Advisory Group chaired by the Financial Secretary was formed to provide a vital link between the business sector and the government. Its membership comprises 11 top business executives and six senior officials. For
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