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2. Hong Kong's success, against all the odds, has given rise to
a widespread belief in influential circles there that economic growth on this scale could only have been achieved by reliance on market forces, particularly evident in the field of monetary manage- ment and wages; and by low taxation policies which have encouraged entrepreneurial energy and preserved the Colony's attraction to investors, both Chinese and foreign. Consequently, although there is considerable appreciation of the need for improvements in social welfare and working conditions, there is anxiety lest these
make such demands on the economy that taxes and costs will rise to
a point at which the Colony ceases to be attractive to investors or competitive in the world markets.
3. The past and present internal policies of the colonial Government must be viewed against this economic and sociological background and in the historical context of post-war Hong Kong.
The administration reinstated after the Second World War faced a
society in ruins. It has since had to grapple, in effect, with a permanent emergency situation (caused by vast and irregular flows of immigrants and a high birth rate). Doubtless the willingness of the population to endure what to Western eyes appear harsh conditions is a major contributory factor in Hong Kong's stability and growth: there has been little or no "reverse-immigration" back to China; virtually no popular move in the Colony for its
reincorporation in China; and very little industrial unrest. But
the commitment of successive Governors to the well-being of the
inhabitants and the efficiency and determination of Hong Kong officials is often overlooked by critics failing to appreciate the scale of the problems to be faced. Despite these, since 1954
the Government has housed 1.95 million of the population in subsidized public housing and introduced virtually free medical
services. In the field of education it has introduced free
universal primary education with plans rapidly to expand secondary education, to increase the number of technical institutes from 1 in 1973 to 5 in 1979 and to increase the full time places in higher education from 7,860 in 1974 to about 22,500 in 1980. The Police Force has been increased by over 30% since the beginning
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