Page 122 of 233
206
HONG KONG URBAN COUNCIL
the future prosperity, stability and progress of Hong Kong as well as contribute to the four modernizations of China.
Mr. Chairman, with these words I support your motion to welcome the 'Sino-British Joint Declaration on the future of Hong Kong'.
(Mr. H. M. G. FORSGATE, Vice-Chairman, Urban Council left at 5.45 p.m. and Mr. Frederick K. K. FUNG left at 5.48 p.m.)
MR. NELLIE FONG (in English):-Mr. Chairman, recognizing that there will be a change in Hong Kong's future, the joint declaration between U.K. and China on the future of Hong Kong is a good document. An international agreement of this nature between two sovereign States and a commitment of the highest form should certainly be a boost to Hong Kong's confidence. Those people who cannot live with a change will obviously leave Hong Kong no matter what the agreement entails but there are sufficient people who will stay in Hong Kong, accept the change, and give the agreement a try.
Having said that and having an interest to give the agreement a try, and to make the best of what we have in Hong Kong, I do have three comments on the joint declaration.
Firstly, most people welcomed the policy on land leases but I do not, at least not with its entirety. It is of course important that all existing land leases are recognized. But the land policy as proposed restricts the amount of land the government can sell each year and I think this is undesirable. The Hong Kong Government always aims at a balanced budget and the premium received on selling land leases had been ploughed back to Hong Kong in the form of public works and housing. In 1980, land revenue was over HK$10 billion and made up 35.4% of total revenue. Land revenue dropped to HK$2 billion, 7.5% of total revenue in 1983. The difference was so drastic that in 1980 we had a surplus of over HK$10 billion and in 1983 a revised deficit of over HK$3 billion. Let's ask ourselves a number of questions:
Question: In 1983, how much land the government has sold? Answer: It sold about 50 hectares.
Question: In 1984, how much did the government keep? Answer: It kept 100% of the land premium received.
With an expanding economy and increases in government commitments, the agreement restricts the government for the next 13 years to sell in each year the amount of land leases sold in 1983 and to make it worst, the government can only keep 50% of the net proceeds. Then what kind of a deficit would we foresee if all other things remain equal?
In the agreement, there is a provision that a land commission can be formed to monitor and observe the limit of 50 hectares a year and to consider and decide if an increase in the limit is proposed. I see this as a rather restrictive practice and a move towards a monitored and controlled economy. The success of Hong Kong depends on it being a free port and a free economy and a market that is completely dictated by supply and demand. This is certainly demonstrated by the land lease transactions between 1980 and 1983. Since I cannot see how the government's existing commitment in housing, in education, in construction etc. can be decreased, I have serious doubts on the government's ability to keep up its balanced budget if the sale of land leases is restricted. If the burden of the deficit has to be passed onto consumers indirectly or to the taxpayers in the form of taxes, both will be negative effect on the economy.
Secondly, in the agreement, it was indicated that numerous existing policies and practices in Hong Kong would remain, and that Hong Kong could conclude and implement agreements on its own with other countries and international organizations in the various areas to achieve the following:
(1) to remain as a free port with free movement of goods and capital (2) Hong Kong currency continue to circulate and remain freely convertible (3) to retain the status of an international finance centre with no exchange control
(4) to maintain the status as a centre of international and regional aviation and to conclude air service agreements
(5) to develop international economic relations with other countries (6) to issue own passport and travel documents
(7) to participate in the General Agreement on Tariffs and Trade and in the Multifibre Arrangement
(8) to be included in the provisions of the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights.
(9) Etc. Etc.
Many of the above involve the recognition by other countries and international organizations of Hong Kong's special situation. It is therefore imperative that the Joint Liaison Group would work towards reaching these arrangements for Hong Kong.
Thirdly, Annex I to the agreement specified that the laws of the Hong Kong Special Administrative Region shall be the Basic Law, the laws previously in force in Hong Kong and the laws enacted by the Hong Kong Special Administrative Region legislature.
It was further stipulated that the laws previously in force in Hong Kong shall be maintained save for any that contravene the Basic Law; new laws enacted by the Hong Kong Special Administrative Region legislature shall be in accordance with the provisions of the Basic Law; and that the Basic Law shall be enacted by China.
It does seem that the Basic Law has supreme authority over the other laws. It is therefore undoubtedly anxious for Hong Kong people to wish know about
Page 122 of 233
207
HONG KONG URBAN COUNCIL