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WEDNESDAY, APRIL 20, 1977
+WE ALREADY HAVE A PRELIMINARY AND GENERALLY FAVOURABLE STUDY BY CONSULTANTS OF THE FEASIBILITY OF A BRIDGE. BUT BEFORE WE COULD REACH A DECISION ON THE DESIRABILITY OF SUCH MASSIVE INVESTMENT WE NEED A MORE DEFINITIVE AND COMPREHENSIVE STUDY,+ THE FINANCIAL SECRETARY POINTED OUT.
+ IN VIEW OF THE MANY YEARS OF LEADTIME INVOLVED IN THE DEVELOPMENT OF LANTAU, WE THINK IT WOULD BE PRUDENT TO APPOINT CONSULTANTS IN THE NEAR FUTURE TO UNDERTAKE THIS STUDY. IF EXECUTIVE COUNCIL AGREES, A PAPER SEEKING FINANCIAL AUTHORITY FOR THE STUDY WILL BE PUT TO THE FINANCE COMMITTEE OF THIS COUNCIL, + HE SAID.
BUT, THE FINANCIAL SECRETARY WARNED THAT IN HONG KONG'S SITUATION, FORMED AND SERVICED LAND IS, AND ALWAYS WILL BE, A SCARCE AND COSTLY FACTOR OF PRODUCTION AND THAT ITS PRICE WAS BOUND TO REFLECT ITS SCARCITY.
REFERRING TO THE MANAGEMENT OF THE HONG KONG DOLLAR AND THE UNOFFICIALS' CALL FOR INTERVENTION IN MARKET FORCES WHICH IS STRENGTHENING THE HONG KONG CURRENCY AT THE EXPENSE OF THE COMPETITIVE POSITION OF OUR EXPORTS, MR. HADDON-CAVE SAID THAT THIS WAS A DIFFICULT MATTER.
HE SAID THE HONG KONG GOVERNMENT ADHERED TO THE POLICY OF +POSITIVE NON-INTERVENTIONISM + IN MARKET FORCES, BUT, HE ADDED, THIS PHILOSOPHY WAS COUPLED WITH A VIEW THAT THE GOVERNMENT HAD CERTAIN QUITE SPECIFIC OBLIGATIONS TO PURSUE A MONETARY POLICY THAT WAS NOT DAMAGING TO THE ECONOMIC WELL-BEING OF HONG KONG.
+WE HAVE A DELIBERATE, IF LIMITED, POLICY OF INTERVENTION IN THE FOREIGN EXCHANGE MARKET, + HE POINTED OUT.
BUT, HE EXPLAINED THAT INSTITUTIONAL CHANGES AND EXCHANGE RATE POLICIES AS SUCH CANNOT INSULATE US FROM THE EFFECTS OF ECONOMIC DEVELOPMENTS IN THE REST OF THE WORLD.
+ IF THERE IS A TENDENCY FOR STRONG CAPITAL INFLOWS INTO HONG KONG TO STRENGTHEN AND SUSTAIN THE EXCHANGE RATE, AGGRESSIVE DEPLOYMENT OF THE EXCHANGE FUND'S RESOURCES WILL NOT REMOVE THE PROBLEM,+ HE SAID.
+WE CAN ONLY TRY TO RESPOND, AS BEST WE CAN IN OUR CVERALL INTERESTS, + HE ADDED.
IN THE LONG RUN, THE RESULTS WILL ALWAYS BE THE SAME. BUT IN THE SHORT RUN, WE HAVE A CHOICE TO MAKE.
+ IN A WORLD OF FLOATING EXCHANGE RATES IT WOULD BE DANGEROUS FOR US TO PEG OUR CURRENCY TO ONE RESERVE CURRENCY.
THE DIFFICULTIES INHERENT IN MANAGING A FLOATING RATE HAVE LED US TO OUR POLICY OF LEAVING THE RATE TO BE DETERMINED BY LONG RUN FACTORS IN THE MARKET WITH INTERVENTION BY THE EXCHANGE FUND ONLY OCCURING WHEN WE JUDGE THE RATE TO BE INFLUENCED BY WAYWARD OR ERRATIC FACTORS.+
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