XN000022-1972-03-29 — Page 6

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Wednesday, March 29, 1972

"The remaining $775 million is accounted for by appreciation of

the book value of our investments and an increase in the surplus available

for transfer from the Exchange Fund."

The Financial Secretary said he could not agree with Sir Yuet-keung's

diagnosis that "the Government has exhibited less faith in the resilience

of the Hong Kong economy than the people of Hong Kong themselves.

"We have been surprised at times that the growth rate of the

economy has been so strong, but then the determinants of growth are so largely

external.

"Who would have predicated, for instance, the coincidence in 1969-71

of the following factors: renewal of confidence, inflationary demand

in our major overseas markets, a continuing inflow of funds from abroad,

a re-emergence in a new form of the entrepot trade, a booming tourist industry

and an upward swing of the building industry underpinned by a large number

of long term civil engineering contracts?

Government Policies

"But I can see no evidence whatever of Government policies being

inhibited by nervousness of any kind: only prudence and an anxiety to get

to utilise our resources to the best advantage and to avoid

costly mistakes," he said.

value for money,

"With respect, therefore, to my honourable Friend I honestly do not

think his charge that a deficiency in forward planning, a restrictive financial

policy and a lack of confidence have limited our horizons and frustrated

the realisation of our intentions will stand up to a serious examination,

the Financial Secretary said.

/Replying to ...........