XN000022-1972-10-18 — Page 15

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Wednesday, October 18, 1972

He said: "It is on this that our prospects for social progress

depend, because the yield from our tax system must be sufficient to finance

the public services, and in large measure at least, our capital works

programmes."

Despite the external trade influences over which Hong Kong had

little or no control, the Governor stressed that the rules of the G.A.T.T.,

which had governed the international trading system over the past 20 years,

had served Hong Kong's interest well.

"The gradual easing of restrictions on trade which they have brought

about over this period has led to an enormous expansion of world trade,

and with it of our own exports.

"With this experience behind us, I think it is right for us to

look to the hopeful signs for the future. And I submit that there are

at least two significant grounds for hope," he said.

In the first place, he said, the major industrial countries have

agreed on a new initiative in trade policy next year under the auspices of

the G.A.T.T. and, at the same time, the newly constituted Committee of Twenty

of the International Monetary Fund will be working on the reform of the

international monetary system.

Secondly, and of more immediate relevance, there are now signs of

renewed though moderate expansion of business activity in North America,

where 45 per cent of Hong Kong's exports go, and Western Europe which is

expected to lead to an acceleration of the growth of world trade in 1973,

he said.

In planning