XN000022-1976-05-10 — Page 2

MONDAY, MAY 10, 1976

HONG KONG MUST ATTRACT AND RETAIN CAPITAL

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IN ORDER TO KEEP ITS LARGE POPULATION EMPLOYED AND OBTAIN THE REVENUE TO MAKE GOOD THE SOCIAL DEFICIENCIES, HONG KONG MUST ATTRACT AND RETAIN CAPITAL, THE GOVERNOR, SIR MURRAY MACLEHOSE, SAID THIS (MONDAY) MORNING.

SPEAKING AT THE OPENING OF THE YOUNG PRESIDENTS CONFERENCE AT THE CITY HALL, HE STRESSED THAT FREEDOM COUPLED WITH STABILITY WOULD DO JUST THẮT.

THE THEME OF HIS TALK TO THE BUSINESS EXECUTIVES FROM DIFFERENT PARTS OF THE WORLD WAS ON THE OPPORTUNITY OFFERED TO INVESTORS * AND EXPORTERS ALIKE BY THE PROSPECT OF ECONOMIC GROWTH IN THE DEVELOPING COUNTRIES OF THE WESTERN PACIFIC.+

SIR MURRAY NOTED THAT HONG KONG, ALTHOUGH BEING A DEPENDENT TERRITORY, WAS PERHAPS THE EXTREME EXAMPLE OF THE ECONOMY OF SUCH COUNTRIES, AND IT LIES AT THEIR GEOGRAPHICAL AND COMMUNICATIONS CENTRE.+

THE EXPANSION OF HONG KONG'S POPULATION

FROM 600,000 PEOPLE 30 YEARS AGO TO JUST UNDER 4-1/2 MILLION TODAY HAD BROUGHT SOCIAL AND PHYSICAL PROBLEMS KNOWN BY FEW OTHER TERRITORIES.

+NEVERTHELESS, THEY ARE BEING TACKLED WITH VIGOUR AND IN THIS WE ARE HELPED BY THE ECONOMY WHICH HAS GROWN 15 TIMES IN THE LAST 25 YEARS, FROM VERY LITTLE, HONG KONG IS NOW KNOWN THROUGHOUT THE WORLD AS A CENTRE OF INDUSTRY, BANKING, INSURANCE AND SEA AND TELECOMMUNICATIONS AND TOURISM, + HE SAID.

THOUGH THE GOVERNMENT INTERVENED VIGOROUSLY IN ORDER TO MAKE GOOD SOCIAL DEFICIENCIES AND CURB THE CRUDITIES OF UNBRIDLED MARKET FORCES.

WITHOUT THE 40 PER CENT OF THE BUDGET DEVOTED TO SOCIAL PROGRAMMES HONG KONG WOULD BE NEITHER A VERY JUST NOR STABLE SOCIETY. INSPITE OF THESE THINGS HONG KONG DID ENJOY AN EXCEPTIONALLY FREE ECONOMY, WITH NO PROTECTIVE TARIFFS, NO EXCHANGE CONTROLS, RELATIVELY LOW TAXATION AND NO ONEROUS RESTRICTIONS ON BUSINESS.

IN THE CIRCUMSTANCES OF HONG KONG, THE GOVERNOR DESCRIBED THIS AS +A PRAGMATIC NECESSITY OF EXISTENCE RATHER THAN A 19TH CENTURY ECONOMIC PHILOSOPHY REGURGITATED.

HE CONTINUED THAT THE PRACTICE OF FREE TRADE WITHOUT EITHER PROTECTION OR SUBSIDY APPLIED A COLD AND CLEAR DISCIPLINE TO HONG KONG'S INDUSTRY. IT MUST CONCENTRATE ON PRODUCTS IN WHICH IT CAN COMPETE AND IF IT CANNOT COMPETE IT MUST

CHANGE.+

SIR MURRAY POINTED OUT THAT OVER FOUR-FIFTHS OF HONG KONG'S MANUFACTURING PRODUCT WAS FOR EXPORT THE MAIN PRODUCTS BEING CLOTHING AND OTHER TEXTILES, PLASTIC GOODS INCLUDING TOYS, ELECTRONIC PRODUCTS AND ELECTRICAL APPARATUS, OPTICAL GOODS AND WATCHES AND CLOCKS.

/BESIDES