XN000022-1977-03-31 — Page 2

THURSDAY, MARCH 31, 1977

GOVT URGED TO EXERCISE MORE INFLUENCE ON MARKET FORCES

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THE GOVERNMENT SHOULD EXERCISE MORE INFLUENCE ON MARKET FORCES, ESPECIALLY WHEN THEY AFFECT THE COMPETITIVENESS OF HONG KONG'S EXTERNAL TRADE.

THIS WAS SUGGESTED BY THE HON. LYDIA DUNN DURING THE RESUMED BUDGET DEBATE IN LEGISLATIVE COUNCIL TODAY.

MISS DUNN SAID SHE FULLY SUPPORTED THE VIEW THAT A FREE COMPETITIVE SYSTEM ALLOCATED RESOURCES MOST EFFICIENTLY AND MAXIMISED REAL INCOMES.

HOWEVER, SHE WONDERED IF HONG KONG COULD SIMPLY AFFORD TO RESPOND TO EVENTS +AS WE MOVE INTO THE LATE 70S AND 80S, AS OUR ECONOMY DIVERSIFIES AND AS WE BECOME MORE AND MORE INFLUENCED BY THE DESTABILISING FORCES OF THE WORLD'S MONETARY SYSTEM+.

WHILE REALISING THAT HONG KONG'S CIRCUMSTANCES WERE QUITE DIFFERENT FROM THOSE OF ITS COMPETITORS, MISS DUNN FELT SHE HAD GENUINE DOUBTS ABOUT THE GOVERNMENT'S POLICY IN LAND SALE, PARTICULARLY FOR INDUSTRY, AND MANAGEMENT OF THE HONG KONG DOLLAR.

SHE SAID THAT THE FINANCIAL SECRETARY HAD ADMITTED IN HIS BUDGET SPEECH THAT THE GOVERNMENT HAD BEEN UNABLE SO FAR TO DEVISE A LAND PRODUCTION PROGRAMME. THIS MEANT THAT THE GOVERNMENT DID NOT HAVE A PROGRAMME OF PRODUCTION OF LAND FOR SALE, SHE ADDED.

THE FINANCIAL SECRETARY, SHE WENT ON, SEEMED TO HAVE ADMITTED THAT LAND FOR SALE WAS SIMPLY EQUAL TO WHAT IS LEFT OVER AFTER PUBLIC USES HAVE BEEN SATISFIED FROM CLEARANCES, RESUMPTIONS AND RECLAMATIONS+.

+WHAT WORRIES ME IS THAT THIS APPROACH IMPLIES THAT THE GOVERNMENT REGARDS SUCH LAND AS SIMPLY AN ASSET FOR SALE FOR REVENUE PURPOSES, YET LAND IS A VITAL FACTOR OF PRODUCTION,+ MISS DUNN EMPHASISED.

THE UNOFFICIAL MEMBER FELT THAT IN VIEW OF THE RESTRICTED USER CONDITIONS, THE CONCEPT OF INDUSTRIAL ESTATES COULD NOT FILL THIS NEED.

+WE NEED A MORE COMPREHENSIVE APPROACH TO THE PRODUCTION AND USE OF LAND, WITH THE NEEDS OF THE PRIVATE AS WELL AS THE PUBLIC SECTORS BEING PROPERLY CATERED FOR, SHE SAID,

ON MANAGEMENT OF THE HONG KONG DOLLAR, MISS DUNN ENDORSED THE FINANCIAL SECRETARY'S POLICY OF USING THE RESOURCES OF THE EXCHANGE FUND TO SMOOTH OUT +SHORT-TERM WAYWARD AND ERRATIC FLUCTUATIONS+ IN THE EXCHANGE RATE, BUT NOT TO ACT AGAINST THE +UNDERLYING TREND+.

/NONETHELESS,