XN000022-1978-04-03 — Page 4

MONDAY, APRIL 3, 1978

+EIGHTH A SOCIETY WHICH IS STABLE, BECAUSE IT DOES NOT SUFFER FROM THE STRAINS OF INTERNAL PARTY POLITICAL CONFLICTS AND BECAUSE ITS GOVERNMENT ACCEPTS THE DUTY TO PROTECT ITS INHABITANTS AGAINST DISABILITY, AGE AND HARDSHIP.

+NINTH, OUR ABILITY TO ATTRACT CAPITAL. THIS IS FOUNDED UPON OUR LOW RATE OF TAXATION (17 PER CENT FOR CORPORATE PROF ITS AND 15 PER CENT ON SALARIES): UPON THE ABSENCE OF EXCHANGE CONTROL, SO THAT ANYONE, RESIDENT OR NOT, CAN MOVE HIS MONEY INTO AND OUT OF HONG KONG TO ANY PART OF THE WORLD AS HE WISHES- AND TO THE MAINTENANCE OF A FREE PORT, SO THAT TRADERS CAN

IMPORT AND EXPORT WITHOUT ANY RESTRICTION IMPOSED BY HONG KONG, EXCEPT FOR SUCH EXPORT CONTROLS AS WE ARE OBLIGED TO OPERATE AT THE BEHEST OF IMPORTING COUNTRIES.

+TENTH, THE DEVELOPMENT OF A SOUND INFRASTRUCTURE. I HAVE MENTIONED THE DEVELOPMENT OF THE PORT, WHICH PROVIDES, FOR EXAMPLE, SUPERB CONTAINER FACILITIES. AIR FREIGHT SERVICES HAVE ALSO DEVELOPED TO A POINT AT WHICH UP TO 25 PER CENT BY VALUE OF OUR EXPORTS GO OUT BY AIR. THE FINANCIAL, BANKING AND INSURANCE FACILITIES, WHICH ARE INDISPENSABLE TO INTERNATIONAL TRADE, WERE WELL DEVELOPED TO SERVE THE ENTREPOT TRADE IN PRE-WAR DAYS AND HAVE EXPANDED TO MEET THE WIDER REQUIREMENTS OF A SUBSTANTIAL INDUSTRIAL AND TRADING CENTRE. INDEED, FINANCIAL AND BUSINESS SERVICES ACCOUNT FOR ABOUT 20 PER CENT OF HONG KONG'S GROSS DOMESTIC PRODUCT.+

SIR DENYS SAID HE BELIEVED THAT THESE FACTORS SHOULD ENSURE THAT HONG KONG WOULD CONTINUE TO SUCCEED AS AN INTERNATIONAL TRADER IN THE YEARS AHEAD, +IN THE ABSENCE OF ARTIFICIAL RESTRAINTS UPON US.+

14