XN000022-1980-06-18 — Page 26

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"To do this sucessfully, I feel that we need to clarify our position.

Hong Kong and Britain have frequently misunderstood each other. For my part

I feel that Hong Kong's performance has been underrated by many in this country,

so let me quote the noted economist, Professor Friedman, who was interviewed

recently. He cited the British territory of Hong Kong as an example of the freest

market in the world. He said: The most remarkable performance in the whole Ear

East has been turned in by Hong Kong. Hong Kong has no tariffs, no quotas, no

central bank, no government direction of industry. It has the lowest ratios

of government tax to income in the world. In the past 30 years the population

has multiplied eightfold to 4 million, the average income per capita has

quadrupled so that today Hong Kong has the second highest average income through-

out Asia, exceeded only by Japan. And what is even more surprising, the average

income in Hong Kong is beginning to approach the average income in Great Britain.

"Mr President, Secretary of Stato, My Lords, Gentlemen, we must not

imagine that the future will be easy. The understanding which we seek can be

likened to a delicate flower which needs to be nurturad. Those of us in Hong

Kong who know you understand your intentions but there remain misunderstanding

and even suspicions. However, Mr Secretary, what you have said to us here this

evening will go a very long way to dispelling those unworthy thoughts.

"As I said at the beginning I have great faith in both Britain

and Hong Kong, I am convinced that by working closely together the economic

battles we face can be won and that our joint futures will bring not only

greatly increased economic ties but also a warmer and closer relationship

between our people.

/"On behalf