XN000022-1983-06-27 — Page 2

MONDAY, JUNE 27, 1983

HONG KONG PRESENT DAY REALITIES

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THE BRITISH AND HONG KONG GOVERNMENTS REMAIN DETERMINED TO MAKE A SUCCESS OF THE TALKS OVER THE FUTURE OF HONG KONG.

THIS WAS EMPHASISED BY THE GOVERNOR, SIR EDWARD YOUDE, IN HIS OPENING SPEECH ENTITLED "HONG KONG PRESENT DAY REALITIES THIS (MONDAY) EVENING AT THE HONG KONG CONFERENCE OF THE STANFORD RESEARCH INSTITUTE.

+YOU MAY BE ASSURED THAT THERE IS NO ISSUE TO WHICH THE GOVERNOR AND HIS EXECUTIVE COUNCIL ACCORD HIGHER PRIORITY OR TO WHICH THEY DEVOTE MORE TIME AND EFFORT AND THE COMMITMENT OF THE BRITISH GOVERNMENT BOTH TO HONG KONG AND TO THE SEARCH FOR THAT SETTLEMENT....,+ SIR EDWARD SAID.

ON HONG KONG'S IMPRESSIVE ECONOMIC GROWTH, THE GOVERNOR POINTED OUT THAT IT HAD BEEN BASED ON A POLICY UNDER WHICH THE GOVERNMENT HAD DELIBERATELY LEFT THE INDUSTRIAL, COMMERCIAL AND FINANCIAL SECTORS FREE AND UNFETTERED TO COMPETE IN DOMESTIC AND WORLD MARKETS.

THE GOVERNMENT, HE SAID, HAD SOUGHT TO REGULATE ONLY WHERE THE ORDERLY CONDUCT OF BUSINESS, FAIR TREATMENT OF THE WORKFORCE AND THE GOOD NAME OF HONG KONG ŠO REQUIRED.

+BUT WE MUST NOT SUCCUMB TO THE DECEPTIVE TEMPTATION TO SEEK SHORT TERM ALLEVIATIONS OF THE DIFFICULTIES OF PARTICULAR SECTORS WITHOUT CAREFUL CONSIDERATION OF THE SIDE EFFECTS OF THOSE MEASURES AND OF THEIR LONGER TERM IMPACT ON THE ECONOMY AS A WHOLE.

+WE MUST HAVE REGARD TO THE MIDDLE AND LONGER TERM AND TO THE INTERESTS OF THE COMMUNITY AS A WHOLE,+ SIR EDWARD EMPHASISED.

HE POINTED OUT THAT THE HONG KONG GOVERNMENT HAD SHOWN ITS CONFIDENCE IN THE TERRITORY'S FUTURE IN THE MOST PRACTICAL WAY BY CONTINUING ITS OWN INVESTMENT IN A MAJOR PUBLIC WORKS PROGRAMME AND IN FAR REACHING PLANS FOR THE FUTURE.

IT WOULD SPEND $25 BILLION ON APPROVED CAPITAL PROJECTS DESPITE SHORT-TERM BUDGETARY DIFFICULTIES, SIR EDWARD PLEDGED.

FOR THE 1983-84 FISCAL YEAR ALONE, THE GOVERNMENT HAD COMMITTED $3 BILLION FOR NEW CAPITAL WORKS, ABOUT THE SAME ANNUAL AVERAGE OVER THE PAST FOUR YEARS, HE SAID.

BUT HE POINTED OUT THAT THE GOVERNMENT'S ACTUAL EXPENDITURE ON CAPITAL WORKS LAST YEAR WAS $6.5 BILLION, THE HIGHEST EVER, AND THAT THE CURRENT YEAR'S TOTAL WAS EXPECTED TO EXCEED THIS RECORD HIGH BY ABOUT $1 BILLION.

SIR EDWARD STRESSED THAT THE GURES DID NOT INCLUDE THE SUBSTANTIAL SPENDING ON PUBLIC HOUSING WHICH ABSORBED A LARGE PROPORTION OF THE GOVERNMENT'S BUDGET.

/SINCE THE