XN000022-1984-10-16 — Page 20

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TUESDAY, OCTOBER 16, 1984

+ IN PARALLEL, THE VARIETY OF LEGAL, POLITICAL AND OTHER INSTITUTIONAL GUARANTEES, PRESCRIBED NOW OR LATER UNDER THE BASIC LAW, AIM TO MAINTAIN HONG KONG AS A FREE FINANCIAL AND TRADING CENTRE THAT SERVES THE CHINESE AND THE GLOBAL ECONOMY, MR CHAM SAID.

HE SAID THAT A CENTRAL FEATURE OF OUR PRESENT MONETARY SYSTEM AND ITS STABILITY WAS THE VIABILITY AND STRENGTH OF OUR CURRENCY.

+WE SHOULD REALISE THAT A STABLE AND CREDITABLE MONETARY SYSTEM CONSTITUTES A POTENT TOOL THAT ENABLES US TO EXERCISE DISCIPLINE ON OUR ECONOMY.

+ITS EFFICACY AFFECTS STRATEGICALLY OUR ECONOMIC PERFORMANCE, SO THAT THE UNBIASED OPERATION OF THE FUTURE MONETARY SYSTEM, ESPECIALLY IN CONNECTION WITH THE REGULATION OF CURRENCY ISSUE, IS NECESSARY, HE SAID.

FOR THIS REASON, MR CHAM SAID, WE SHOULD TAKE NOTE OF TWO CONDITIONS NECESSARY FOR THE EFFECTIVE WORKING OF THE FUTURE MONETARY SYSTEM.

+FIRST, THE MANAGEMENT AND CONTROL OF THE EXCHANGE FUND MUST BE PRUDENT IN MAINTAINING A MIXED PORTFOLIO OF CURRENCIES AND INSTRUMENTS FREELY DISPOSABLE IN LEADING FINANCIAL MARKETS OF THE WORLD.

+SECONDLY, THE FUTURE MONETARY SYSTEM SHOULD BE KEPT SEPARATE AND DISTINCT FROM THE OFFICIAL FISCAL SYSTEM, EVEN IF THE SPECIAL ADMINISTRATIVE REGION GOVERNMENT IS CHARGED WITH THE MANAGEMENT OF BOTH SYSTEMS UNDER THE DRAFT AGREEMENT, HE SAID.

HE CONCEDED THAT THE INSTITUTIONAL GUARANTEES ABOUT THE BASIC RIGHTS AND FREEDOMS FOR THE INDIVIDUAL LAID THE PILLARS FOR OUR FUTURE STABILITY, PROSPERITY AND HARMONY.

+HOWEVER, THESE MEASURES AND ARRANGEMENTS, EVEN IF REPRESENTED UNEQUIVOCALLY UNDER THE LETTERS OF THE LAW, ARE NO MORE THAN AN EMPTY-SHELL UNTIL AND UNLESS PEOPLE FEEL CONFIDENT THAT THE ECONOMY WILL CONTINUE TO FUNCTION AND THRIVE,+ HE SAID.

+ THE ESSENCE OF OUR ECONOMIC DYNAMICS WILL STILL BE OUR COMMITMENT TO MAINTAIN HONG KONG AS A FREE AND OPEN ECONOMY WHICH SERVE EFFICIENTLY THE CHINESE AND THE GLOBAL ECONOMIES.

+AND THE BATON OF SUCH A POLICY IS STILL THAT ABILITY FOR US TO WORK WITH A FLEXIBLE AND ADAPTIVE PRIVATE SECTOR, BACKED BY LOW TAXATION AND A NON-COERCIVE SYSTEM OF FISCAL AND MONETARY REGULATION.

+LET US STRIVE TOWARDS THIS FUNDAMENTAL OBJECTIVE OF ACCOMPLISHING AND UPKEEPING OUR ECONOMIC SELF-EXCELLENCE, + HE SAID.

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