XN000022-1984-11-12 — Page 4

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MONDAY, NOVEMBER 12, 1984

IT WAS NATURAL THAT THE IMPLEMENTATION OF SOME OF THE PROVISIONS OF THE AGREEMENT SHOULD REQUIRE FURTHER WORK, HE SAID.

AS AN EXAMPLE, HE SAID ONE OF THE FIRST TASKS OF THE JOINT LIAISON GROUP WOULD BE TO CONSIDER ACTION TO BE TAKEN BY THE BRITISH AND CHINESE GOVERNMENTS TO ENSURE THE MAINTENANCE OF HONG KONG'S PARTICIPATION IN THE GATT, THE MFA AND OTHER INTERNATIONAL ARRANGEMENTS.

+BUT THE AGREEMENT ITSELF IS A SUBSTANTIAL AND THOROUGH DOCUMENT WHICH COVERS A GREAT DEAL OF GROUND IN THE NECESSARY DETAIL, HE ADDED.

HE BELIEVED THAT THE AGREEMENT HAD REMOVED THE PALL OF ANXIETY AND UNCERTAINTY ABOUT THE FUTURE WHICH HAD HUNG OVER THE PEOPLE OF HONG KONG IN THE PAST TWO YEARS.

+AS A RESULT, I ENVISAGE RENEWED CONFIDENCE IN MAKING PROFITABLE INVESTMENTS IN PROPERTY AS WELL AS IN PLANT AND MACHINERY, HE SAID.

HE PREDICTED THAT THE MANUFACTURING SECTOR, LARGELY IN RESPONSE TO MARKET FORCES, WOULD MOVE PROGRESSIVELY INTO HIGHER QUALITY AND MORE SOPHISTICATED PRODUCTS INVOLVING MORE ADVANCED TECHNOLOGY.

FOR THIS TO HAPPEN, HE SAID, NOT ONLY WOULD INVESTMENT IN THE MOST UP-TO-DATE PLANT AND MACHINERY BE REQUIRED, BUT CONTINUED EFFORTS TO IMPROVE THE EDUCATION AND TRAINING OF THE LABOUR FORCE AT ALL SKILL LEVELS WOULD BE ESSENTIAL.

HOWEVER, SIR JOHN STRESSED THAT FIRMS AND INDUSTRIES WOULD STILL HAVE TO STAND ON THEIR OWN FEET.

HE SAID, PUBLIC FUNDS WILL NOT BE USED TO REVERSE THE CONSEQUENCES OF COMMERCIAL MISADJUSTMENTS OR MISFORTUNES, NOR WILL THEY BE USED DIRECTLY TO SUBSIDISE OR ASSIST PARTICULAR ÉCONOMIC SECTORS.+

THE PRESENT POLICY OF MINIMUM INTERVENTION IN THE PRIVATE SECTOR WOULD CONTINUE, BUT IT WAS THE GOVERNMENT'S JOB TO PROVIDE AN INFRASTRUCTURE BASE ON WHICH PRIVATE ENTERPRISE COULD CONTINUE TO FLOUR ISH, HE SAID.

ON THE RAPID AND SIGNIFICANT EXPANSION OF HONG KONG'S TRADING AND COMMERCIAL LINKS WITH CHINA IN RECENT YEARS, SIR JOHN BELIEVED THERE WAS CONSIDERABLE SCOPE FOR FURTHER LINKS AND COOPERATION, TO THE BENEFIT OF BOTH ECONOMIES.

+CHINA IS ALREADY THE THIRD LARGEST MARKET FOR OUR DOMESTIC EXPORTS, AND IS LIKELY SOON TO BECOME THE SECOND, HE SAID.

HE ADDED THAT HONG KONG'S ROLE AS AN ENTREPOT FOR CHINA SHOULD ALSO STRENGTHEN FURTHER.

/+OUR UNPARALLELED