XN000022-1985-03-31 — Page 9

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SUNDAY, MARCH 31, 1985

+ IT IS THE KEY TO OUR EXISTENCE AS AN INTERNATIONAL FINANCIAL AND COMMUNICATIONS CENTRE AND I BELIEVE THAT IT SHOULD BE FOSTERED, HE ADDED.

MR JACOBS STRESSED THAT HE WAS NOT UNAWARE OF THE ENORMOUS IMPORTANCE OF THE CHINESE CULTURAL BACKGROUND AND THAT THIS BACKGROUND WAS AND MUST ALWAYS BE A FEATURE OF HONG KONG'S LIFE.

+BUT WE CAN HAVE THE BEST OF BOTH WORLDS, AND WE SHOULD CERTAINLY DO EVERYTHING IN OUR POWER TO ENSURE THAT WE DO SO IF WE WISH TO PRESERVE OUR WAY OF LIFE, HE SAID.

REVIEWING THE HONG KONG ECONOMY OVER THE PAST FEW DECADES, MR JACOBS SAID HONG KONG'S GROSS DOMESTIC PRODUCT HAD GROWN ON AVERAGE AT OVER EIGHT PER CENT PER ANNUM IN REAL TERMS FROM 1961 TO DATE. GDP PER CAPITA HAD GROWN AT OVER SIX PER CENT PER ANNUM.

+GROWTH RATES OF THIS ORDER SUSTAINED OVER SUCH A LONG

PERIOD ARE ALMOST WITHOUT PARALLEL, + MR JACOBS SAID.

MR JACOBS SAID THAT THE HONG KONG GOVERNMENT HAD SEEN ITS ROLE AS BEING THE PROVIDER OF A FARMEWORK FOR HONG KONG'S ENTREPRENEURIAL FLAIR.

MR JACOBS SAID THE POLICY ROUTE CHOSEN AND CONSISTENTLY ADHERED TO HAD BEEN TO ALLOW, AS FAR AS POSSIBLE, THE FREE OPERATION OF MARKET FORCES.

AND THE FISCAL SYSTEM, HE SAID, HAD BEEN DELIBERATELY DESIGNED TO MINIMISE ANY ADVERSE EFFECTS ON THE INTERNAL COST-PRICE STRUCTURE, ON THE SUPPLY OF HUMAN EFFORT AND ON PRIVATE INVESTMENT DECISIONS.

ANOTHER FACTOR RELEVANT TO HONG KONG'S SUCCESS WAS CONFIDENCE, MR JACOBS SAID.

IT IS NOT ENOUGH MERELY TO PROVIDE A FRAMEWORK PEOPLE MUST BE WILLING AND ABLE TO MAKE USE OF IT. THIS THEY WILL ONLY DO IF THEY HAVE CONFIDENCE THAT THEY WILL BE ABLE TO CARRY ON THEIR BUSINESSES IN AN ACCEPTABLE ENVIRONMENT, HE SAID,

THERE WAS THEREFORE A NEED FOR THE GOVERNMENT TO ADHERE TO A STABLE POLICY WHICH INCLUDED A COMMITMENT TO THE MAINTENANCE OF THE FREE FLOW OF GOODS AND CAPITAL.

MR JACOBS FELT THAT THE SINO-BRITISH JOINT DECLARATION ON THE FUTURE OF HONG KONG SHOULD HAVE TWO SPECIFIC EFFECTS IN THE SHORT TERM AND PROBABLY BEYOND, BOTH WITH POSITIVE IMPLICATIONS FOR THE ECONOMY.

THE ASSURANCES OF STABILITY AND CONTINUITY SHOULD HAVE A POSITIVE INFLUENCE ON THE PERCEPTION OF HONG KONG HELD BY INVESTORS, BOTH LOCAL AND OVERSEAS.

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