XN000022-1985-11-18 — Page 2

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MONDAY, NOVEMBER 18, 1985

HK EXPERIENCE A VALUABLE LESSON

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SIR EDWARD

THE HONG KONG EXPERIENCE CAN OFFER A NUMBER OF LESSONS WHICH COULD BE OF VALUE ELSEWHERE IN THE WORLD, THE GOVERNOR, SIR EDWARD YOUDE, SAID THIS (MONDAY) EVENING.

ADDRESSING A DINNER GATHERING OF DELEGATES ATTENDING A SEMINAR ORGANISED BY THE CENTRE FOR STRATEGIC AND INTERNATIONAL STUDIES, SIR EDWARD SAID THE FIRST LESSON WAS THE SUCCESS OF THE HONG KONG COMMUNITY IN BUILDING UP ITS ECONOMY, AND A DISTINCTIVE LIFE-STYLE, AND A CONSTRUCTIVE AND CO-OPERATIVE RELATIONSHIP WITH ITS MAINLAND NEIGHBOUR AND THE REST OF THE WORLD.

+ THE SECOND IS PROVIDED BY THE AGREEMENT ON THE FUTURE OF HONG KONG, HE SAID. THIS GIVES AN ENCOURAGING EXAMPLE OF HOW A COMPLEX INTERNATIONAL ISSUE WHICH RAISED IMPORTANT DEEPLY FELT POINTS OF PRINCIPLE ON BOTH SIDES CAN BE TACKLED AND SUCCESSFULLY RESOLVED.+

+ IN A WORLD WHERE PROBLEMS AND NATIONS OFTEN PROVE SO INTRACTABLE AND INTERNATIONAL DISPUTES LEAD TO SUCH IMMENSE PROBLEMS AND SUFFERING, NOT ONLY FOR THOSE DIRECTLY CONCERNED BUT FOR THE IR NEIGHBOURS TOO, IT IS AN EXAMPLE OF WHAT CAN BE ACHIEVED BY NEGOTIATION WHEN THERE IS A WILL TO SUCCEED AND A SHARED INTEREST IN SUCCESS.

+F INALLY, THERE IS THE LESSON THAT MUCH CAN BE DONE IF THE THINKING OF THOSE INVOLVED IS NOT TRAMELLED BY PRECEDENT AND THE CONVENTIONAL WISDOM OF THE PAST.

+THAT IS THE THOUGHT I WOULD LIKE TO LEAVE WITH YOU AS HONG KONG'S CONTRIBUTION TO YOUR DELIBERATIONS OVER THE NEXT FEW DAYS, HE SAID.

SIR EDWARD OUTLINED THE KEY FEATURES OF THE AGREEMENT, WHICH PROVIDES FOR THE CONTINUATION OF THE ESSENTIALS OF HONG KONG'S LIFE-STYLE AND ECONOMIC SYSTEMS, AND SAID ITS CONCLUSION HAD ENGENDERED A NEW DEGREE OF CONFIDENCE IN HONG KONG.

HE SAID THAT INVESTMENT IN PLANT AND MACHINERY PICKED UP, AND THE PROPERTY MARKET SHOWED SIGNS OF REVIVAL.

+EXPORTS TO CHINA HAVE CONTINUED TO GROW, AS HAVE RE-EXPORTS, HE ADDED.

+OVERALL GROWTH OF OUR GROSS DOMESTIC PRODUCT IN 1985 IS LIKELY TO BE A RESPECTABLE 4-1/2 PER CENT.

+THE LABOUR FORCE IS EFFECTIVELY FULLY EMPLOYED, AND OUR RATE OF INFLATION IS DOWN TO JUST OVER 3 PER CENT, SIR EDWARD SAID.

/+AFTER THRES