XN000022-1987-03-18 — Page 13

WEDNESDAY, MARCH 18, 1987

11

WARNING AGAINST UNSCRUPULOUS OVERSEAS INVESTORS

*****

THE HON STEPHEN CHEONG TODAY (WEDNESDAY) WARNED THAT SOME +LESS THAN PRUDENT OVERSEAS INVESTORS WERE OUT TO MAKE A +QUICK BUCK+ IN HONG KONG.

SPEAKING DURING THE BUDGET DEBATE, MR CHEONG SAID BASED ON WHAT HE HAD HEARD AND READ SO FAR, THERE DID NOT SEEM TO BE MUCH MONEY BEING BROUGHT IN FROM ABROAD FOR HUGE INVESTMENTS.

HE SAID THAT RIGHTS ISSUES WERE ARRANGED OR TO BE ARRANGED IN MIND-BOGGLING SUMS DESIGNED TO REDUCE GEARING RATIOS WITH LOCAL MONEY AND HE FELT DUTY-BOUND TO URGE THE GOVERNMENT TO BE FULLY AWARE OF THE DANGERS OF A SELF-BLOWN BALLOON BEING BURST THROUGH

INDISCRIMINATE OVERSTRETCH ING.

+AS WE MAY FACE UNCONTROLLABLE OR UNFORESEEN EXTERNAL FACTORS, HONG KONG CERTAINLY CAN ILL-AFFORD ANOTHER MAJOR SETBACK PRECIPITATED BY LESS THAN PRUDENT WHEELER DEALERS, HE WARNED.

MR CHEONG STRESSED THAT THE ECONOMY NOW OR EVEN IN FUTURE SHOULD BE BUILT ON SOLID FOUNDATIONS SUCH AS TRADE AND INDUSTRY.

HE SUGGESTED THAT TRADERS AND INDUSTRIALISTS SHOULD BE ENCOURAGED TO EXPAND THEIR ACTIVITIES AND INCREASE THEIR INVESTMENTS.

HE NOTED THAT RESULTS OF REVIEW STUDIES COMMISSIONED BY THE GOVERNMENT ON VARIOUS INDUSTRIAL SECTORS ALL POINTED TO ONE HANDICAP EXPERIENCED BY INDUSTRIALISTS THAT OF DIFFICULTIES IN OBTAINING THE NECESSARY FINANCIAL SUPPORT FOR THE IR EXPANSION AND UP-GRADING PROGRAMMES.

HE URGED THE GOVERNMENT TO TAKE A CLOSE INTEREST IN THIS AND SAID IT WAS HIGH TIME THAT THE IMPORTANCE OF INDUSTRY TO HONG KONG SHOULD NOT JUST BE RECOGNISED BY EMPTY WORDS BUT ALSO BY SOME WELL-BALANCED AND WELL THOUGHT-OUT ACTIONS,

ON THE BUDGET ITSELF MR CHEONG PRAISED THE FINANCIAL SECRETARY FOR BEING +EXTREMELY PRAGMATIC+ AND SAID THIS DISPLAY OF PRAGMATISM AND CAUTION UNDERLINED HIS WEALTH OF WISDOM.

HE SUPPORTED THE BASIC PHILOSOPHIES ADOPTED IN THE BUDGET SPEECH AND COMMENTED THAT THE CALL FOR A DEBATE ON THE RATIO OF DIRECT AND INDIRECT TAXATION WAS TIMELY.

HOWEVER, HE DID NOT THINK IT WISE TO EVENTUALLY MOVE THE RATIO BEYOND 50-50, SUGGESTING INSTEAD THAT THE SMALL SWING MARGIN OF 10 PER CENT SHOULD BE INITIALLY EXPLORED WITH THE AIM OF LEVYING A HEAVIER BURDEN ON CONSUMPTION OF LUXURIOUS ITEMS.

MR CHEONG ALSO AGREED WITH THE FINANCIAL SECRETARY THAT A MORE CAUTIOUS STEP SHOULD BE TAKEN OF THE FUTURE ECONOMY.

/HE NOTED ******