XN000022-1991-07-04 — Page 23

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THURSDAY, JULY 4, 1991

VICKY MCLAUGHLIN (REUTERS): SO IN YOUR DREAMS IT WOULD BE 100

PER CENT.

THE GOVERNOR: NO IN MY DREAMS IT WOULDN'T BE A HUNDRED PERCENT BECAUSE THAT WOULD MEAN SIMPLY HANDING IT OVER TO THE PRIVATE SECTOR. UNDER CERTAIN SCENARIOS THERE IS NOTHING WRONG WITH THAT, BUT A PROJECT OF THIS SIZE COMPLEXITY HAVING TO MATCH INTO OTHER BIG GOVERNMENT PROJECTS LIKE ROADS THEN YOU'D PROBABLY NEED A DEGREE OF GOVERNMENT INVOLVEMENT.

AL REYES (ASIAWEEK MAGAZINE) : : SIR DAVID, BACK TO FINANCES, IS HONG KONG IN FOR A FEW YEARS OF DEFICIT SPENDING AS WE GET UP TO 1997?

THE GOVERNOR :

NO.

THE ESTIMATES THAT THERE ARE, MEAN THAT AT SOME STAGES WE WILL BE DRAWING ON OUR RESERVES, BUT I THINK IT IS IMPORTANT TO LOOK AT IT AS MONEY WHICH HAS BEEN SAVED UP FOR A PARTICULAR PROJECT WHICH YOU THEN USE. NOW, SOMETIMES PEOPLE CAN PUT THAT AS DEFICIT SPENDING, AS THOUGH THAT WAS A BAD THING, BUT THAT WOULD BE REALLY THE SAME AS IF YOU PUT MONEY INTO YOUR BANK ACCOUNT TO SAVE UP FOR BUYING A NEW APARTMENT AND NEVER USED IT. YOU PUT IT THERE FOR A PARTICULAR PURPOSE AND YOU THEN USE IT. IN THE SAME WAY WE HAVE BEEN BUILDING UP OUR RESERVES AND WE WILL BE USING SOME OF THOSE RESERVES FOR THE AIRPORT PROJECT. THAT'S WHAT THEY'VE BEEN PUT THERE FOR.

AL REYES : SECOND QUESTION, WAS THERE ANY REASON WHY THE HONG KONG GOVERNMENT COULD NOT HAVE SENT A REPRESENTATIVE IN THE LAST STAGES OF THE TALKS ?

THE GOVERNOR: THAT WAS JUST THE WAY THAT IT WORKED OUT AT THE END. BUT IT DOESN'T CAUSE ME ANY PROBLEM BECAUSE, AS I SAID EARLIER, IT'S WHAT YOU GET AS A RESULT RATHER THAN WHO IS ACTUALLY DOING THE TALKING THAT'S IMPORTANT. ALSO, THE VERY CLOSE INVOLVEMENT OF HONG KONG WHICH TOOK PLACE THROUGHOUT THAT FINAL STAGE.

T

MAU CHI-WANG (HK ECONOMIC JOURNAL MONTHLY): I HAVE TWO QUESTIONS. MY FIRST QUESTION IS, I HAVE AN INTERESTED IN THE ROLE OF BANK OF CHINA. CAN YOU ELABORATE MORE? WHAT'S THE ROLE OF BANK OF CHINA IN THE FUTURE WHEN COMPARED WITH HONG KONG BANK AND CHARTERED BANK IN TERMS OF BALANCE OF POWER ? THIS IS MY FIRST QUESTION.

-

—

THE GOVERNOR: IN THIS AGREEMENT, LET ME DEAL WITH THE AGREEMENT FIRST. THERE ARE TWO ELEMENTS WHICH INVOLVE THE BANK OF CHINA; ONE IS THAT I HAVE SAID THAT I AM WILLING TO APPOINT ONTO THE AIRPORT AUTHORITY SOMEBODY FROM THE BANK OF CHINA GROUP EMPLOYED HERE LOCALLY IN HONG KONG, THAT'S THE BANK OF CHINA GROUP EITHER THE BANK OF CHINA OR ONE OF THE WHAT IS SOMETIMES CALLED SISTER BANKS AND THEN THERE IS THE PROVISION THAT THE BANK OF CHINA WILL BE WILLING TO TAKE PART IN SYNDICATING LOANS AND THAT SORT OF THING WHICH WILL GIVE I THINK A MEASURE OF CONFIDENCE TO OTHER BANKERS. YOUR BROADER QUESTION, MUCH MUCH HARDER TO ANSWER AND I DON'T THINK I CAN PRODUCE AN ANSWER FOR THAT WE'VE GOT TWO BANKS THAT YOU ARE REFERRING TO - BANK OF CHINA, HONG KONG SHANGHAI BANK BOTH VERY, VERY BIG IN HONG KONG, BOTH WILL I THINK GO ON PLAYING A MAJOR ROLE IN THE HONG KONG ECONOMY BUT THE ACTUAL BALANCE BETWEEN THEM, I COULDN'T GUESS AT THAT.

/MAU CHI-WANG :