XN000022-1992-05-27 — Page 8

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WEDNESDAY, MAY 27, 1992

APPROPRIATE TO THE CONTINUED HONG KONG FOR

THIRDLY, THE MOVEMENT OF INDUSTRIES TO SOUTHERN CHINA HAS OFTEN BEEN DESCRIBED AS AN 'EXODUS'. BUT IT WOULD BE MORE VIEW IT AS AN EXPANSION OF HONG KONG'S INDUSTRIAL BASE. RELIANCE OF MANY OF SOUTHERN CHINA'S INDUSTRIES ON INVESTMENT, MANAGEMENT, LINKAGE MATERIALS, FINISHING, AND RE-EXPORTING THIS. THE RESTRUCTURING OF HONG KONG'S INDUSTRIAL BASE DEMONSTRATES

OTHER EXPANDING IN THIS WAY HAS RELEASED LABOUR IN HONG KONG FOR SECTORS OF THE ECONOMY AND HAS ENABLED THE INDUSTRIES THAT REMAIN HONG KONG TO CONCENTRATE ON HIGHER-VALUE, HIGHER-QUALITY PRODUCTS.

IN

IN IN

STRUCTURAL CHANGES FOURTHLY, THERE IS NO EVIDENCE THAT THESE HAVE DONE ANYTHING TO DIMINISH HONG KONG'S PRICE COMPETITIVENESS WORLD MARKETS. THIS HAS BEEN MADE POSSIBLE BOTH BY IMPROVEMENTS

ACTIVITIES PRODUCTIVITY AND BY THE DEVELOPMENT OF OUTWARD PROCESSING

THUS HONG KONG PRODUCTS HAVE BEEN ABLE TO MAINTAIN ACROSS THE BORDER. THEIR COMPETITIVENESS IN WORLD MARKETS.

THE GOVERNMENT'S ROLE IN THE DEVELOPMENT OF INDUSTRY

MAXIMUM SUPPORT

ΤΟ

THE

:

WE

THE

OF

THE GOVERNMENT BELIEVES THAT ITS POLICIES HAVE CONTRIBUTED AN ECONOMIC ENVIRONMENT IN WHICH MANUFACTURING INDUSTRIES HAVE BEST POSSIBLE CHANCE OF SUCCESS. THE PRINCIPLES BEHIND THESE POLICIES

FREE MARKET ECONOMY THOSE THAT HAVE UNDERPINNED OUR HAVE BEEN

AND ENCOURAGEMENT. INTERVENTION, BUT MINIMUM BELIEVE THAT ATTEMPTS TO FRUSTRATE OR OTHERWISE INTERFERE WITH OPERATION OF MARKET FORCES WILL TEND TO DAMAGE THE HEALTHY GROWTH

OR INDEED ANY ECONOMY. UNDER THE

THIS PHILOSOPHY, INDUSTRIES ECONOMIC ACTIVITY - NOT KEEPING PACE WITH THEIR COMPETITORS THOSE MAINTAINING A COMPETITIVE EDGE REAP THE FULL BENEFITS OF THEIR OF LIMITED BOTH ENSURES AN EFFICIENT ALLOCATION THIS SUCCESS. RESOURCES WITHIN THE ECONOMY AND ENABLES INDUSTRIES TO MAXIMISE RETURNS.

DECLINE;

THEIR

CIVIL

AND

BREAKS.

MINIMUM INTERVENTION MEANS THAT WE LET BUSINESSMEN, NOT SERVANTS, MAKE BUSINESS DECISIONS; THAT WE DO NOT PROTECT OR SUBSIDISE INDUSTRIES WHICH ARE UNABLE TO SURVIVE THROUGH FREE COMPETITION; THAT WE DO NOT PROVIDE DISCRIMINATORY INCENTIVES, SUCH AS TAX GIVEN HONG KONG'S SIMPLE TAX SYSTEM AND LOW TAX RATES, TAX CONCESSIONS EFFECTIVE IN OR TAX HOLIDAYS WOULD, IN ANY CASE, BE UNLIKELY TO BE

THEMSELVES HERE. MANUFACTURERS TO ESTABLISH ENCOURAGING OVERSEAS

STABLE MOREOVER, EXPERIENCE HAS SHOWN THAT INVESTORS PREFER A SIMPLE, LOW TAX STRUCTURE TO SHORT-TERM INCENTIVES.

THAT THE BEST

SURVIVE;

MAXIMUM SUPPORT MEANS THAT WE SEEK TO ENSURE POSSIBLE INFRASTRUCTURE IS AVAILABLE TO ENABLE INDUSTRIES TO THAT WE IDENTIFY CONSTRAINTS TO GROWTH AND SUGGEST WAYS OF BUILDING ON STRENGTHS AND OVERCOMING WEAKNESSES; AND THAT WE PROVIDE THE NEEDED TO PROMOTE INDUSTRIAL DEVELOPMENT THROUGH PRODUCTIVITY QUALITY IMPROVEMENT AND PRODUCT INNOVATION.

SERVICES GROWTH,

/ALL THESE