XN000022-1992-10-05 — Page 4

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MONDAY, OCTOBER 5, 1992

MR CHAU NOTED THAT HONG KONG WAS KEEPING A CLOSE WATCH ON THE PROGRESS OF MARKET ACCESS NEGOTIATIONS BETWEEN THE U.S. AND CHINA THE SO-CALLED SECTION 301 ACTION.

"HONG KONG AND AMERICAN BUSINESS INTERESTS WOULD BE HURT BY ANY U.S. RETALIATION AGAINST CHINA, AND BY ANY CHINESE COUNTER- RETALIATION HE SAID.

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HE SAID HONG KONG HOPED THAT CHINA AND THE U.S. COULD REACH A NEGOTIATED SETTLEMENT LIKE THEY DID EARLY THIS YEAR, ON THE PROTECTION OF U.S. INTELLECTUAL PROPERTY RIGHTS IN CHINA.

"THE ISSUE OF WHETHER CHINESE PRODUCTS WILL CONTINUE TO BENEFIT FROM MOST-FAVOURED-NATION (MFN) RATES OF CUSTOMS TARIFFS WHEN IMPORTED INTO THE U.S. HAS BEEN A THORNY ONE IN RECENT YEARS, HE SAID.

MFN IS CLEARLY THE WRONG TOOL FOR SOLVING TRADE OR NON-TRADE PROBLEMS BETWEEN THE U.S. AND CHINA, HE SAID.

TURNING TO THE IMPLICATIONS OF 1997 FOR HONG KONG, MR CHAU SAID MANY HONG KONG EMIGRANTS WERE NOW RETURNING.

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THE SAME TIME, PRACTICAL STEPS WERE BEING TAKEN TO MAKE FOR THE LOSS OF TALENT, INCLUDING SCHEMES FOR PRACTICAL AND VOCATIONAL TRAINING AND FOR COMPANIES TO BRING IN TALENT FROM ABROAD.

HE EMPHASISED THAT HONG KONG WAS APPROACHING THE FUTURE FROM A POSITION OF IMPRESSIVE FINANCIAL STRENGTH, THANKS TO THE STRONG GROWTH OF THE ECONOMY AND TO PRUDENT MANAGEMENT OF THE PUBLIC PURSE.

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HITHERTO EXCHANGE ASSETS,

THE GOVERNMENT RECENTLY MADE PUBLIC A FIGURE THAT HAD BEEN ONE OF HONG KONG'S BEST KEPT SECRETS THE SIZE OF THE FUND WHICH HOLDS THE BULK OF THE GOVERNMENT'S FINANCIAL INCLUDING FISCAL RESERVES AND THE BACKING TO THE NOTE AND COIN ISSUE.

AT THE END OF 1991, THE FUND STOOD AT ABOUT $30 BILLION, WHICH $29 BILLION ARE FOREIGN CURRENCY ASSETS.

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"THE MUTUAL BENEFIT WHICH HONG KONG AND CHINA DERIVE FROM OTHER IS ONE OF THE BEST GUARANTEES OF HONG KONG'S FUTURE AS A HIGHLY AUTONOMOUS SPECIAL ADMINISTRATIVE REGION OF CHINA," HE ADDED.

"THE SINO-BRITISH JOINT DECLARATION GUARANTEES THAT AFTER 1997, HONG KONG WILL CONTINUE TO BE A SEPARATE CUSTOMS TERRITORY AND WILL CONTINUE TO MAKE TRADE AND ECONOMIC DECISIONS ON ITS OWN.

"I BELIEVE THAT IT IS BY REMAINING AS AN AUTONOMOUS TRADING PARTNER AND A SEPARATE ECONOMIC ENTITY THAT HONG KONG CAN RETAIN ITS VITALITY AND DYNAMISM AND THEREBY CONTINUE TO PLAY ITS CURRENT ROLE, HE SAID.

"I AM CONFIDENT THAT HONG KONG WILL CONTINUE TO BE A EXAMPLE OF FREE TRADE AND FREE ENTERPRISE LONG AFTER 1997 HAS INTO HISTORY," HE ADDED.

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