XN000022-1993-07-02 — Page 7

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FRIDAY, JULY 2, 1993

FS: YES. I DON'T WANT TO EXAGGERATE IT. THE FACT IS THAT ANY FINANCIAL SECRETARY, OR ANY CHANCELLOR, OR WHATEVER THEY MIGHT BE CALLED SOMEWHERE ELSE, THE NATURE OF THE JOB IS THAT YOU HAVE TO LOOK AT THE DOWNSIDE RISKS MORE THAN YOU LOOK AT THE UPSIDES BECAUSE OUR JOB IS TO BE ACTUALLY RATHER CAUTIOUS. SO LAST YEAR WE HAD THE POTENTIAL DOWNSIDE OF THE MFN ISSUE BETWEEN THE US AND CHINA, WHICH AT LEAST HÀS BEEN EXTENDED FOR ANOTHER YEAR, CONTINUES OF COURSE TO BE A POTENTIAL DOWNSIDE. I THINK THE ONLY NEW DOWNSIDE THAT WE HAVE IS THIS NEW DEVELOPMENT IN CHINA AND THE EFFECTS ON US. I THINK YOU HAVE SEEN THR INITIAL REACTIONS OF ECONOMISTS, BANK ECONOMISTS IN PARTICULAR, IN THE MEDIA OVER THE LAST FEW WEEKS, WHICH I DON'T HAVE STRONG DISAGREEMENT. I DON'T THINK ANYONE IS FORECASTING MAJOR PROBLEMS FOR HONG KONG. BUT WHEN IT COMES TO FINETUNING FORECAST, THEN WE'LL CERTAINLY RAVE TO LOOK AT THE IMPLICATIONS. THEY WILL BECOME CLEARER, I THINK, OVER COMING MONTHS. IT'S QUITE DIFFICULT AT THIS BARLY STAGE TO KNOW WHAT THE IMPLICATIONS ARE BECAUSE WE DON'T KNOW WHAT THE MEASURES ARE GOING TO BE.

THE

REPORTER: TOO EARLY TO START THE CONSULTATION EXERCISE?

FS: THE EXERCISE CAN'T ACTUALLY WAIT BECAUSE WE ARE DEALING HERE WITH A HUGE NUMBER OF DECISIONS, ON BOTH EVERY DEPARTMENT'S RECURRENT EXPENDITURE AND EVERY PUBLIC WORKS PROGRAMME ITEM. YOU ARE ACTUALLY DRALING WITH THOUSANDS OF ITEMS OF EXPENDITURE. IT'S TRUE OF COURSE THAT MEMBERS WILL NOT DEAL WITH THE SMALL ONES. BUT EVEN FOR THE LARGER ONES, WE NEED TO BEGIN TO GET THE FEEL QUITE SOON FOR WHAT SHOULD BE PRIORITIES AND HOW THEY FIT AGAINST THE SIZE OF THE

САКЕ, THE SIZE OF THE ACTUAL MONEY AVAILABLE.

REPORTER:

I AM

FS: AGREED

YOU STILL GET CRITICISED AFTER THE CONSULTATION EXERCISE

(INAUDIBLE)

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NOT AT ALL NEGATIVE LIKE THAT. I THINK IT WAS GENERALLY BY MEMBERS THAT THE EXERCISE LAST YEAR WAS ACTUALLY RATHER FORTUNATELY FOR ME, LAST YEAR IT PRODUCED QUITE A DEGREE OF CONSENSUS ON WHAT THE PRIORITIES SHOULD BE. I HOPE THAT WILL BE THE CASE AGAIN THIS YEAR.

USEFUL.

REPORTER: THE PRIORITIES THIS YEAR?

FS:

m

THAT I AM WAITING FOR MEMBERS TO TELL ME SO I AM NOT GOING TO GUESS. THANK YOU VERY MUCH.

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