XN000022-1994-04-28 — Page 4

THURSDAY, APRIL 28, 1994

BEEN

- 3.

-

HAD I'VE

VERY, VERY GOOD DISCUSSIONS WITH ALL THESE PEOPLE, ABLE

THEY'VE TO PUT ACROSS THE HONG KONG CASE.

LISTENED VERY

AND

WHEN ATTENTIVELY,

I THINK AND I VERY MUCH HOPE THAT

PRESIDENT CLINTON COMES TO MAKE HIS FINAL DECISION THAT HE WILL HAVE REGARD HONG KONG'S POSITION ON THE MFN ISSUE.

TO

MR LORD DO

QUESTION: DID YOU GET THE IMPRESSION FROM YOUR MEETING WITH THAT THE DECISION HE SAYS THE DECISION HAS NOT YET BEEN TAKEN. YOU THINK IT STILL IS UP IN THE AIR STILL, THAT STILL THERE'S ROOM FOR MOVEMENT IN THE ADMINISTRATION?

IS

TAKEN.

CLINTON

CHIEF SECRETARY: WELL, I THINK THAT A DECISION HAS NOT BEEN IT'S TOO EARLY TO MAKE AN ASSESSMENT, AND I THINK OBVIOUSLY THERE STILL A FEW WEEKS TO GO BEFORE JUNE THE THIRD, WHEN PRESIDENT HAS TO MAKE UP HIS MIND,

REASONS BEHIND HK'S THRIVING ECONOMY

HONG KONG'S ECONOMY HAS THRIVED BECAUSE THE ADMINISTRATION BELIEVES IN PRIVATE ENTERPRISES AND SMALL GOVERNMENT, THE SECRETARY FOR THE TREASURY, MR DONALD TSANG, SAID ON WEDNESDAY (APRIL 27).

ADDRESSING THE HONG KONG ASSOCIATION OF NORTHERN CALIFORNIA IN SAN FRANCISCO, MR TSANG SAID ONLY IN THIS WAY COULD THE GOVERNMENT ENSURE THAT BUSINESS WOULD HAVE THE FREEDOM AND THE OPPORTUNITY то GENERATE THE WEALTH THE SOCIETY NEEDED.

"I AM SURE THAT A MAJOR REASON FOR OUR SUCCESS IS THAT WE HAVE RESISTED THE TEMPTATION TO SPEND MONEY SIMPLY BECAUSE WE HAVE IT.

"INSTEAD, WE HAVE MADE SURE THAT GOVERNMENT SPENDING GROWS NO FASTER THAN THE ECONOMY AS A WHOLE, HE SAID.

+

MR TSANG POINTED OUT THAT HONG KONG'S TAXES WERE VERY LOW.

"ABOUT HALF OF OUR WORKING POPULATION PAYS NO SALARIES TAX AT ALL AND TAX RATES FOR THE REST ARE AMONG THE LOWEST IN THE WORLD.

"YOU WILL NOT BE SURPRISED TO LEARN THAT THE WORLD COMPETITIVENESS REPORT (DAVOS) 1992 ESTIMATED THAT HONG KONG'S TOTAL TAX REVENUE AT ONLY 11.25 PER CENT OF GDP

WAS THE LOWEST PERCENTAGE OF ALL 36 ECONOMIES SURVEYED," HE ADDED.

MR TSANG NOTED THAT THE VALUE OF PRIVATE SECTOR INVESTMENT IN HONG KONG, IN TERMS OF SAVING PUBLIC RESOURCES, HAD BEEN ENORMOUS.

BEYOND THE AIRPORT CORE PROGRAMME, HE SAID, HONG KONG HAD

OF

A OVER ACTUALLY ESTABLISHED A VERY LONG RECORD,

CENTURY, OF BRINGING PRIVATE SECTOR EQUITY OR LOAN CAPITAL INTO PLAY IN ITS MAJOR INFRASTRUCTURAL PROJECTS.

"BY ENCOURAGING PRIVATE SECTOR PARTICIPATION, THE HONG KONG GOVERNMENT HAS BEEN ABLE TO FUND ITS EXTENSIVE SOCIAL SERVICE PROGRAMMES WITHOUT ANY PUBLIC DEBTS, A MASSIVE PUBLIC SECTOR OR CRIPPLING TAXATION.

/"WE ACCEPT