XN000022-1995-10-19 — Page 2

1

Governor's Question-and-answer session

Following is the transcript of the Governor, the Rt Hon Christopher Patten's question-and-answer session after his speech at the joint luncheon of Hong Kong chambers of commerce today (Thursday):

Question: Governor, I didn't want to be the first, and I hope I'm not the last, but I take the opportunity once a year to continue our conversation that we started years and years ago. In the past few years I've had a transcript of our dialogue for the last year. You addressed me as your favourite musician. Thank you very much, sir.

Governor: It hasn't changed, yet.

Question: Thank you.

Governor: The jury is still out for the next minute.

-

-

Question: But I'd like to be a bit more serious, sir, this year. Since here you say piece of paper to address your speech, I hope that you allow me to do the same. Earlier this year I chaired a Chamber SME task group. For people who don't know what the SME is - I'm sure you know, sir, - SMEs are small and medium enterprises. I chaired a task group which issued a detailed report about the rising operation costs for SMEs in Hong Kong. A copy of this report is in your hands, sir. If you don't have one, I have a spare copy in my pocket. The operating costs in Hong Kong for small and medium enterprises are very high. I give you a few examples.

Our office rental is the third highest in the world. Our wages are among the highest in the region. The laws governing business operations are getting increasingly detailed and costly to comply with. We operate in a high inflation area whereas we are exporting to low inflation markets - with the exception of the PRC. The SMEs are finding it difficult to survive in many cases, let alone to expand in Hong Kong. We don't hear much about the Business Council advising you but its members, surely, must have drawn your attention to this worrying situation. How do you, sir, and the Hong Kong Government propose to take the lead to ease the concern of the SMEs which form the backbone, not only of the General Chamber of Commerce but, surely, of all the other Chambers represented today in Hong Kong?

Now, before, Mr Patten, receiving your eloquent answer, could I ask you one more question after you have given the answer. I ask it now so that nobody else is taking the floor after you have spoken. Thank you very much.