XN000022-1995-10-23 — Page 11

as Governors but it was a reminder of the sort of changes in mood that we have had to deal with in Hong Kong and will need to continue to deal with.

What happens after 1997 is of course not strictly my business. I am responsible for Hong Kong until 30 June 1997. I can do everything possible to build the foundations for a prosperous future in Hong Kong but there is obviously some frustration that there are limits to my ability to give reassurance about what is going to happen after my departure. However, let me try to apply to that question that sense of history and proportion, which I mentioned earlier. Let me challenge those who are critical about Hong Kong's prospects to look back a little, say, to earlier than last Tuesday or the Tuesday before that, which is most people's notion of history, and let me look at what has happened since three events in our recent history, all of which have been regarded as extremely important. I want to recall what was said at the time and see what has happened since.

Let me begin with 1984. 1984 was the year when we successfully negotiated with China the Joint Declaration, and that successful outcome was not greeted with all the hoorays and hosannas that you might have expected. There were widespread predictions of disaster in the years up to and beyond 1997. Hong Kong, it was suggested, was finished. Hong Kong would run down as people and capital fled before 1997. One of the leading international business magazines I noticed said that there would be no new construction projects after 1984 - no new construction projects. For Hong Kong it was suggested the lights were going out.

Since then, and you do not have to check this with the China Light and Power, of course many more lights in Hong Kong have gone on. Hong Kong has been transformed by one construction project after another. In our airport, we have the largest civil engineering project in the world, completing what will be by far the busiest airport. We have built tunnels, roads, housing. When I went to Hong Kong, we promised that we would complete one hundred new flats a day; we have actually been completing 117 new flats a day; commercial buildings and two bridges, which will I believe put their architectural stamp on the community and on the region. So there are no lights going out.

Since 1984, we have enjoyed an 84 per cent increase in real terms in our GDP. We have seen an increase in investment of 106 per cent. Our export of manufactures have gone up by over 400 per cent. Our export of services has gone up by 142 per cent. Taxes have of course been cut, because it is Hong Kong, and at the same time as we have cut taxes our fiscal reserves have gone up by over 600 per cent. So as disasters go, what has happened in Hong Kong has been pretty comfortable.

Let me take the next cathartic, and understandably cathartic, effect in our recent history. The killings in and around Tiananmen Square in 1989, which had a dramatic effect on international opinion and in particular on sentiment about Hong Kong. There