XN000022-1995-10-23 — Page 16

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It is interesting looking at what has happened in Asia over the last decade and a half: from the Vietnamese invasion of Cambodia, to the foreign investors' invasion of Vietnam; from the Indians linking their rupee to the rouble to the economic liberalisation proramme carried through by the present Indian government; from the hanging of Mr Bhutto to the election of his daughter as Prime Minister in Pakistan; from Imelda Marcos's shoes to President Ramos's democracy; from what looked rather like North Korean economics in China to the astonishing and remarkably sure-footed transformation in economic management in China over the last 15-20 years.

Hong Kong has been, and will continue to be, at the heart of this, Hong Kong with its close and continuing ties with the United Kingdom. Hong Kong, as David said, is China's largest source of direct external investment; with the second largest source of investment in Indonesia, the Philippines and Vietnam; with the third largest investor in Thailand. There are almost 400 Asian-Pacific-based companies, which have their regional offices in Hong Kong. I confirm, not only because Cable and Wireless are one of our sponsors, that Hong Kong is the telecommunications hub of Asia. Outside China we are the main tourist centre in Asia by a mile.

So if you are interested in Asia, you have got to be interested in Hong Kong. If you want a jumping off point for doing business in Asia, where better as a base than Hong Kong? Just think how much economic momentum all this represents. Is it really conceivable that it is all going to come to a juddering halt in 1997, that it is going to hit the buffers 600 days from now? Of course not. Not just because of the promises that China has made - promises about Hong Kong's freedoms and way of life and economic management, promises about Hong Kong people continuing to run Hong Kong - not just because of the promises, but because of the interest that China has in Hong Kong continuing to succeed.

For China there is in Hong Kong over US$20 billion at least of direct investment. For China there is the importance of Hong Kong as by far its richest city, and if you extrapolate forward 15 or 20 years, the richest city in the world. For China there is the role that Hong Kong can play in helping it through the next difficult stage of its economic revolution. For China as well there is understandably the question of face, making sure that the world sees that under Chinese sovereignty can do even better than it is managed under British, and I believe there is a widespread recognition as well that the rest of the world is going to regard the way that China handles Hong Kong as a litmus test for the way that China will take its place on the world stage as one of the greatest powers in the world.

As I said earlier, part of the frustration of my job is that there is a limit to the reassurance that I can give about what is going to happen after 1997. No-one asks anxiously about Hong Kong because they are worried about what is likely to happen in the next 600 days. The worries go beyond that: worries about corruption, though we have an extremely effective organisation fighting corruption with the enthusiastic