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permanent residence in the Mardarin Hotel! We work on the basis of the minimum interference with business but give them the maximum support. We have open markets, we have low taxes; our top rate of tax is 15 per cent, which is paid by 2 per cent of the working population. Public spending growth is constrained to the trend rate of growth in the economy, so that today, even with increasing levels of social provision, public spending takes less than 20 per cent of GDP.

However, it is not true to argue that Hong Kong has been just a capitalist laboratory. It has invested sensibly like some of the other Asian tigers in social equity programmes. Squatter housing began to be replaced by a huge public housing programme in the 1950s and 1960s, and over 40 per cent of the population today live in public housing.

We have seen a huge investment in education. Ten years ago, 3 per cent of the 18 year-old age group went into tertiary education; today the figure is 24 per cent. Between 60-70 per cent of our students in tertiary education come from public housing estates. It has been the most astonishing social revolution.

We have a big investment in health and welfare as well. We now live longer than people in most of the OECD countries - I hope that goes for governors as well as governed! Our child mortality rates are also lower lower than the United States, lower than Australia, lower than in the United Kingdom, and that in a community which 35-40 years ago was suffering from epidemic disease.

Put together all these things, sensible public policies and decent community values, put them together with the hard work and enterprise of our Cantonese and Shanghainese population, and for reasons which as I have said would not have surprised Alexis de Tocqueville, Hong Kong has been swept up on an exponential surge of economic growth. It is a mature, moderate, sophisticated society able to take most things in its stride, including, as I shall argue, 1997.

What are our responsibilities to Hong Kong? What are the responsibilities of the departing sovereign? Uniquely, as I argued, not preparing people for independence but seeking to smooth the path to a different sovereignty. The nature of the whole task, its inherent challenge to liberal, pluralist sensitivities, should make us especially punctilious in meeting our obligations.

Those obligations were the main dynamic in the negotiations in the early mid- 1980s with China, to which the Vice Chancellor referred, over the transition. The change of sovereignty, its terms and its promises were set out in an international treaty tabled at the United Nations called the Joint Declaration.

The Joint Declaration describes the sort of society Hong Kong is today, and guarantees its survival for 50 years after 1997. Even though Hong Kong's system is