XN000022-1996-02-07 — Page 21

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Over the years, we have regularly reassessed the role of the Government in supporting the efforts of the private sector but we continue to believe that our market- based economic philosophy and policies are sound. They have served Hong Kong so well over the decades and it is this very distinctive feature that has given us the edge over other competitors in the region. We also believe that there is considerable consensus over markets, enterprise and free trade in the community and I am glad to know that Mr Cheng is not advocating governmental intervention. Government should not actively manage the financial markets or interfere with market forces. Our role should be to support business by helping to enhance productive capacity, improve efficiency and sharpen competitiveness; in other words to maintain a competitive and favourable operating environment.

Through our regular consultation with market practitioners and experts in the international arena, there exists a consensus that Hong Kong's comparative advantages primarily draw from a host of factors. To name just a few,

(a) sound economic fundamentals such as strong international trade

performance and prudent fiscal position;

(b) strategic geographical, e.g. our time zone, location;

(c)

robust supervisory framework which inspires confidence and an effective anti-corruption regime;

(d)

advanced infrastructure such as telecommunication links, settlement and clearing systems;

(e)

business-friendly policies - predictable and low taxes, the rule of law, free flow of people and capital, open markets, etc., and finally

(f)

special, long-standing experience and expertise and relationship with the China market.

The list can go on and on. This not only reflects the width and depth of our strengths, but also presents a daunting task for Government and the private sector to keep up the very high standards in the face of increasingly keen competition. As many members have pointed out, the Hong Kong Monetary Authority has compiled a strategy paper last year on Hong Kong as an international financial centre. The paper reaffirmed the many opportunities and threats for Hong Kong and identified a number of continued work on various fronts. These include initiatives to further develop our debt market, engagement of sectoral studies on individual sectors, improvements to the operating environment in general and workforce upgrading in particular.