XN000022-1996-03-12 — Page 7

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Transcript of FS's media session

Following is the transcript of the meet-the-media session by the Financial Secretary, Mr Donald Tsang after attending the Symposium "Hong Kong Into the 21st Century: The Servicing Economy", today (Tuesday):

Question: Do you consider today's stock market

Do you also.... the China factor

the Hang Seng Index dropped ....? in your Budget?

FS: Too many questions in one. First of all, as far as the Hang Seng Index is concerned, we must realise the Hong Kong stock market and the Hong Kong futures market are part of the international financial system. And what happens in Wall Street inevitably will affect the performance of our local market. It is very natural. What is important is to make sure that the clearance system, the settlement system remain intact and efficient. And Hong Kong market maintains its integrity and open nature. And then we have demonstrated quite clearly yesterday that we are able to handle the transaction very smoothly. There's no sign of anxiety at all. This system has now proved to be first rate. That again, I'm sure will be reassuring to investors. And not only that when you bring money in that you can easily invest, when you bring money out, you can easily do so. For that reason you can see the rebound today which is quite satisfactory. As regards the political situation across Taiwan Strait, all I can say is, it is certainly not helpful to the economic development in the region. I hope that leaders on both sides will deal with the market very cautiously and will find amicable solutions before too long. As regards my forecast of economic growth rate in 1996 at 5%, I have assumed, I have assumed that China for instance will continue to enjoy MFN status. And I have also assumed that the disagreement across Taiwan Strait will not escalate to armed conflict. If these extraordinary things are likely to happen, of course Hong Kong's economy and our growth rate will be impaired.

Question: You seemed to be confident.... about MFN.... earlier that this year will be particularly difficult.

FS: This year will be particularly difficult because of what's happening in Taiwan. But Hong Kong will continue to do its utmost, in lobbying in American Congress and American administration the importance of China's MFN status to Hong Kong. The Governor will be visiting the United States and so with our Chief Secretary. They will bring in Hong Kong message very clearly to the United States.

End