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as Chancellor of the Exchequer. He could assure Chairman Deng that no finances were more prudently managed than those of Hong Kong. That would continue. The size and salaries of the public service would continue to be prudently managed. Chairman Deng had said China would impose no taxes on Hong Kong. Hong Kong would continue to finance itself on the same prudent and skilful basis. The Chinese side should be in no doubt about that. Nobody realised better the importance of the Hong Kong dollar. The UK would continue to do its utmost to sustain it. The Exchange Fund would continue to be used for the good of the Hong Kong economy. As an ex-Finance Minister and as Foreign Secretary and on behalf of HMG, he could give his absolute assurance that China need have no worries on this score. It was as much in the UK's interest as China's for Hong Kong's finances to remain sound. Chairman Deng had been right to emphasise the importance of land. Here too the Chinese Government should have no fear. He gave his personal assurance, and that of HMG that the Hong Kong Government would continue to manage land in the best interests of the Hong Kong
SAR.
15. Chairman Deng welcomed the Secretary of State's assurances. The Chinese side trusted the Secretary of State and the Prime Minister. Their trust had been built up in the course of the talks. Of course, China hoped that nothing of such kind would occur in the transitional period. time, they must be prepared.
At the same
16. The Secretary of State then intervened. He said that the HKSBC had no plans to move. He agreed that Jardine's move had not been timely, but their headquarters had been kept in Hong Kong. They were maintaining their operations there. It was important that both sides understood that what they did together would ensure the success of the "one country, two systems" approach. If the capitalist system were to be maintained in Hong Kong, the two sides must ensure by all their actions that Hong Kong remained a magnet of success, attracting capital. Frankly, two years ago, he would not have believed that the idea of maintaining a confident capitalist system in Hong Kong under the sovereignty of socialist China was realistic. It was the prospect of the continuation of the capitalist system in Hong Kong that would continue to magnetise capital towards it. Everyone wanted US and Japanese capital to stay in Hong Kong. However, such decisions did not depend on governments, but on the two sides' capacity to maintain confidence that Hong Kong's capitalist system would remain. was thus vital that the agreement should give confidence to investors around the world. With that assurance they would conclude that the Hong Kong SAR was a good place to invest. Clear and precise language would be needed in the agreement. Legal, monetary, trade and civil aviation matters were still to be completed. It was the Chinese leaders' determination to maintain the dynamism and magnetism, of Hong Kong's system
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It
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