292
HONG KONG URBAN COUNCIL
Please! This time listen to me! I don't want to stand here in an empty city ten years from now and say again: 'I told you so!'
APPENDIX II
The Editor,
South China Morning Post Ltd.,
Tong Chong Street,
Quarry Bay,
Hong Kong.
Dear Sir,
November 10, 1986.
Stephen CHEONG, presumably on behalf of his Industrial Constituents, keeps on calling for subsidized R & D and other Government help for Hong Kong Industry. Let me outline for him here why such Government help would be the kiss of death:
1.
2.
3.
It is because of the minimum of Government interference in Hong Kong that Hong Kong was able to create world-size industries literally from nothing in a very short period of time. Once industry accepts Government help they are beholden to Government. Whoever pays the piper calls the tune and such Government help as can be seen in many places in the world but especially in the United States, is the thin end of the wedge. The wedge being Government interference. And the larger that wedge the less industry produces, the more cost to the taxpayer, the greater the drag on the creation of wealth.
The only real strength we have in our bilateral negotiations with countries who want to force us into their protectionist straitjackets, the U.S., the EEC, Canada etc., is the fact that we can prove not only that we do not put impediments into anyone's way who wants to export their goods to Hong Kong, but there are also no hidden Government subsidies of any kind in our exports to them. Once Hong Kong industry accepts Government help, however small, this forceful argument falls by the wayside.
The reasons our competitors in Korea, Taiwan, Singapore etc., are successful is not Government help with R & D. It is low-cost efficiency and the exploitation of market niches, none of which can be obtained by Government help. In fact, where R & D has been Government-funded it has always been a disaster and that includes those countries which are considered our main competitors. I defy Mr. CHEONG to show me one product being successfully exported from Korea, Taiwan, or Singapore which actually is based on their own R & D and not on the R & D of their customers.
4.
5.
HONG KONG URBAN COUNCIL
Page 167 of 201
293
It is far more cost-effective to use our customers' R & D and it is certainly far more efficient not to pioneer. The annual R & D budget for just one large motor vehicle manufacturer is nowadays about triple the budget of the Urban Council. To be effective Hong Kong would have to spend more than that. Do we really want to finance this sort of money and thereby increase our taxes?
Our industrial success has been achieved not in spite of lack of Government help but because of lack of Government financial help.
The best business maxim I know and one I have always followed is 'to support success'. Mr. CHEONG certainly supports this maxim politically because he wants to keep the present governmental system since it has been successful. It seems odd therefore that he wants to meddle with the most successful of all Hong Kong's achievements.
Yours faithfully
W. M. SULKE
MR. PAO PING-WING (in Cantonese):—Mr. Chairman,
Capital Works of the Urban Council
Firstly, as chairman of the Capital Works Committee, I would like to report on the development of the capital works this financial year. Up to December, seven capital projects have been completed, among which are six recreational facilities and 1 market facility. Another seven are expected to be completed within this year, including two markets, three recreational and two environmental hygiene facilities. In other words, the Council expects to provide 14 new major urban services facilities for public use this year while spending a total of $385 million on capital works.
A comparison of the Council's spending on capital works in the past few years clearly reflects its earnestness in providing better urban services facilities for the public. In 1981/82, the Council's spending on capital works was only $139 million, but it was increased to $274 million in 1985/86. Expenditure of this year (1986/87) shows a 40 per cent rise over last year. It also means a 177 per cent rise over 1981/82.
In capital works, a mere investment of a large sum of money is never considered a success. In fact, we always strive to achieve the highest cost-effectiveness, for example, stressing capital works which require low maintenance fees or are of multi-purpose designs. On the other hand, in view of the shortage of suitable land for urban services facilities in the urban area,
292
HONG KONG URBAN COUNCIL
Please! This time listen to me! I don't want to stand here in an empty city ten years from now and say again: 'I told you so!'
APPENDIX II
The Editor,
South China Morning Post Ltd.,
Tong Chong Street,
Quarry Bay,
Hong Kong.
Dear Sir,
November 10, 1986.
Stephen CHEONG, presumably on behalf of his Industrial Constituents, keeps on calling for subsidized R & D and other Government help for Hong Kong Industry. Let me outline for him here why such Government help would be the kiss of death:
1.
2.
3.
It is because of the minimum of Government interference in Hong Kong that Hong Kong was able to create world size industries literally from nothing in a very short period of time. Once industry accepts Government help they are beholden to Government. Whoever pays the piper calls the tune and such Government help as can be seen in many places in the world but especially in the United States, is the thin end of the wedge. The wedge being Government interference. And the larger that wedge the less industry produces, the more cost to the taxpayer, the greater the drag on the creation of wealth.
The only real strength we have in our bilateral negotiations with countries who want to force us into their protectionist strait jackets, the U.S., the EEC, Canada etc., is the fact that we can prove not only that we do not put impediments into anyone's way who wants to export their goods to Hong Kong, but there are also no hidden Government subsidies of any kind in our exports to them. Once Hong Kong industry accepts Government help, however small, this forceful argument falls by the wayside.
The reasons our competitors in Korea, Taiwan, Singapore etc, are successful is not Government help with R & D. It is low cost efficiency and the exploitation of market niches, none of which can be obtained by Government help. In fact, where R & D has been Government funded it has always been a disaster and that includes those countries which are considered our main competitors. I defy Mr. CHEONG to show me one product being successfully exported from Korea, Taiwan, or Singapore which actually is based on their own R & D and not on the R & D of their customers.
4.
5.
HONG KONG URBAN COUNCIL
Page 167 of 201
293
It is far more cost effective to use our customers' R & D and it is certainly far more efficient not to pioneer. The annual R & D budget for just one large motor vehicle manufacturer is nowadays about triple of the budget of the Urban Council. To be effective Hong Kong would have to spend more than that. Do we really want to finance this sort of money and thereby increase our taxes?
Our industrial success has been achieved not in spite of lack of Government help but because of lack of Government financial help.
The best business maxim I know and one I have always followed is 'to support success'. Mr. CHEONG certainly supports this maxim politically because he wants to keep the present governmental system since it has been successful. It seems odd therefore that he wants to meddle with the most successful of all Hong Kong's achievements.
Yours faithfully
W. M. SULKE
MR. PAO PING-WING (in Cantonese):—Mr. Chairman,
Capital Works of the Urban Council
Firstly, as chairman of the Capital Works Committee, I would like to report on the development of the capital works this financial year. Up to December, seven capital projects have been completed, among which are six recreational facilities and 1 market facility. Another seven are expected to be completed within this year, including two markets, three recreational and two environmental hygiene facilities. In other words, the Council expects to provide 14 new major urban services facilities for public use this year while spending a total of $385 million on capital works.
A comparison of the Council's spending on capital works in the past few years clearly reflects its earnestness in providing better urban services facilities for the public. In 1981/82, the Council's spending on capital works was only $139 million, but it was increased to $274 million in 1985/86. Expenditure of this year (1986/87) shows a 40 per cent rise over last year. It also means a 177 per cent rise over1981/82.
In capital works, a mere investment of a large sum of money is never considered a success. In fact, we always strive to achieve the highest cost effectiveness, for example, stressing on capital works which require low maintenance fees or are of multi-purpose designs. On the other hand, in view of the shortage of suitable land for urban services facilities in the urban area,
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