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successful it will be far more difficult to manipulate and interfere in the running of Hong Kong than if Hong Kong were simply transferred from being a

Colony of the UK to being a Colony of China, which is really what DENG Xiaoping

thinks should happen.

This confirms what I have said in many speeches in the last three years, namely that democracy and freedom are not only absolutely essential to ensure the success and the prosperity of a free enterprise society (look at the United States, present day Japan, present day West Germany, compare the differences between Helsinki and Leningrad, West Berlin and East Berlin, Hong Kong and Canton). But it is also a bulwark, a defence against the interference from certain Chinese Cadres in our internal affairs.

I think, and I have said this before as well, that DENG Xiaoping is a genius and that his idea, his principle of two systems in one country is brilliant and that it has in it the germs of peace worldwide because there are many other situations where these principles could be applied (East and West Germany, North and South Korea, Israel and the Palestinians, South Africa etc.), but what is essential, if it should work, is that it really is applied objectively, that the temptation to interfere from the Central Government is curbed.

There are instance already where this system is working. And funnily enough, one of these is that famous Hong Kong connection: Bermuda. Bermuda is a British Colony. Like us it has a low taxbase (on income tax!) and like us it is a successful financial centre. It has party politics and a British but non-executive Governor. It has a completely directly elected legislative council who brook no interference in Bermudan affairs from the UK except for defence and external affairs. If, for foreign policy reasons, the UK states that Russian ships are not allowed to call at Bermuda, that is accepted without question. But if the UK wants to impose a special tax, no way, unless Legco votes for it, which they won't. Most important it has a ministerial system and an elected Prime Minister as the chief executive. This system has been working in Bermuda for 25 years without any problems and it suits both sides. (So much for the jeremiads of our big businessmen who fear increased taxes and social expenses if we introduce direct elections here!). Perhaps Mr. ZHAO Ziyang should spend three or four days in Bermuda the next time he visits the United States to study exactly how it works, and that as far as China is concerned there is nothing to fear from a democratic, free and liberal Hong Kong SAR.

But, of course, there isn't a hope of getting such a free, democratic SAR if people here now don't speak up, If they are intimidated now by the great man in Beijing then we have lost before we start, because how much more intimidated will they be when we are part of China. We must stand up now and in the nicest possible way tell the great man that because he does not have the experience and all his life and education has been based on a completely different system, he really must not judge what goes on here internally, and I underline the word internally.

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And he, as also our own people, should not be mislead by our 'Big' businessmen. I am a reasonably successful businessman and I cannot under- stand the statements which are being made by them appealing for keeping, what they consider, the status quo in the name of big business. Their watchword, drummed into them by Beijing, is 'convergence', a word which in Webster's Dictionary has 6 different basic meanings. But it emphatically does not mean when two rivers converge the bigger river swallows the smaller! It does mean that the Basic Law Draft must incorporate the convergence which already exists in the Anglo-Chinese agreement to have Hong Kong people run Hong Kong, which inter alia includes a completely elected Parliament (Legco). And Basic Law drafters ignore that convergence at their peril because one iota difference between the joint declaration and the Basic Law will destroy all confidence in the good will of the PRC and in the future of Hong Kong!

our

Let me tell you that big business manages very well in political systems of many different hues and that businessmen adapt themselves very easily to changing political conditions. Just look at multi-nationals who operate under

of any many different political systems and are vastly more successful than larger businessmen. I don't want to repeat here what I said at great lenght in the Urban Council in December last year giving examples of how democracy enhances business success rather than hinders it. But while I am talking about businessmen, let me talk about our smaller Hong Kong businessmen who do not have much clout and are not listened to in Beijing. They instinctively and patriotically have been trying to invest and do business in China. They have tried to help China in her modernization and they have found the people they had to deal with in China inflexible, arrogant, ungracious, and ungrateful, and many have now come back completely disillusioned and fearing the worst for Hong Kong after 1997 because they fear that they will have the same sort of people to deal with after 1997 in Hong Kong. To prevent that, gentlemen, is far more important to our continuing prosperity than to protect our present fat cats who don't need protection, and we have to stand up and tell them so.

We all accept fully that China will have to tell us what to do as far as foreign policy is concerned and that we cannot interfere in any shape or form with defence of Hong Kong or China, or China's internal politics, but that for the rest they really must leave us to govern ourselves otherwise we will have a sullen, unmotivated population on our hands here and the light of Hong Kong will be snuffed out long before 1997.

But if we are allowed our democracy, our direct-elections and ministerial system, and the minimum of interference, then this will be to our and China's everlasting credit and will be so recognized by the rest of the world.

So stand up Hong Kong and speak up loudly so that we may still have a chance of sailing into the year 2000 with the new Hong Kong flags flying proudly, leading the whole of China into the new Century.