ENG-1982 — Page 12

REVIEW

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one of the fundamental world changes in the past two decades has been the rise of the Orient as a trading and financial area. Think of the countries bordering the Pacific basin: Japan; California; Australia; China like a slumbering giant being roused by the four modernisations; Indonesia, with the world's third-largest population; India, only five hours' flight from Hong Kong; not to mention Korea, Singapore and Hong Kong itself.'

Free Trade

A natural deep-water harbour, a convenient position in Southeast Asia, and the guarantee of free trade the formula recognised by a percipient observer writing in the Canton Register so long ago as 1860 as being likely to produce 'the greatest mart East of the Cape' - have all played their part.

Of these three ingredients it is free trade, its advantages, disadvantages and elusive definition, which has most exercised the minds of observers, commentators and bureaucrats over the years. The Government's policy, indeed doctrine, of non-interference with the commercial activities of the population has been described in many phrases: 'laissez-faire,' 'free trade,' 'positive non-interventionism,' all are said to be the accepted hallmarks of Hong Kong, even if those who use the phrases do not always understand them in the same way. The policies called by those titles have been those of the Government of the day, though perforce articulated and explained on its behalf by successive Financial Secretaries. Over the decades they have consistently proclaimed as their credo the belief that market forces act to solve problems more effectively and certainly more swiftly, than bureaucratic control or guidance ever could do. That this approach, broadly speaking, has been accepted and indeed welcomed by the merchants and people of Hong Kong is beyond argument – though in its detailed application it has not commanded the support of all of the people all of the time.

The philosophy is of course not a Hong Kong invention: other times and other places saw its birth and development. Indeed as long ago as 600 B.C. the Taoist sage, Lao Tsu, a contemporary of Confucius, was advancing a not dissimilar thesis and including amongst his precepts:

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'The world is best ruled by letting things take their course. It cannot be ruled by interfering.'

'Do not intrude in their homes. Do not harass them at work. If you do not interfere they will not weary of you.'

(Lao Tsu: Tao Te Ching) But what is unusual in the modern world is the consistency of enunciation and of application of the thesis. So we read in 1946, so soon after the ravages of the Japanese occupation, when the world was in an economic strait-jacket and such staples of Hong Kong's entrepôt trade as rice, flour and sugar were in short supply and some strictly rationed, the Department of Supplies, Trade and Industry was commenting in its Annual Report:

'While the merchant's natural belief in laissez-faire could not be fully accepted, it was recognised that the fullest freedom compatible with the welfare of the people and international obligations must be accepted.'

To similar effect in 1982, the new Governor in his first Annual Address opening the session of the Legislative Council, summarised the future economic policy of his Government thus: