ENG-1985 — Page 20

HONG KONG IN TOUCH WITH THE WORLD

7

now the new home of Hong Kong's Legislative Council. The statue is not of a statesman, explorer, military man or an early Governor, but of a banker, Sir Thomas Jackson, and was erected, as the inscription notes, 'in grateful recognition of his eminent services to the Hongkong and Shanghai Banking Corporation, whose destiny he guided as Chief Manager from 1876 to 1902'.

On Sir Thomas' right hand, across busy Des Voeux Road, is the bank's new head- quarters, 52 storeys of grey metal and glistening glass. Customers entering at ground level ride an escalator to the banking floor under an atrium which soars a cathedral-like 52 metres.

To the left and right of the new building stand the more traditional headquarters of the Bank of China and the Standard Chartered Bank. Both banks have plans to replace these buildings - indeed, foundation work has begun on the new Bank of China on a site only a few hundred metres away. The building, designed by the Chinese-American architect I. M. Pei, is of towering pyramid-like structures and will be not only Hong Kong's but Southeast Asia's tallest.

While these banks replace their headquarters with modern affirmations of past prosperity and faith in the future, they are only three of the 143 licensed banks operating in Hong Kong, along with 35 licensed deposit taking companies (DTCs) and 278 registered DTCs.

Some of the banks have large and expanding local branch networks to meet domestic banking needs, while others, including many of the 131 bank representative offices, concentrate on international financing, loans and foreign currency trading.

By providing essential finance, the banks have played a vital part in the flowering of Hong Kong's post-war economy, a process which was itself nurtured by a government policy for which there have been many descriptions, if no formal definition. It has been called market-disciplined free enterprise; the promotion of efficient free enterprise through respect for individual property rights; positive non-interventionism.

What the policy means, in layman's terms, is minimal government involvement in the private sector, while ensuring an adequate base for monetary policy, the promotion of sound business practices and appropriate protection for depositors and investors.

Flexibility remains the core of the policy, along with a disinclination to regulate merely for the sake of regulation. Controls do exist, or are devised, and applied as required, leaving the government like a horseman holding the reins loosely, but ready to pull them in if his mount shows signs of galloping off dangerously in the wrong direction. This role has sometimes been misunderstood, or the very will to act at all has been questioned, but fundamentally the government believes that it is not its business to be daily in the market place. In return, it expects an appreciation by industry and commerce that such a lack of interference helps them to get on with their tasks of producing and buying and selling, and that market forces mean rewards for the successful and no return for the failures.

Addressing the Stock Exchange, London, in January 1985 on the political and commercial prospects for Hong Kong, the Governor, Sir Edward Youde, vowed that the government would remain non-interventionist and would regulate only when the orderly conduct of business, fair treatment of the work force, and the good name of Hong Kong so required.

Hong Kong's good name did so require in October 1983 when, at a delicate stage of the Sino-British negotiations on the future of the territory, political uncertainty spawned a lack of confidence in the Hong Kong dollar, bringing subsequent fluctuations in the exchange rate.