ENG-1986 — Page 33

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HONG KONG AS A PARTNER IN WORLD TRADE

on imported raw materials, and all its entrepôt trade, by definition, involves imports as well as exports. There has been absolutely no attempt to boost exports artificially by subsidies or bounties or to restrict imports in order to raise employment, strengthen external reserves or to protect internal economic activities. Taxation is levied impartially on all those earn- ing incomes from, or conducting business in, Hong Kong, and there has been no policy to attract investment through tax holidays or other special inducements.

A further consequence is that the adjustment process, which is continually proceeding between the internal economy and the external balance of payments, tends to push the system towards a balance of trade in goods and services and voluntary capital movements together. So, in general terms, Hong Kong very rarely runs large surpluses or deficits on its external trade and, on the rare occasions that it does so, forces are operating to move the system back towards balance.

When all these factors are considered together, they form a picture of a very accom- modating partner in world trade. Hong Kong not only provides a free, open and growing import market for a wide range of goods and services from all over the world, but its exports also supply the needs of consumers in many markets at competitive prices and qualities that can only enhance their standards of living. Which only goes to show that international trade, when properly conducted, is not a game of winners and losers. All trading partners gain from trade, and participation in a more open international trading system can but increase growth and prosperity. That is a lesson which Hong Kong, without doubt, has learned very well.

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