ENG-1990 — Page 28

SHAPING UP FOR THE 21ST CENTURY

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both internal and external, are excellent. A recent decision of the Privy Council has confirmed that income earned in the region is not liable to Hong Kong tax. The use of English and the common law in business is well understood.

These regional headquarters are not set up in Hong Kong to take advantage of our position as a gateway to China but to conduct business in the region. And the region is the Pacific Rim, the fastest growing economy in the world. It is not easy to express growth in simple terms but growth does need communication. It is estimated that by the year 2000 Asia, excluding Japan, will constitute a market for telecommunication equipment larger than either the USA or the EEC. Asia starts from a low base. In the EEC there are 90 telephones for every 100 of the population. In China there are two per 100, due to grow to four, and there are a good many hundreds of population in China.

This is a particularly difficult time to examine the tea leaves of world economics and forecast anything ten or twenty years ahead. The Gulf crisis may escalate dramatically between the time of writing and reading. The fate of GATT hangs in the balance. Eastern Europe is in economic revolution and Russia near disaster.

By comparison Asia is a tranquil hive of activity. The Koreas are speaking to each other, indirect China-Taiwan trade and travel is flourishing and even Vietnam is slightly less stony faced. The countries of the Pacific Rim have a voracious appetite for growth- making trade.

The prospects for long-term sustained growth in Hong Kong are based on firm foundations. Our own internal economy is moving from an industrial based one towards a service based one. We are immersed in the rapid growth of the Pearl River delta where some two million people are working in Hong Kong-owned factories. Investment is being increasingly attracted from Japan as well as Taiwan which is fast developing its trade with both Hong Kong and, indirectly, with south China. Business conditions are now attracting firms to establish their regional headquarters here. The development of telecommunica- tions, the port and airport, are set on a course of long-term expansion capable of absorbing the great increases in demands to be made on them.

Ships, Planes and Trade

In accordance with the Joint Declaration, Hong Kong has now set up its own shipping register and its name will change into 'Hong Kong, China' after 1997. The register has been created with the support of Hong Kong shipowners who are experienced operators in this field. If this is the sort of thing they like, it will attract other shipowners so that ships registered in Hong Kong, China will become familiar in ports all over the world, as befits a major world port.

Hong Kong is a regional port of great significance. It is an accident of nature that deep water ports are rare on the China coast but not an accident that the port of Hong Kong has been developed into such an efficient operation. Hong Kong has also been able to act as middleman in the trade between China and Taiwan.

The Port and Airport Development Study has identified ways in which cargo handling facilities can be expanded for many years. The airport is an ungainly project. It cannot be built alone. It is no use unless you can get there and this means a bridge bigger than the Golden Gate Bridge in San Francisco as well as masses of supporting roads. The port is different because it need only be built bit by bit. The planning exercise shows where the bits