Dr. [Edwin] Feulner, ladies and gentlemen, it is a
great pleasure for me to welcome you and your colleagues from the
Heritage Foundation and the Wall Street
Journal back to Hong Kong. It is especially gratifying to know
that you come bearing glad tidings: that Hong Kong has once again
emerged as the world's freest economy on your Index of
Economic Freedom. This is an honor that has been bestowed
on us since the inception of the Index seven years ago.
behalf of the Special Administrative Region Government of Hong
Kong, I would like to thank the authors of the Index for their continuing recognition and
support. In doing so, I want to make it clear that we in turn
recognize that it is an honor not lightly given. We also
acknowledge that it carries with it the heavy responsibility of
keeping the faith and leading by example. This I pledge Hong Kong
to do. We are a small government with the big idea that the market
the past three years our region has been shaken by a financial
earthquake that reached dangerous levels on the economic Richter
scale. There have been those who cast doubts on Asia's future
prospects. Others raised questions about Hong Kong's commitment to
the free market principles and practices which have earned us the
recognition I mentioned at the beginning of this speech.
Recovery in the region is by no means
complete. The picture is somewhat patchy. There undoubtedly remain
concerns about particular economies and, more generally, about
their commitment to and compliance with the reforms that were
required in the wake of the crisis. But on the upside, the
remarkable recovery of the more solidly based economies such as
Hong Kong have indicated once again the underlying strength and
dynamism of the region.
our own case, the evidence is there for all to see. From the depths
of the negative economic growth we recorded--for the first time in
history--in 1998-1999, Hong Kong has bounced back spectacularly
with growth of 14.3 percent and 10.8 percent in the first and
second quarters of this year. This has led us to revise our
original growth forecast for the year 2000 from 5 percent to 8.5
percent. Our property sector has stabilized, unemployment is
falling, tourist arrivals are once again reaching record levels,
consumer confidence is returning, and there has been a watershed
shift away from an over-dependence on property towards the New
Economy. I believe we are seeing the beginnings of yet another new
chapter in the ever-absorbing Hong Kong story.
of this has been driven by the market, and not directed by the
government. This is not to say that our administration has
daydreamed its way through the crisis. We have tailored our
economic and social policies to cope with the effects of the
downturn in the short term and to provide the physical,
intellectual, and cyber infrastructure that will be critical to our
continuing success in the longer term.
have done so by following what you may regard as the Heritage
Foundation textbook, although I would venture to suggest that Hong
Kong must have been a role model for your script as we have always
regarded Adam Smith as one of the founding fathers of Hong Kong.
Indeed, if you look at our constitutional document, the Basic Law,
you will detect the invisible hand of our free market mentor. The
Basic Law sets out in considerable detail the social and economic
policies Hong Kong is obliged to follow as a Special Administrative
Region of the People's Republic of China.
outlines the parameters of our open-market, free-trade economy
underpinned by the rule of law and an executive-led government
accountable to a fully elected legislature. It even requires us to
follow the principles of prudent fiscal management and balance our
budget. What other economy has such a requirement enshrined in its
There is a fundamental truth about Hong
Kong that I have pointed out before, but it bears repeating over
and over again: We stick to free market economics not just because
decades of experience and success have shown us what works. Our own
constitution obliges us to maintain this course. You can be sure
that we will continue to follow it religiously.
believe that our experience since the Handover bears that out.
Frankly, like many others in the region and elsewhere, we were
caught off guard by the financial typhoon that roared through the
region out of the collapse of the Thai baht just a day after our
historic return to China on July 1, 1997. But once we had battened
down the hatches--we have learned how to protect ourselves from
typhoons in Hong Kong--we set about creating the conditions for
sustainable recovery. Let me mention just a few initiatives:
- Decades of practicing prudent financial
management, resulting in the accumulation of formidable fiscal and
foreign exchange reserves, enabled us to vigorously pursue a US$30
billion program of rail and road infrastructure that will bring
enormous benefits to the ever-growing population of the northwest
New Territories and, at the same time, greatly enhance our existing
sophisticated cross-boundary links with the Mainland.
- We undertook a major reform of our
financial markets in remarkably short order, demutalizing and
merging our stock and futures exchanges and their clearing houses
and underpinning them with state-of-the-art e-trading
- We created the atmospherics, dynamics, and
cyber-structure for the business community to reposition Hong Kong
in the New Global Economy with the establishment of a high-powered
Commission on Innovation and Technology and setting up of a
Cyberport and a Science Park. We view this as the provision of New
Economy infrastructure, in the same way, for example, that we have
provided the physical infrastructure for the Old Economy.
- We liberalized the telecommunications
market to make it arguably the freest and cheapest in the
- We are radically reforming the education
system to produce the creative talent that we will require to be
competitive in the Information Age.
- We have cut back the bureaucracy and
introduced 21st century reforms to produce a leaner, more
cost-efficient civil service that already enjoys a reputation for
being one of the world's best and most productive.
- We are continuing to expand our container
port to ensure that, along with our new airport, we maintain our
premier position as the communications hub of the Asia
We have strategically repositioned our
tourism sector, spearheaded by the Hong Kong Disneyland deal, to
stay ahead of the competition as the premier tourist destination in
Asia outside of the Mainland.
- We have launched a drive to clean up our
air quality so that we match the standards of New York and London
by the year 2005. We have made significant investments to improve
our water quality. We are committed to the greening of Hong Kong,
firstly, because our citizens deserve a better environment and,
secondly, because we will lose our attraction as a base for our
large international community if Hong Kong ceases to be a good
place in which to live.
There is much more. I mention these only
to give you a sense of the scope and scale of the strategic
thinking behind our goal to turn Hong Kong into Asia's World City.
We see it as our job to have a vision of the future and to provide
the framework in which businessmen and entrepreneurs will see
opportunity for growth and profit. This in turn will add value to
our human capital, provide jobs and a higher standard of living and
quality of life for our people.
have always attracted investment and talent because people see Hong
Kong as a place where opportunity knocks, where hard work and
enterprise are rewarded. Hong Kong people do not envy success, they
want to emulate it. We come from a culture where we don't depend on
government. We would rather government stay out of our hair and
stick to its essential tasks of providing the framework which
enables free men and women to build a decent life for themselves
and their families.
does not mean that in an increasingly complex and global world
government can be a passive bystander. Its first and overriding
obligation is to protect and further the interests of the people it
is the context of our intervention in the stock market in the
summer of 1998. Our stock and futures markets had become so
distorted by calculated manipulation that they ceased to function
properly. Our intervention was not a careless act of economic
theological heresy; it was a judgement call made on the basis of
some pretty stark options: see the markets cease to function and
the currency and the economy collapse, or use the community's
hard-earned savings to rescue them from catastrophe by getting the
markets back on a level playing field. None of us lives in an ideal
world, nor, more to the point, in an ideological vacuum.
believe our subsequent program of disposal of the shares, in a way
which follows the rhythm of the market rather than distorts it, is
proof enough of our good faith in what was an exceptional situation
which we hope never to see again.
Heritage Foundation, the Wall Street
Journal, and many others have followed closely and have been
involved in the fortunes of Hong Kong over many years. The
establishment of the Heritage Foundation office in Hong Kong in
1996 is a fine example of that, and so is the Asian Wall Street Journal, which has been
headquartered in Hong Kong since the paper's inception back on
1976. We have all seen Hong Kong's position on the international
radar screen wax and wane over the years, particularly in the
sometimes tense and testy years leading up to the Handover in 1997.
I believe we were all delighted that the transition was effected so
smoothly. Indeed I think, it is true to say that even some of the
more starry-eyed optimists were pleasantly surprised.
almost three and a half years on, I think it is time to take stock
and to ask ourselves if we need to adjust the prism through which
we view Hong Kong. Let me make it clear that I welcome and
encourage international interest in Hong Kong. It would be
disastrous if we disappeared from the radar screen or generated
nothing more than the occasional fretful blip.
I am suggesting is that with Beijing having demonstrated its
determination not to interfere with Hong Kong's high degree of
autonomy, we should not allow ourselves to be spooked by every
light bulb that pops, every floor-board that creaks or every faucet
that leaks. I have in fact noticed that more and more Hong Kong
issues are being seen for what they are--that is, local issues
being debated and decided by local people.
is as it should be. That is what enjoying a high degree of autonomy
is all about. That is the freedom we enjoy under One Country, Two
Systems. And it is up to Hong Kong people to protect those freedoms
and that autonomy.
there remains a tendency to judge some things that happen in Hong
Kong in the context of China. I'm not suggesting we ignore that
dimension, because it is a reality. But I would like to see Hong
Kong issues placed more deeply in the framework of Hong Kong's
autonomy. The differences that exist in our community on all kinds
of issues from social provision to civil liberties to governance
are, in my view, natural and entirely healthy. They should not
cause anybody any alarm. This is what happens in a pluralistic
is a free-wheeling and argumentative but law-abiding community with
very firm ideas about how Hong Kong should be run. I am not fussed
about that. I will just add this: It is crucial to our autonomy
that we settle our arguments here in Hong Kong. Hong Kong people
running Hong Kong means just that: Hong Kong people running Hong
Kong here in Hong Kong.
is part of the process of political maturity that has been
developing here over a long period of time, in particular since the
reversion of sovereignty in 1997 became a fact of life with the
signing of the Sino-British Joint Declaration in 1984. I think if
you look at some of the controversies that have arisen in Hong Kong
since the Handover, relating to the rule of law and press and
academic freedom, the record shows that they have been debated
vigorously and passionately by a community which is highly
sensitive and vigilant about any perceived weakening of its rights
in these areas. To me, this sends a positive signal about the Hong
Kong people's understanding of what a high degree of autonomy means
have many issues to face, many problems to solve. I mentioned a few
of them a moment ago, including the question of governance. We will
need to forge a Hong Kong consensus on these Hong Kong issues. They
may not produce the same solutions that apply everywhere else, but
Hong Kong is not quite like any other place. We need to find
home-grown answers to matters which rest within our constitutional
autonomy. We must not lose sight of the fact that Hong Kong has a
unique geopolitical context, a unique relationship with its
sovereign, and a constitution within which the people of the SAR
can to a large extent develop as a community.
is important to remember is that the foundations of the house of
Hong Kong remain strong and dependable. Our past success has been
predicated on the fact that we were a free society under the rule
of law. We remain a free society under the rule of law. Fears that
our legal system would be undermined, for example, by the referral
to Beijing in the right of abode case have been unfounded. The
system is as robust as ever and our judiciary jealously guards its
independence. That is not just my view, but that of a number of
most senior judges, including two from the Court of Final Appeal
who were involved in the right of abode issue.
rule of law and economic freedom are the twin pillars of Hong
Kong's success. We shall continue to support and protect them with
all our strength and courage.
The Hon. Mrs. Anson Chan, GBM, JP is Chief
Secretary for Administration of the Hong Kong Special
Administrative Region of the People's Republic of China.