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Following is a speech by the Financial Secretary, Mr Donald Tsang, at HKGCC Annual Business Summit this (Tuesday) morning:

"SAVING PRIVATE RYAN"

Peter, Honourable guests, Ladies and gentlemen,

Last Sunday, for my wife's coming birthday, I took her to watch the film "Saving Private Ryan". The previous time we watched a film together in a cinema dates back to pre-transition time. So it wasn't a frequent event. Naturally the film has made us think much and I wish to talk about it today.

Because of this I have to begin my speech with an apology. First, I have once again resorted to the somewhat jaded tactic of choosing the name of a popular film to attract your attention to my speech. Second, the use of film titles for my speeches on previous occasions has drawn mixed reactions and landed me in some troubles. May I urge you not to impugn any hidden motives on my part on this occasion. I assure you I have none. If you believe that I should never have chosen this or any film titles for my speeches, because this might lend to many unfortunate interpretations, I really crave your indulgence.

Some of you might also blame me for selecting an American film about the Normandy landings and thereby helping to perpetuate the myth that they were almost exclusively an American enterprise. When in fact as everyone knows - with the possible exception of some Hollywood film producers - soldiers of many lands took part on that historic day and Americans were responsible for only a minority of the beaches.

But let us not quibble. After all the heroism on Omaha beach is a matter of record. And - more important for my purposes this morning - there are several aspects of the film which provide a useful springboard to examine the present economic situation facing Hong Kong.

The first lesson that can be drawn is the need for international co-operation. The effort to liberate Europe led to the USA, Canada, Britain, Russia and many other countries working together in a noble cause. Indeed they were joined by brave individuals from neutral nations and many of the countries of occupied Europe itself. Irishmen flocked to England to join the fight. Polish pilots flew fighter planes in the British Royal Air Force etc.

The present economic problems facing Hong Kong and the Asian region will require a similar degree of international solidarity if we are to tackle them successfully. Hong Kong is particularly fortunate that the economies of our two major trading partners, the USA and the Mainland, are still both doing reasonably well. There is thus a solid basis for our trade-based infrastructures, notwithstanding the recently announced depressed figures for October. This provides some degree of comfort in these very difficult times.

But there is no room for complacency. It is absolutely vital, for example, that Japan turn its economy around and take the lead in promoting a regional economic revival. Equally important, global and regional efforts to free up trade and remove tariff and other barriers, in both goods and services, must continue with renewed vigour. Political leaders in particular must have the courage to resist narrow-minded protectionism or the urge for predatory behaviour, however superficially attractive the short run benefits may seem. And the courage to maintain structural reform programmes where these are essential to long term well-being. If, under pressure, the world turns inward - adopts a "Beggar Thy Neighbour" approach - then we will all be worse off.

The second lesson to be drawn from the film is the need for internal co-operation, members of a community looking out for each other. As the squad moved forward through enemy territory, all members were at risk. Only through teamwork would they stand a chance of survival. Each member had to play his part. As individuals they were vulnerable, as a unit they had strength.

In present day Hong Kong, we particularly need understanding, sensitivity, pragmatism, patience, and team playing in dealing with labour relations which inevitably comes under test when economic fortunes turn poor. All of us, proprietors, management and employees, must work together. We must avoid short-term expedients. We must pursue longer-term goals.

Yet, whatever happens, the Government should never intervene or dictate to any party what to do. Nor the management. Nor the employees. We are not a command economy. We are a free economy - by any fair measure the freest in the world. We must instead appeal to the good sense of all sides, the employers, the employees, to look out for each other. They must trust each other, and to establish that trust they must communicate. That is where the Government may have a role to play - as mediator, as facilitator. But the key is that both sides must face reality. We are all in the same boat. If the ship goes down, everyone will drown; not just the captain on the bridge, not just those on the lower decks.

The third lesson is the need to remain calm under fire. When the going gets tough, the tough gets going. The marines suffered serious losses wading ashore through the surf, and more as they struggled to regroup on the beach. But with courage and fortitude they stood their ground and then moved forward towards their objective.

The final lesson to be drawn is the need for a sense of duty, a sense of mission. Near the end of the film, Captain Miller played by my favourite actor, Tom Hanks, is lying mortally wounded. He gestures to the death and devastation around him and then speaks to Private Ryan, whose life has been saved and who will go on to live a long and fruitful life. "Earn this," he says. "Be worthy of this." And of course these words apply not just to the captain and the private. They apply to all generations as the baton passes from hand to hand.

I have been reflecting over the relevance of the captain's message for a long while. As the storm clouds gathered over our foreign exchange market and stock market and all hell broke loose, I was able to turn to Hong Kong's enormous reserves to see us through. These reserves did not arise by accident or some stroke of fortune. The Government did not win first prize in some mythical fiscal lottery. These reserves were built up over many years by the hard work of the people of Hong Kong. They were preserved by the discipline and forebearance of my predecessors as Financial Secretary who resisted, year after year, calls for imprudent spending and give away tax cuts. Legislative Councillors and community leaders were also, by and large, responsible. Through their combined efforts, and their sacrifice, we accumulated not only the reserves themselves, but also the reputation for fiscal prudence to go with them. The two together proved irresistible. We withstood the attacks. Philip Haddon-Cave, John Bremridge, Piers Jacobs, Hamish Macleod - these were our Captain Millers. This past year we have been Private Ryan.

It is with these thoughts in mind that we turn to face the New Year. In particular how do we apply these lessons to the 1999 Budget.

Lesson 1, we must remain international in outlook. Hong Kong will never close its markets to goods, or to services, or to capital or to people. We will never have exchange controls. We will always maintain a completely level playing field. We will continue to press for sensible multi-national solutions to international problems. We never suppress our press. We never tell the press what to do. They can print anything they like. They can take the Government to court, which they relish doing. And most of all, we will be competitive, but not predatory. We must put food on the family table. But we will never steal from our neighbour's larder and call it hunting.

Lesson 2, everyone must play his part. The public sector, particularly the Government, must be prepared to make bold institutional changes to secure greater efficiency and improved services, even if that means upsetting long established practices. We must ask whether some activities still belong in the public sector at all. The business sector must also look more actively for new opportunities. The unemployed must look more keenly for work, perhaps by taking jobs that are less than ideal or less well paid than they may have wished. The community at large will have to accept that turning to the Government for support must be - as it was for our fathers' generation - the last resort, not the first port of call. And throughout all this I am sure that our legislators will ultimately show the same maturity and sense of responsibility as their illustrious predecessors. It is a tall order for us all, but nothing less will do.

Lesson 3, courage under fire. We will all need it. We are all taking hits. We are all taking losses, just like the marines. But the important thing is not to panic. We must think things through and then boldly make our moves.

Finally lesson 4. We must have a clear sense of history, a firm understanding of who we are, where we came from, what kind of community we want to build and pass on to our children. In balancing all the conflicting pressures when I frame my next Budget, I will try to keep two things in the forefront of my mind

* the need to protect the most vulnerable. Whatever changes we make elsewhere in welfare provision, we must continue to look after those who absolutely cannot take care of themselves; and

* the need to provide the foundations for our economy to grow again. Whatever our hopes and dreams for the future, they will come to naught unless we turn the economy around.

The scope for new spending, the scope for tax concessions, will be extremely limited. And if we cannot have a balanced Budget this year, we must at least show we are well on the way to restoring fiscal balance.

Above all, we must earn the privileges we inherited from previous generations. We must be worthy of the sacrifices they made for us. For now we are Tom Hanks, and it is our turn to save Private Ryan.

Thank you.

End/Tuesday, December 1, 1998

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