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Following is an English translation of the opening speech by the Financial Secretary, Mr Donald Tsang, at a seminar on business and the rule of law today (Saturday):

Distinguished speakers, ladies and gentlemen,

First of all, I would like to thank the Hong Kong Economic Journal for inviting me to speak at this seminar on business and the rule of law.

You may have noticed that the speakers at this seminar today represent diverse views. So we can expect a free exchange of views and opinions in our discussion. In fact, the most valuable thing about Hong Kong is the freedom of everybody to express an opinion.

The conclusion to be reached at today's seminar is very important. A sound legal system is essential to the development of a good business environment. Those of you here from the business sector will agree that without a sound legal system to protect business activities - for example, the laws on banking, companies, intellectual property and insolvency - investors will not see Hong Kong as a base for development.

It is said that we must uphold the rule of law resolutely and that there is no room for compromise. This I agree, because I believe that every policy decision the government makes must be legal. Those who know me well will know that I am very proud of the fact that the Hong Kong government is taken to the court by members of the public from time to time. We all accept the principle that everyone is equal before the law.

Take the recent discussions on the right of abode in Hong Kong. Some people think that to ask the Standing Committee of the National People's Congress to interpret relevant Basic Law articles signifies the demise of the rule of law. Others believe it will not do any harm. Both sides have put forward their arguments. I have to emphasize that in this case the Government does have an adequate legal basis for its decision. Our decision is legal and constitutional. We recognise that there may be different ways to address the issue of the right of abode for mainland residents in Hong Kong. Our decision is based on a variety of factors. There has been an intense debate. Some legal professionals disapprove of the decision while some members of the public have misgivings about the future of the rule of law in Hong Kong. The Government is appreciative of this and pays close attention to it. Let me share with you my views on the environment for the rule of law.

The first element of the so-called environment for the rule of law is the foundation of the rule of law, namely, the legislative provisions, the legislative, judicial and law enforcement systems and the quality and number of legal professionals. The second element is the government's commitment to and determination in practising it. The third is the community's aspiration for the rule of law and their impression of, and confidence in, it.

Should any element in these three areas deteriorate, the environment for the rule of law would suffer. Therefore, the legal profession, the government and the public all have the responsibility to safeguard the rule of law, although their roles are all different.

I can assure you that the Government's understanding of, and its sincerity and determination to uphold, the rule of law has not changed in the slightest since Reunification. In handling unprecedented legal issues, the Government has taken the best option in the light of the actual situation and with Hong Kong's overall interest in mind. Some disagree and some do not understand. But this is only natural in this free society.

I certainly agree that more open discussion is useful. Many who hold different views from ours make their criticism in the interests of Hong Kong. We should respect these views. Hong Kong is known for its diverse characteristics. We have made our decision, but we are aware of the concerns of those who are opposed about the future mechanism. We have said we shall look into this.

Ladies and gentlemen, whatever your views on this matter are, I hope you will recognise that our decision-making process is transparent and impartial. After all, it is very important to our business environment for us to ensure our population policy is in line with economic development.

In recent weeks, my colleagues and I have spent a lot of time and made great efforts to explain to the community, especially people holding dissenting opinions, our views and the reasons for our decision. Not only is the Government's attitude based on its extensive and profound trust in the public, but it also reflects our earnest hope to win the trust of the community. Under the rule of law, it is mutual trust that ties the legal profession, the Government and the public together and maintains the 'ecological balance' of the rule of law.

We all know that a capitalist society operates on sincerity and trust. The various systems in society cannot function in the absence of a high degree of mutual trust. The same is true for the rule of law. Without mutual trust, the rule of law would crumble very quickly. If the rule of law is unsound and the community does not work together through thick and thin, this will deal a hard blow to the business environment.

I must emphasise that, although the right of abode issue has sparked much controversy, the rule of law in Hong Kong has a long history and is well established. The factors favourable to our business environment, particularly investors' confidence in the sustained, healthy development of Hong Kong, will be further strengthened because of the resolute decision made by the Government on this issue. If the Government did not act decisively, the problems of population and resources allocation would become uncontrollable and would seriously affect the sustained development of our economy, social stability, and the effective deployment of resources, etc. How can our good business environment be maintained then? How can investors take the view that our economic outlook is bright if they raise doubts about the administrative ability of the HKSAR Government? And how can we ride out the present economic recession?

The rule of law is an essential element of economic development. The Basic Law stipulates that the SAR Government shall maintain the status of Hong Kong as an international financial centre and we must take all possible measures to fulfil our constitutional duty. Hong Kong has a clean government and absolute freedom of the press. We have a well-developed information network and talented businessmen and we pursue the policy of fair competition. The rule of law and business activities are complementary to each other. We need actual deeds to put them in practice. Only history will tell our sincerity in defending the rule of law. And only economic prosperity can underline the sound business environment here.

I wish the seminar every success and once again, I would like to thank the Hong Kong Economic Journal. Thank you.

End/Saturday, May 29, 1999

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