Press Release

 

 

Speech by Chief Secretary for Administration

********************************************

Following is the full text of the speech (English only) by the Chief Secretary for Administration, Mrs Anson Chan, at the Foreign Correspondents' Club this (Wednesday) afternoon:

Mr President, ladies and gentlemen,

First of all, thank you for squeezing me in and I am delighted to have this opportunity to address you before you close down temporarily, I understand, for something like six weeks. I was looking up when I last addressed this gathering and I was surprised to find, actually surprised to find that it was way back in 1994. So, I made a promise to the floor that I would definitely come and address you all before I finally retire. And you all know when I am going to retire. In case you don't, it is June 30, 2002.

The last time I addressed members of this distinguished club, I think I had just been described by a member of the Legislative Council - and I don't think it was meant as a compliment - as being "old fashioned". More recently, I find myself being referred to as the "iron butterfly" and I wondered to myself if that could possibly mean Thatcheresque with Chinese characteristics. What can a girl say? On the strength of those labels, I am not quite sure whether I should now be purring like Eartha Kitt, you know that song "I am an old-fashioned girl", or laying about the editors of The Economist and Newsweek with my handbag.

Mr President, I have chosen for my speech today a rather headline-like title of 'Cutting through the haze of Chinese Shadows'. I think this will be familiar to the readers of the two magazines I've just mentioned. Now, I will pre-emptively crave your indulgence if it turns out to be somewhat misleading, but then, that is the nature of headlines, as all journalists who have ever argued with a sub-editor will know.

As I said, I am grateful for the opportunity to speak to you today, just a week before the Chief Executive delivers his third policy address, and to share with you the way I see Hong Kong going forward 21/4 years after the transition. I hope also to address some of the specific issues which I know are of concern to you, and to the international community at large.

Firstly, let me say that to some, the Hong Kong picture may look a bit out of focus. To a large extent that is because the pre-conceived wisdom about what would happen to Hong Kong politically and economically after 1 July 1997 has been turned on its head. The Asian financial crisis took most of us by surprise, but my own feeling is that history will show that, once again, Hong Kong will have turned crisis into opportunity. The challenge thrown up in the past two years was in many ways a blessing in disguise for Hong Kong. And I believe we have risen to it. Of course, you would say that it is easy for me to say. And I would say that, wouldn't I? But where's the beef?

Let's look at the political and economic landscape. I am well aware of perceptions of a worrying pattern of issues - concerns about the rule of law, about freedom of expression, freedom of the press, the advent of interventionism. I will tackle some of these later, but let me assure you that from where I sit in the Chief Secretary's office, Beijing has been true to its word in honouring its promise of allowing Hong Kong people to run Hong Kong.

Basically, they have left us alone to get on with it. That means the post-transition buck stops firmly at the door of the Special Administrative Region Government, and I am more than willing to argue our case in the court of public opinion. And I think I have the lumps to prove that. What I really want to get over to you is this : so long as we continue to enjoy - and more importantly protect - our promised high degree of autonomy and remain united in our efforts, then I see no good reason why Hong Kong should not forge ahead economically, socially and politically and maintain our position as Asia's premier international city.

On the fiscal front, we have formulated, in a difficult environment, two very pro-active Budgets that helped alleviate some of the financial pain being felt by many in the community. The effects of those measures are now starting to trickle through, as evidenced by the recent signs of a pickup in consumer sentiment. We have set ourselves a three-year target to reduce civil service spending by 5%, an enhanced productivity exercise that will save $5 billion. Coupled with our plan to spend on the basis of a 3% trend growth rate of GDP, these savings will allow us to launch new initiatives, meet past pledges and increased demands on our social safety net for people in need.

Our status as an international city demands that we continue to push ahead with our ambitious and visionary infrastructure programme. There are more than 1,500 capital works projects under way at the moment, and we plan another 200 projects in the next few years. So, the projects that we have in hand are on a scale even greater than the entire Airport Core Programme.

We are also embarking upon a landmark reform of the civil service, which will better equip itself for change. Next week Policy Secretaries will hand down their own Policy objective booklets setting out the success, or otherwise, of policy initiatives taken in the past year as part of our ongoing pledge for more openness and more accountability.

These are but some of the building blocks we are putting in place, although I'm not sure that our construction work is as widely recognised as it should be. This may be because we have not had to perform the same radical surgery on our economic structure as some of our neighbours. After all, some of the weaknesses exposed by the Asia financial turmoil simply did not, and do not, exist here. We are a free trade, open market economy, with low taxes and a prudent fiscal policy and a constitutional obligation to balance our budgets.

Both the public and private sectors in Hong Kong have weathered a very difficult two years with considerable resilience. And I think that bodes well for the future. I hope the positive turn for the better our GDP has taken in the second quarter of this year is a sign that the worst is over. Central to this is confidence in our currency. The Hong Kong Dollar has held firm - and in doing so provided financial stability not only at home but elsewhere in the region.

While undoubtedly affected by a downturn in business, our banks and financial markets have continued to function normally, without major disruption. On the other hand, the Asian Contagion did highlight areas where we needed to improve our competitiveness and regulatory framework. A raft of reforms in the banking and financial market sectors are gradually falling into place, initiatives that will significantly strengthen our position and attractiveness as the major financial centre in the Asian timezone.

Another fault-line exposed in the fallout from the Asian financial turmoil was a property bubble that was bound to burst. The result has been an extremely painful experience for many, and I do not underestimate its impact on many ordinary home owners and buyers who find themselves holding negative equity in their properties. But property prices have now stabilised and I believe buyers are much more cautious than, say, two years ago, when real estate prices were unrealistically rocketing skyward. This was a particularly salutary lesson for the community at large that in an ever-changing world, even fast-on-its-feet Hong Kong cannot afford an over-dependence on property where prices and profits continue to rise exponentially. We need to find other eggs to fill our basket.

That's why we have pieced together a string of strategic co-ordinates which place greater emphasis on catching the technology wave, including e-commerce; reshaping and repositioning the tourism industry whose success we too long took for granted; for the broad and deep reforms we have introduced to the banking and financial services sectors. Set these initiatives, and the far-reaching educational reforms announced last week, against a background of a recovering regional economy and the tremendous new opportunities for Hong Kong's role as a middleman generated by China's entry into the WTO and I think you will have a reinvigorated Hong Kong licked into better shape to face the challenges of the new Millennium.

Let me say that the government has not been a passive bystander in all of this, although it's arguable if we have taken or followed the lead. What I do not accept is that in seizing opportunities like, for example, the Cyberport, we have somehow walked away from our non-interventionist policies; that we have suddenly switched from laissez faire to cronyism.

Frankly, I think it's a bit laissez faire to say that Hong Kong is a laissez faire economy. How can that be so when the government owns all the land and, by virtue of that, has a big hand in the property market? How can it be so when almost half the population lives in heavily subsidised public housing? There are government subsides for many other public services - for example, something like 97% in the case of our medical services.

Our policy has always been characterised as positive non-interventionism, that is we make a conscious decision whether to intervene or not. And we do not intervene unless it is in the overall public interest to do so.

In practice, as you know, by and large we leave it to the market to decide, while Government provides the physical and social infrastructure, human resources and regulatory framework to keep the playing field level.

You see the evidence of that in our port and airport, our railways and mass transit system, bridges, roads, tunnels, industrial estates and much more. To me - and as Secretary for Economic Services for 6 years I was heavily involved in the provision of much of this infrastructure - our involvement in the Cyberport is a natural extension of this process.

We are, after all, facing a revolution as potentially profound in its impact on humanity as the Industrial Revolution. And for us to sit on our hands debating the niceties of positive non-interventionism when a serious entrepreneurial opportunity is presented to us would not, I fear in the final analysis, win us any plaudits in this practical and progressive community, which knows a good deal when it sees one.

As an aside, particularly for those of you who are not convinced by our cyber ambitions, allow me to recommend to you an excellent article by Andrew Lynch in the current issue of Asia Inc. It is based on a meeting of young who-dares-wins hi-tech entrepreneurs held, I believe, at the FCC during the summer. Discussing the brouhaha surrounding the Cyberport, one of the players said : "It really has put the spotlight on Hong Kong, and it's put the spotlight on the government and it's put the spotlight on the Internet. It's been a fantastic wake-up call." It's OK, Andrew, we've smelled the coffee.

Sadly, there is so much misguided talk about the Cyberport being a sweetheart property deal, that some people have lost track of what we have achieved at a stroke : a quality development which will be wholly owned by the Government and which has already attracted 12 big hi-tech names as anchor tenants, at minimum government outlay, with the potential for handsome profits for the taxpayers, in addition to the creation of a strategic cluster of information technology and service companies which will provide us with a front-grid position in the fast-moving digital world. What we have is a cyber based platform to help Hong Kong go up the value chain.

I concede that there is much else for us to do. If we are to position ourselves as the New York or London of Asia, we have to tackle our serious environmental problems; upgrade the level of English; create a quality of life and lifestyle that stimulates more leisure and sporting opportunities and nurtures a passion for a multi-layered, multi-cultural arts scene driven by local and overseas talent. We need our own West End and Broadway if we are to tap our potential as the cultural capital of Asia. And I believe all of this is within our sights and within our grasp.

But if I can return to the here and now, there are two other issues that I would like to deal with : the rule of law and press freedom. I hope that most of you present here today will know where I stand on both issues. For me, the preservation of the rule of law must be this community's top priority. We all instinctively know that our deeply-rooted legal system and our independent judiciary sets us apart from the rest of Asia. So does our free and prolific press. Lose these - or see them diminished - and we really do become just another city in China.

Here, let me make a plea for a somewhat less knee-jerk reaction every time the catchwords 'rule of law' and 'press freedom' pop up on the radar screen. The simple fact we now need to embrace is that Hong Kong has for the first time in its entire history a written constitution and, as any American will tell you, that means constitutional argument and legal challenge. Interface that with a common law system built up over 150 years to the civil law system in the Mainland, and I think you are bound to end up with a challenge to ensure that our continuing common law system can mesh effectively with this new constitution. I fear that much of the upset we created over the right of abode issue has its roots in this challenge.

In an interview with the 'Hong Kong Lawyer' on his retirement last month, the High Court Judge, Mr Justice Findlay, himself trained in both the Roman and the common law, saw no terrors in the two systems influencing each other. He thought China would be influenced by us, and in terms of commercial law in Shanghai already had been, and that we will be influenced by them. About that, he said as follows -

"That is healthy. Any system that becomes totally closed and not open to influence from the rest of the world is pretty dry and not healthy at all."

So, as I urge, I hope we can maintain perspective, because I have no doubt that there will be further testing of the limits, more controversy, more legal debate, more litigation. My appeal to everyone involved in these debates is to frame them in the context I have described. We must be able to square our unique constitutional circle if our legal system is to survive and flourish and underpin our autonomy. Without that, One Country Two Systems will lose its meaning and its promise.

As for the current debate on press freedom and professional standards and ethics triggered by the proposal for a Press Council on Privacy, who can say that this debate is a bad thing? Surely in a free and pluralist society which treasures the rights to free speech and a free press, this is a good thing. Firstly, it has allowed the whole community to express its concerns over the nature of reporting in some newspapers. The fact that more than half of those asked in a recent survey indicated they would support a Press Council even at the loss of some press freedom is a measure of the community's concern.

Secondly, the way the profession and its representatives have reacted to this challenge, their determination to face squarely the questions of professional standards and ethics, demonstrates, I think, their maturity and responsibility. They are laying the ground work for self-regulation which must strike a balance between the freedom to publish without fear or favour and the concerns of the community that standards in some cases have become unacceptable.

I accept, of course, that it is not easy for those who do not or cannot read Chinese to grasp the community's concerns. Perhaps, this partly explains why some international observers have come to see the issue as an attempt by a less tolerant post-colonial regime to muzzle or hobble the press. I urge all of those who may be inclined to this view to listen carefully to the practitioners in the Chinese-language media who recognise that problems exist, and who have come together to do something about them in the interests of professional integrity and press freedom. You will find among them a rich diversity of views about the right way forward, but a common commitment to their craft and the cause of freedom of expression. I believe they deserve our understanding and support.

Let me hasten to add that the Government has an open mind about the right way forward. We appreciate that there are arguments and concerns at both ends of the spectrum. The Law Reform Commission is currently conducting a public consultation exercise and I urge the community and media representatives at all levels to express their views freely. I am sure that the Law Reform Commission will listen carefully to the views expressed and we look forward to receiving their final recommendations on this important issue.

On that note, ladies and gentlemen, I should like to wrap up. And I do hope that I have been able to demonstrate that, despite the slings and arrows of the last 21/4 years, Hong Kong has not lost its way, but is simply engaged in a process of renewal. We are re-gearing and re-tooling for the 21st century. We have not abandoned the values on which we have built our past success. Nor have we lost our appetite for self-examination and vigorous public debate, particularly over issues which are fundamental to our future success, such as the rule of law, press freedom and, above all, the role that they play in the autonomy we enjoy under the Basic Law.

Mr President, ladies and gentlemen, I would like to thank you once again for inviting me to address you all. The FCC is a Hong Kong icon. Your members keep Hong Kong before the eyes of the world. Of course, we don't always agree with what you write. And it occasionally causes us a good deal of frustration. But that would be nothing compared to the alarm we would feel if ever we became so uninteresting and unimportant - so dull - that you felt we were no longer news. Personally, I think we will be good copy for a long time to come.

Thank you, ladies and gentlemen.

End/Wednesday, September 29, 1999

NNNN