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

Following is the transcript of the Chief Secretary, Mrs Anson Chan's question and answer session at the Asia Society luncheon today (April 19):

Mr Ronnie Chan, Chairman of Asia Society Hong Kong Centre: Anson has very kindly agreed to answer some questions. And I wonder, Anson, if you would be agreeable if we should ask the students who are sitting on the two sides to be the first. And if they don't, we will certainly open it to the floor. Students of Hong Kong. There are microphones - the first one to my far left.

Question: There are some discussions on the possibility of installing a ministerial system in Hong Kong and I wonder what is your view on that? And what do you think would be the impact on the Civil Service in terms of its morale and its stability?

Mrs Chan: The Civil Service, clearly, has to move with the times and as the Chief Executive has made clear in his last Policy Address, in response to the wishes of the community he is examining the scope for enhancing the accountability of principal officials. And in this context there is much debate about what the system should be. You referred, just now, to the ministerial system.

I think, first of all, you need to define what you mean by a ministerial system and I daresay most people's definitions would be somewhat different. In principle, I think that there is no reason why - if it is considered desirable and is in the interests of the community - why you cannot have a layer of political appointees over and above the Civil Service.

But as I have pointed out in my speech and as the Chief Executive himself has confirmed, for the Civil Service in its entirety, it is important to preserve it as a meritocratic and politically neutral system. But you could certainly - but I emphasise again, you will have to determine what the pros and cons of it are - you can certainly add another layer of political appointees who would then be, as it were, as in other democratic models, responsible for decisions. And if they are found wanting, then they would step down from their posts. But I hope very much that the Civil Service as a whole will be maintaining its political neutrality, which I believe to be very, very important, and which I also believe is what the community wants.

Question: What will you say to a person at my age who has the enthusiastic mind in joining the government, working as an official in the government? That is my first question.

And the second question is, as I am from the Hong Kong U, some of my classmates would like to know what is your plan after your retirement and would you plan to be our next Vice Chancellor?

Mrs Chan: Well, if you decide to join the Hong Kong Civil Service, I would say, "Hooray". Because as I have pointed out in my own speech, one of the two best decisions I ever made in my entire 61 years was to join the Hong Kong Civil Service. And nothing that has happened in the past 39 years has caused me to change my mind. There is great satisfaction and reward to be derived from serving the community and the Civil Service is clearly the best way of doing it.

You ask - I didn't quite catch the last part of your question but I have no specific plans for what I will do after I step down from the Chief Secretary's post. But I have to say to you that I do not have any intention of becoming the next Vice Chancellor of the Hong Kong University. But thank you for the compliment you paid me.

Mr Ronnie Chan: Well, maybe that youngster will one day stand here and become the Secretary for Administration or the Vice Chancellor of Hong Kong U.

Mrs Chan: The sky is the limit.

Question: Both the past and the present governments say they encourage lifelong learning. So, if this is the case, we believe the Open University is acting a role in this aspect. So, may we know, if Mrs Chan is going to continue in your lifelong learning, your lifelong study, what kind of courses you would like to take in the Open University?

Mrs Chan: I am a great believer in lifelong learning. A couple of weeks ago, I opened a seminar about civil servants participating in training courses and one of the points I made to my colleagues is that even at my age, at the tail-end of my career, I still take tutorials in improving my Putonghua at least once a week. So that is an example of lifelong learning for you.

I do intend to take a few courses but I haven't yet made my choice. I would like to, perhaps, take a few course, particularly at the Open University, in those areas where I have never found time for. But quite what these are, I have to tell you later.

Question: I have been involved with Hong Kong since 1984 and a resident since 1990, and I think I can speak on behalf of a lot of expatriates here, that a big part of our heart is in Hong Kong. And I can further presume, I hope, without offending anyone, on behalf of all expatriates, to express our deep appreciation to you, Mrs Chan, for the service of Hong Kong over so many years. You have done so with extraordinary intellect and intelligence, devotion and loyalty, enthusiasm and grace. And we hope - I think all of us expatriates and local people here - we hope that you will continue to service Hong Kong, China in the years to come. Thank you very much.

Mrs Chan: Thank you very much, Joseph. Thank you. In response to your very complimentary remarks, Joseph, I can assure you that I would remain an interested and engaged citizen of both Hong Kong and China. And if there is any way in which I can continue to be an advocate for Hong Kong and improve understanding between my country and other countries, then I shall certainly be very, very happy to do so. But thank you, Joseph.

Question: I cannot be as eloquent as the previous speaker who is an expatriate, whose mother tongue is English, but as a citizen of Hong Kong, Anson, I thank you very much for what you have done for us all.

Anson, I have a question for you. How do you see the social part of Hong Kong developing in the coming years? And I specifically refer to one of the problems is that we have an underclass of people in Hong Kong who don't seem to be getting in on the extra wealth that we are making. So do you think that this will get better or do you think it will get worse in the years to come?

Mrs Chan: I think, clearly, all of us must be concerned that although we are seeing a steady improvement in our economy, not the entire community, not all members of the community have benefited from this and we do know that there are certain sectors that are still lagging behind. But I think, clearly, the government must continue to do more of what it has been doing in the past.

On the one hand, to govern with a light touch. To remain faithful to market driven policies. But to do what we can to improve both the physical infrastructure and the social infrastructure, and improving the business environment so that the Government is in a position to generate the wealth and to provide the economic wherewithal that would enable the Government to improve the lot, particularly for the less privileged and disadvantaged members of the community.

We are doing a great deal. We are doing a great deal on the health front, clearly on the educational front, and on the social welfare side. The Government sees its responsibility as lying in providing help for those who are not able to help themselves. But for those who are able-bodied, those who can help themselves, then we must generate the employment prospects and the environment that will enable them to steadily improve their lot for themselves and for future generations as they have been able to do so in the past.

Question: Mrs Chan, you spoke about the need for a ministerial system, public debate, universal suffrage, many of which imply some sort of constitutional change. How long is the current constitutional situation tenable?

Mrs Chan: As you are aware, we do have a timetable laid down in the Basic Law, on the development of the democratic process. In the year 2004, as you know, we will have half the members of our legislature directly elected. And the Basic Law makes it quite clear that beyond the year 2007, the people of Hong Kong can decide for themselves how quickly to move towards the ultimate goal of universal suffrage.

I think for those of us particularly within the Administration, we are all feeling that the current system and particularly the relationship between the Administration and the legislature, is under some stress. Nevertheless, it is our sincere wish to continue to improve our relationship with the legislature. But it also takes a willingness on the part of the members of the legislature to work together with the Government in a constructive manner. And I have just indicated in my speech how this can be achieved.

But in the longer run, certainly beyond the year 2007, as I have also made clear in my speech, I do think that we need to think about, we need to discuss in a rational manner, and we need to generate a consensus on how fast we should move towards universal suffrage. And in that context, as I have also made clear, Beijing has a very legitimate interest in the constitutional development in Hong Kong and whatever consensus we come up with, we have to make sure that Beijing is comfortable with the pace of democratisation and that it is convinced that it is good for Hong Kong.

Question: Sorry, if I could just follow up. In your opinion, is Hong Kong moving quickly enough?

Mrs Chan: I think that very soon we will begin a discussion on the very complex issues involved in this whole question of constitutional development.

Question: Mrs Chan, over the last 10 years that I have been here we have seen a lot of progress in sustainable development and the environment and awareness thereof. With population pressures and growing economic concerns and social splits, this still is an issue that I feel very strongly about here in Hong Kong because we have to have quality of life to be able to make this an international city and grow.

You have been involved in cross-boundary commissions regarding this and I wondered if you've had any thoughts about how we can move forward in the years ahead in bringing a better sustainable environment for the Pearl River Delta and for Hong Kong?

Mrs Chan: The first point I would make is that I am setting up a unit on sustainable development in my own office, very, very soon. That just underlines our commitment to pursuing the whole question of sustainable development and making sure that the factors involved in sustainable development are taken on board and given full consideration at a very early stage of whatever policies we decide to formulate.

You are quite right that in terms of the environment, co-operation with the Mainland, particularly with the Guangdong and Shenzhen authorities, it's crucially important. We have set up a forum in which we can exchange views, we can discuss issues with our counter-parts across the border. We are making good progress there. We are taking a look, particularly at how to improve air quality. There is a consultancy going on at the present moment and this consultancy should be finished very, very shortly. And in the light of that consultancy, hopefully we will be able to make decisions jointly with our counterparts across the border as to how we can control air quality.

Within Hong Kong itself, we have in the past expended substantial sums of money to improve the environment because I do agree with you, the quality of life, the quality of our environment, is very important not only for the community as a whole but also in terms of attracting investors to come and live and work in Hong Kong.

And I hope you are aware of the various measures that are in the pipeline, particularly about improving air quality. We are making extremely good progress on that front. We are phasing out, very quickly and steadily, the entire fleet of diesel-driven taxis. We are using ultra low sulphur diesel. And we will be tackling buses and encouraging them to use cleaner fuels. So I think we are moving in the right direction. And with the setting up of the Sustainable Development Unit in my office, hopefully we will make even better progress.

Question: You have been famously described as 'Hong Kong's conscience' and as the 'canary in the coal-mine for Hong Kong's political development'. And I think, in some ways, you have encouraged or certainly not discouraged, the press from looking at you as an indicator of the progress or lack thereof in Hong Kong's political development. So I want to ask you to speak even more frankly than you have. You are leaving now and maybe you could talk. Politically, what does this indicate in terms of your feelings of frustration, perhaps, about Hong Kong's political development, or your feelings that you have reached limitations in terms of what you could do?

Mrs Chan: I have every confidence in the Administration under the leadership of C H Tung and under the leadership of Donald Tsang as Head of the Civil Service. I think we can take great pride in the fact that the Hong Kong Civil Service continues to be run by men and women of good conscience who are committed to the community here. They are committed to certain core values, which I have referred to, and which I underline again as being crucially important in ensuring that the Civil Service can continue to meet the community's expectations.

I am not leaving because I believe that things will go wrong. I am leaving because I happen to feel that after 39 years, with a clear successor waiting in the wings, it is time that I moved on and made way for new blood. I am a firm believer in the fact that nobody is indispensable, and Donald will be a most capable leader. The only thing that he lacks, probably, is my big smile. But he has his debonair bow-tie.

Question: I am a third-generation Hong Kong fellow here, so all my life is committed to Hong Kong. First of all, I want to thank you for your long and good service to Hong Kong. But that is not the gist of my question. The gist of my question is very simple. In Hong Kong we are successful because only about 25% of the people pay taxes. It is a wonderful system which we give the other 75% of the people an equal opportunity, so please don't change that.

But on the other hand, when you have universal suffrage, how do you protect the interests of these 25% that have to pay the tax and probably have no say in the legislature? And I say that with conviction because I went to study in America and there they say: 1776 - that taxation without representation is not right, therefore the United States of America was born.

Now, in 2007, if it is universal elections immediately, how do you protect this 25% of people who pay the taxes? Shall we start a revolution?

Mrs Chan: Several points I will make, Gordon, in response to your observations. First of all, the timetable. I am not saying and I daresay nobody in this room can predict whether in the year 2007 there will be direct one-man one-vote. That remains to be seen on whether there is a consensus within the community as to how fast we should move towards universal suffrage.

Secondly, I do know, Gordon, you have strong views about who should have the vote. I think your view is that those who do not pay tax should not have the vote. I would like to agree with you, Gordon, but I have to say I disagree. And why do you think those who are paying tax need any protection at all? I don't think they do.

Question: I think in the British judicial system, the fellow accused always has a chance to defend himself. I have never said that people who don't pay taxes don't have any right to vote. But it is a very dangerous system that if you have people who don't have to pay who would make all the decisions, then before you know it, it would be just like the masses in front of Tiananmen Square before Chairman Mao, and it would become like the French communes. What we want to do is to preserve the good of Hong Kong in that only a few million people and yet we have achieved an economic miracle. Therefore the important thing is, shouldn't we have some kind of balance so that the people can vote but also we have some safeguard for the people who pick up the tab. That is all I ask for. I never said that we should not let the people who don't pay don't have the vote.

Now, I'll let you into also a little history of why I am a convicted fellow on democracy. I named my son Thomas and his middle name is Jefferson.

Mrs Chan: Well, Gordon, I always like to have the last word and I hope you will give me the last word on this. I do agree with you that those who make decisions about spending should also have some responsibility of raising it. But that doesn't necessarily mean that everybody has to pay tax. I think what we want to see at the end of the day in the context of the evolutionary development of representative government in Hong Kong, is that those who make decisions, particularly about funding proposals and spending proposals in our legislature, should not only have the power to do so but should share the responsibility.

I think our system at the moment is lopsided and that is why I say it is untenable, in the sense that our legislature, quite naturally, wants more power. But unfortunately, most of the responsibility - indeed I would say all of the responsibility - still rests with the Chief Executive and principal officials like myself. And I do not think that in the long run that system is tenable.

End/ Thursday, April 19, 2001

NNNN