Chief Executive's transcript

Wednesday, October 8, 1997


The following is the transcript (English part) of the Chief Executive, Mr Tung Chee Hwa, at a press conference on his first Policy Address held this afternoon:

Reporter : Mr Tung, at the end of your address you had some very impressive numbers on spending. Could you say how much of that spending over the next five years is going to come out of taxes - specifically any new taxes - and how much would come out of our reserves, and specifically how much?

Mr Tung: You know our taxes are very low and very predictable. And we will continue to make sure that taxes are low and predictable. And secondly, we have very conservative fiscal management policies and we will continue this very conservative fiscal management policies. And thirdly, the growth in our recurring expenditure will not exceed the growth in our economy. So we use this as a base as we move forward because these are the reasons for our past success and we are not going to change that and we will continue to rely on that. And looking at the numbers, working closely with the Finance Branch, we can achieve these objectives.

Reporter : You talk in your report about the fact that Hong Kong people have been cut off from the motherland and they need to understand China. But the reverse is also true isn't it, because the Chinese communist leaders, many of them were educated in the Soviet Union and two or three years in the Stalin car-plant isn't necessarily a good introduction to what is going on in Hong Kong? Can you play any role in increasing the understanding of Hong Kong's way of life in the mainland, because it is my belief that many people in the mainland would like a touch of Hong Kong's life and not many people in Hong Kong would like very much of the mainland's life?

Mr Tung: I think, Graham, you are absolutely right, we all have to understand each other. And I would also like to suggest to you: go and visit China frequently to find out how much progress they have made. That is also very important. We all need to understand each other a great deal more.

Reporter : Can you do anything about it?

Mr Tung: We will all try. All of us must try. And as I said in my policy speech, I am very keen to enhance Hong Kong people's understanding of Chinese culture and history. But I also mentioned the fact that Hong Kong's culture is a mixture of the east and the west and that Hong Kong could become the centre for people from overseas to understand Chinese culture and history, and similarly, for people from China to understand the culture of the west, and this is a role we can play.

Reporter : You mentioned the 10 year evolution towards democracy, step by step. But in the Basic Law, after the first 10 years it is very vague what happens. When do you think is an appropriate time to start discussing and debating the specifics and for you to make your own proposals on what you would like to see happen?

Mr Tung: I think all of us are thinking about these issues all the time and we will take time before we move forward because we have just begun the process, and I have not formed a firm view as to when we should go forward in this. I think a 10 year time frame is really quite reasonable. Looking at the history of many other nations of the world, from indirect elections to direct elections and also to universal suffrage, many countries take years and years and years and years. And I think the way we are moving about it is the right way. In the meantime it gives us an opportunity to digest what we have today from that point of view, and also focus on some of the more pressing issues which we have. And as I said earlier on, the important thing is to make sure that this government is accountable to the people; the important thing is to make sure that the rule of law continues to be strong; the important thing is to make sure that freedom prevails. And we will make sure all this continues in Hong Kong.

Reporter : You said that you have long term solutions to the property sector. But your problems are immediate. So I want to ask you, do you see speculation increasing very much in the near term in the property market?

Mr Tung: The problem of property prices is as a result of many long term issues and therefore solution is a long term solution. I think what we are doing will be able to ensure that the property market will slowly, slowly go towards a soft landing. There is no magic solution to this. If you ask me would speculation increase, I would say we are a free market; speculators can do what they want. What we need to do as a government is to make sure that we supply enough land to make sure there are enough houses available, enough units available. And at the same time, if speculation really gets out of hand we are ready to hit at it. And that is the way we will be going about it.

Reporter: You have announced some committees and commissions but despite that you are also willing to invest $88 billion in the long term, for five years.

Mr Tung: Sorry, I can't quite get you.

Reporter: Sorry. You said in your policy address that you will form committees and commissions. But despite that, you are investing $88 billion in the long term on capital expenditure and infrastructure. So how would you justify that amount in terms of returns on investment? And also, how did you come up with the $88 billion? I know that for Chinese it is quite a lucky number so is it by design or a coincidence?

Mr Tung: It is not by design. Not at all. These are long term investments in our infrastructure - investment in schools -that will really anchor us for the 21st century and these are very important investments. But I have repeatedly looked at the numbers and we all know, within the government structure, the past success of prudent financial management policy will not change, and it is within that framework we come out with these numbers.

Reporter: Mr Tung, there has been quite a long- running debate between those who advocate a continuation of the policy of positive non-interventionism and those who want a strong industrial policy to boost the manufacturing industry. Given the lack of concrete measures in your policy address for the manufacturing industry, does this mean the debate has now been settled against the Singapore-style industrial policy?

Mr Tung: We have never advocated a Singapore-style industrial policy. I don't believe in it. But on the other hand, Singapore has been successful in what they do. And we are successful in what we do and we will continue on our own path. But I think what I am suggesting is that we need to look at this thing carefully, how we move forward on hi-technology and industrial development. And this is why, again, I have suggested yet another committee to look at this and to give me advice as to how we move forward on this issue. I will recruit local industrialists, scientists, academics. And in fact I have asked Nobel Laureate Yang Chang Ling(?) to head this particular committee and he has agreed to do that.

* Photo: Chief Executive answers questions from the media at a press conference