1999 李光耀 香港政策研究所讲话

香港政策研究所资政李光耀的讲话，1999 年 10 月 25 日

https://www.nas.gov.sg/archivesonline/data/pdfdoc/1999102502.htm

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转型中的香港

过去三十年来，我每年都会访问香港，香港人民乐观进取的精神给我留下了深刻的印象。 无论情况有多麻烦，例如1966/67年红卫兵模仿者的喧闹示威，或1973年油价突然翻两番而导致经济衰退，香港人并没有感到沮丧或沮丧。 所以今年六月初我在香港待了几天，我惊讶于它完全不同的心情。 我遇到的人似乎因发现自己处于解决方案不明显的境地而感到沮丧。 香港目前的困境在很大程度上源于转型过程中的问题，事实证明转型过程比预期更加困难。 部分原因在于上任总督五年来的政策，而亚洲金融危机又加剧了这种政策。 在香港度过这个过渡阶段之前，不可能对香港的未来做出任何长期预测。

1992年至1997年的五年间，中国和东亚繁荣，香港繁荣。 香港接受了彭定康主持的民主和人权速成班，并得到了西方媒体，尤其是美国和英国媒体的支持。 人们普遍担心，中国的高压手段会否定香港人所珍视的旧制度的一切。

英国人相信，他们可以在香港人民的心中铭刻言论自由原则的神圣性，尤其是新闻自由、像立法会这样的代表大会拥有最广泛选举权的普选、保护基本自由的权利法案、 法治和司法独立，向中国移交一个不可逆转的民主香港。 这样，香港人就会抵制失去他们所懂得珍惜的东西。 人们认为经济会自行发展，一切都会好起来。 在新加坡等其他社会，政府的首要关注和主要责任是提供人民的福祉：这意味着食物、住房、健康、教育以及能够提供就业机会和生存所需资金的经济（如果可能的话） 舒适的生活。 作为新加坡政府，我们要做的第一件事就是让人民明白为什么他们必须与政府、管理层和工会合作，为每个人谋生，即让经济运转。

1992年12月，我在香港大学演讲时，比较了新加坡和香港的政治演变：

“从1948年第一次立法会选举到1965年独立，新加坡经历了17年的悠闲过渡。1955年，新加坡出现了第一个部分选举产生的政府，并任命了首席部长。1959年，新加坡实现了完全的内部自治 几年之内，立法会或政府中没有英国官员取代了所有关键职位的英国官员，但这些当地公务员已经有了一些时间来适应他们的工作。

香港的转型是短暂且迅速的。 第一次立法会选举于 1991 年 9 月举行，距离英国统治结束还不到六年。 下一次选举将于 1995 年举行，距离英国统治结束仅两年。 只有首席法官和警务处处长是香港人。 短短四年多的时间，很多重要部门的负责人肯定是香港人。 过渡并不容易。 如果没有信心的氛围，就可以维持士气、纪律和标准，这将是危险的。 因此，必须谨慎处理过渡时期的政治问题。”

然后我接着阐述了我认为对香港来说重要的事情，即为这一转变做好准备：

“在未来四年内，香港总督必须与中国内地官员协商，决定接任行政当局的人选。他们必须有能力管理香港的制度，并具有深厚的、几乎是本能的、 理解共产党的普通话头脑，否则一个国家、两种制度就不能顺利进行。

我相信找到合适的人选来胜任这些工作比香港是否有20名、40名或更多议员直接选举进入立法会更为重要。 香港从来没有实行过自治。 它一直由任命的总督统治。 当他们好的时候，香港就会繁荣。

英国总督对伦敦的殖民地大臣负责，而不是对香港人民负责。 根据《基本法》第四十三条，香港行政长官“对中央人民负责”

第七十三条第五款授权立法会“就政府的工作提出质询”。

香港没有努力与大陆趋同与合作，而是走上了相反的道路，在香港人民中巩固当代英国的政治态度和做法。 彭定康总督召开没完没了的新闻发布会，让人们期待下一任特首也能如此开放和负责。 许多香港人开始相信这些做法将保留他们以前繁荣的生活方式。 事实上，它使香港人民两极分化，分为意识形态派和务实派。

为了使香港的问题更加复杂化，政府开始进行福利改革。 1992年我在香港大学演讲时说：

“从60年代末开始，我几乎每年都会去香港，去研究和理解为什么香港人比新加坡人工作更有干劲和活力，并向他们学习一些东西。他们为自己的付出付出了代价。 他们支付教育费用，支付医疗费用；政府不欠他们任何东西，只提供法律和秩序，他们在山坡上搭建自己的棚屋，建立了现代香港。

通过对香港的观察，我得出的结论是，国家福利和补贴削弱了个人成功的动力。 我惊讶地看到香港工人在繁荣时期轻松地调高工资，在经济衰退时调低工资。 我决心扭转我党继承或复制英国工党政策的福利政策。 我缩减了补贴，除非补贴可以通过更好的教育、更好的健康和更好的住房来提高人们的生产力。

如果香港存在争夺政府组建权的政党政治，经济和社会利益集团以及工会就会出现。 那么财富再分配和福利补贴的压力将是不可抗拒的。

无论过去成功的原因是什么，未来都会带来更多的焦虑和不确定性，这主要是因为中国政治的不确定性。”

我很容易就明白为什么香港比新加坡更有竞争力。 但现在的香港已经不一样了， 人民期盼香港特首能够给香港带来美好生活。 无论是鸡流感，还是红藻杀死鱼类，还是房地产和股票价值下跌，人们都期望政府做出弥补。

行政长官现在面对的立法会采取反对立场可以获得更多好处。 反对是赢得民众支持并在下一轮连任的简单方法。 然后，李嘉诚先生警告说，他不会投资100亿美元在一个项目上，因为反对党要求他不要行使法律权利，将不按揭还款的人告上法庭。 这些都是初期问题，是可以解决的。 随着时间的推移，香港人将必须在竞争的社会和经济群体之间达成社会契约：首先合作并扩大经济蛋糕，其次重新分配蛋糕的份额并使自由市场政策的结果更加公平。 换句话说，政府应该从GDP中拿出多少，以什么样的税收，以及多少税收应该用于教育、医疗、住房、娱乐和休闲设施的补贴，以使人们获得机会的机会更加均等。 下一代。 雇主和工人必须就经济如何最好地运转达成妥协，以便企业保持竞争力并向员工支付他们能负担得起的最好工资。 当香港因货币贬值而面临成本上升和工资过高时，雇主无法让工会和工人同意减薪。

人们感到沮丧的是，每个人都为自己努力工作并且每个人都成功（或多或少）的旧制度现在不起作用了。 然而，不可能回到旧制度。 期望和态度已经改变。 从长远来看，一个反对派、不承担任何责任的立法会，无法为善治作出贡献。 给民粹主义政治带来现实感的方法是让政治领导人承担起履行承诺的责任。 如果他们知道在赢得并掌握权力后必须兑现自己的承诺，那么他们要么改变政策和口号，要么就会紧随其后。 你必须找到解决方案，因为只要香港选举政治不负责任（这是你在殖民统治末期可以负担得起的），大量的精力和资源就会被浪费。

香港需要因地制宜地根据基本法调整政府体制。 发挥民主代表作用

政府在新加坡有效地运作，我们不得不对英国留给我们的宪法做出调整。 没有任何系统可以从架子上取下来并投入使用，就像一件外套必须根据人的长度和形状进行调整一样。

在我六月访问期间，我还发现香港人对他们的新身份感到不安。 香港浸会大学香港转型计划进行的民意调查显示，老一辈香港人称自己为“香港华人”，年轻一代则称自己为“香港人”。 当家长被问及是否建议每天早上在学校唱中国国歌并升国旗时，85%的受访家长不同意。 这些数字反映了他们对被纳入中国的另一个实体的不安。 香港的自我认同必须得到界定和具体化。 你们是中国的一部分，但在接下来的48年里，你们是一个特殊的群体，被称为特区华人或香港华人。 除非大家认识到这个问题的重要性，否则特区政府与香港市民之间很难建立新的社会契约所需的团结。 在香港度过这个过渡阶段之前，对其未来趋势的任何预测都只能是暂时的。 旧时的香港已成为历史。 香港的未来取决于香港人民如何共同促进其群体利益。

香港与中国的融合

二十年来，中国的开放政策给香港带来了繁荣。 与中国的商业活动使香港成为世界十大贸易国家之一。 你们的金融中心有很大的中国成分。

香港与内地的经济融合加速了其从制造业经济向服务业经济的转型。 当你的低端制造业转移到广东以利用较低的土地和劳动力成本时，它为服务业释放了资源。 结果，制造业活动占香港GDP的比例从1984年的24%下降到1997年的不足7%。在金融服务业增长的带动下，服务业的比例飙升至85%。 如今，香港以服务业为基础的经济是全球第九大商业服务出口国。

香港学者和经济规划者问，现在是否应该通过发展高科技，特别是IT产品来建立制造业。 制造业为经济提供了一定的压舱石。 在香港的新形势下，重新审视经济政策选择是有益的，但不要忘记，过去将所有举措交给私营部门的做法效果很好。

与香港不同，新加坡决定维持占GDP约四分之一的核心制造业基地，以实现更安全的平衡。 为了保持竞争力，我们不断将制造生产升级为更高附加值的活动。

香港可以最大限度地发挥与中国的联系。 高科技制造业潜力巨大。 中国工程师和香港企业家的技能是互补的。 香港企业家有智慧、有能力将中国科学家的创新商业化，并将其转化为利润。 中文电子词典就是这种协同作用的一个例子。 将整个英语句子翻译成中文的技术在中国已经存在了一段时间。 但香港公司 Group Sense 通过与中国研究中心结成战略联盟，获得了这项技术并将其商业化。

香港及其他中国城市

未来25年中国经济每年可实现5%至7%的增长。 中国的蛋糕还会继续做大。 香港的涉华业务将会增加。 然而，许多中国沿海城市正在努力发展与你们类似的能力。 香港不会永远是华南沿海唯一的商业金融中心和贸易港口。 一些公司已将地区总部从香港迁至上海或北京，以更贴近市场并培养本地员工。 雀巢已将地区总部从香港迁至北京，飞利浦电子则迁至上海。 在航运方面，香港面临来自中国发展中的天津、上海、宁波和深圳港口的竞争。

上海——曾经是亚洲最国际化的城市——是许多金融改革的试验场。 中国希望将浦东陆家嘴金融贸易区建设成为世界级金融中心。 放宽限制并提供激励措施以吸引外国金融机构和跨国公司。 例如，1997年，浦东成为中国第一个允许外资银行开展人民币业务的地区。 截至1999年9月，全市共有19家外资银行从事本币业务。

您对 Chi 的价值

就在于与中国其他城市的不同。 香港在法律基础设施、强大的机构、管理专业知识以及金融市场的成熟度方面领先于上海和中国其他城市。 法治、所有政府立法和法规的透明度、为所有参与者提供公平的竞争环境、加上国际化的生活方式、方便的英语沟通，是香港领导人和人民必须确保保留的特征。 上海的缺点是法制不健全，服务业工作态度差。

两个相反的拉力

香港必须解决两个相反的问题。 为了对中国有用，它必须能够与具有不同社会、经济和政治制度的中国官员合作。 但它对中国有价值，因为它不仅仅是另一个中国城市。 英国统治下的香港与中国其他城市之间的区别使其成为中国与世界之间的宝贵中介。 不幸的是，一国两制，意味着旧香港的特色无法全部保留。 国防和外交事务已从英国手中转移到中国手中。 因此，教皇的访问被拒绝，美国的军舰和飞机也时常被拒绝入境。 但应尽可能多地培育和保留香港区别于其他中国城市的特色。

香港及新加坡

作为亚洲的两个商业中心，新加坡和香港在许多商业和金融服务方面相互竞争。 这不是零和游戏。 两者可以共同成长并获利。 两个城市之间的竞争促使每个城市在竞争力和相关性方面力争成为最佳。 市场足够大，足以让两国经济蓬勃发展。 此外，科技主导的金融服务业变革为我们之间的合作和协同创造了机会。

为了应对技术的力量，全球资本市场一直在经历结构性变化。 新的竞争对手，包括许多非传统的电子通信网络（ECN）和软件提供商，正在挑战交易所的特许经营权。 亚洲交易所拥有的时区特许经营权可能会因其他时区主要交易所延长处理时间而受到侵蚀。

我们正在应对这些变化。 新加坡和香港都在努力实现股票和衍生品交易所的股份制和整合。 这将使交易所更加商业化，通过提供更广泛、更有趣的产品、增加流动性、通过与其他交易所联盟创造高效、便捷的跨境交易能力，为投资者带来更大价值。

新加坡和香港作为该地区的主要交易所，拥有独特的合作机会，有助于促进区域资本市场的发展。 我们可以整合流动性池，降低区域发行人的资本成本，降低投资者的交易成本，并提供健全和透明的监管基础设施。

例如，越来越多的亚洲高科技初创企业现在寻求资金，而交易所可以满足这些资金。 一些亚洲交易所迅速做出反应，通过设立小市值或“高增长”董事会来满足这些需求。 不幸的是，与纳斯达克相比，这些董事会单独而言缺乏足够的规模。 新加坡和香港交易所可以将这些主板的交易联系起来，以创造更大的流动性并吸引跨境和区域投资者。 整合流动性池的通用功能为发行人、投资者和亚洲资本市场带来好处。

通信和信息技术是我们两国经济的新增长领域，合作空间广阔。 我们可以通过培养官员之间的持续交流来加强我们的机构联系。

新加坡和香港有着相似的历史。 两者都曾是大英帝国的贸易前哨。 第二次世界大战后，新加坡与其经济腹地分离。 我们于1965年成为一个独立国家，必须在世界上寻找自己的出路。 新加坡面临的挑战完全不同。 为了独立建国，新加坡必须对其政治、经济和社会未来做出艰难决定。 我们的企业必须适应该地区政治和经济状况的周期性变化。 因此，我们的企业实现了出口市场多元化，网撒得更广。 我们的制造生产网络遍布东南亚，我们的市场是国际性的。

香港从未有过独立或建国的前景。 相反，它已经回归中国，但在未来 50 年内拥有所有内部事务的完全自主权。 随着你们回归中国，我们的政治命运发生了分歧，将走上不同的道路。 政治和经济挑战

我们面临的长度将会有所不同； 因此，我们必须制定的战略和政策不会相同。 尽管如此，我们长期建立的关系仍然很有价值。 我们两国政府官员之间的实际合作并没有证实媒体关于致命竞争的报道。 我们俩都在世界竞争排行榜上名列前茅。 两者都在维护法治、致力于自由市场的诚实、高效的政府方面获得了高分。 当我们在全球化经济中与世界合作和竞争时，双方都可以从分享信息和经验中获益匪浅。

来自其经济腹地。 我们于1965年成为一个独立国家，必须在世界上寻找自己的出路。 新加坡面临的挑战完全不同。 为了独立建国，新加坡必须对其政治、经济和社会未来做出艰难决定。 我们的企业必须适应该地区政治和经济状况的周期性变化。 因此，我们的企业实现了出口市场多元化，网撒得更广。 我们的制造生产网络遍布东南亚，我们的市场是国际性的。

香港从未有过独立或建国的前景。 相反，它已经回归中国，但在未来 50 年内拥有所有内部事务的完全自主权。 随着你们回归中国，我们的政治命运发生了分歧，将走上不同的道路。 我们面临的政治和经济挑战将有所不同； 因此，我们必须制定的战略和政策不会相同。 尽管如此，我们长期建立的关系仍然很有价值。 我们两国政府官员之间的实际合作并没有证实媒体关于致命竞争的报道。 我们俩都在世界竞争排行榜上名列前茅。 两者都在维护法治、致力于自由市场的诚实、高效的政府方面获得了高分。 当我们在全球化经济中与世界合作和竞争时，双方都可以从分享信息和经验中获益匪浅。

Singapore Government Press Release, Media Division, Ministry of Information and The Arts,

Speech by Senior Minister Lee Kuan Ye the Hong Kong  Policy Research Institute, 25 October 1999

https://www.nas.gov.sg/archivesonline/data/pdfdoc/1999102502.htm

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Hong Kong in Transition

During my yearly visits to Hong Kong over the last thirty years, I was struck by the upbeat, can-do spirit of its people. However troublesome the situation, such as the noisy demonstrations of the imitators of the Red Guards in 1966/67, or the economic downturn caused by the sudden quadrupling of oil prices in 1973, Hong Kong people were not dismayed or despondent. So when I spent a few days in Hong Kong at the beginning of June this year, I was surprised by its completely different mood. The people I met seemed frustrated at finding themselves in a situation where the solutions were not obvious. Much of the present malaise in Hong Kong arises from the problems of a transition that proved more difficult than expected. In part it was because of the five years of the last governor's policies, aggravated by the Asian financial crisis. Until the territory has come through this transition phase it is not possible to make any long term forecasts on Hong Kong's future.

In the five years from 1992 to 1997, Hong Kong boomed when China and East Asia were prospering. Hong Kong was taken through a crash course in democracy and human rights conducted by Chris Patten and supported by the Western, especially the US and UK, media. The prevailing concern was that the heavy hand of China would negate everything that Hongkongers valued of its old system.

The British believed they could etch in the minds of Hong Kong people the sanctity of the principles of freedom of expression especially of the press, popular elections with the widest franchise to a representative assembly like LEGCO, a Bill of Rights to protect fundamental liberties, the rule of law and the independence of the judiciary, and hand over to China an irreversibly democratic Hong Kong. Then Hong Kong people would resist losing what they had learnt to value. It was assumed that the economy would look after itself and all would be well. In other societies like Singapore, the first concern and primary responsibility of a government is to provide for the people's wellbeing: that means food, shelter, health, education, and an economy that will provide the jobs and the wherewithal for survival, and if possible a comfortable life. The first thing we, as the government in Singapore, had to do was to get the people to understand why they had to work together with the government, management and unions to make a living for everyone, i.e. get the economy going.

In my lecture at the University of Hong Kong in December 1992 I had compared the political evolution of Singapore with that of Hong Kong:

"Singapore had a leisurely 17-year transition from the first elections to the Legislative Council in 1948 to independence in 1965. In 1955, Singapore had our first partially elected government with an elected Chief Minister. In 1959, Singapore had complete internal self-government with no British officials in the Legislative Council or in Government. Singaporeans replaced British officials in all key jobs within a few years but these local civil servants had already had some time to grow into their jobs.

Hong Kong's transition is short and will be swift. The first elections to Legislative Council were in September 1991, less than six years before the end of British rule. The next elections are due in 1995, only two years before the end of British rule. Only the Chief Justice and the Commissioner of Police are Hongkongers. In just over four years, many important heads of departments must be Hongkongers. The transition will not be easy. It will be dangerous to assume that morale, discipline and standards can be maintained if there is no climate of confidence. So the politics of the transition has to be sensitively handled."

I then went on to spell out what I thought was important for Hong Kong, namely to prepare for this transition:

"Within the next four years, Hong Kong's Governor must in consultation with his PRC counterparts, decide on the men who will take over the administration. They must have the ability to run the system in Hong Kong and also have a deep, almost instinctive, understanding of the Communist Mandarin mind. Otherwise one country, two systems, will not work smoothly.

I believe finding the right men for these jobs is more critical than whether Hong Kong has 20 or 40 or more members who are directly elected to the Legislative Council (LEGCO). Hong Kong has never had self-government. It has always been ruled by appointed Governors. And when they were good, Hong Kong prospered.

British governors were accountable to the Secretary of State for the Colonies in London, not to the people of Hong Kong. Under Article 43 of the Basic Law, Hong Kong's Chief Executive is "accountable to the Central People's Government and the Hong Kong SAR". Article 73(5) empowers the LEGCO "to raise questions on the work of the government".

Instead of working towards convergence and co-operation with the mainland, Hong Kong was set on a contrary course, to entrench contemporary British political attitudes and practices in the people of Hong Kong. Governor Patten held endless press conferences so that people came to expect the next Chief Executive to be as open and accountable. Many in Hong Kong began to believe that these practices would preserve their previous prosperous way of life. In fact, it polarised the people of Hong Kong, between those who were ideological, and those who were pragmatic.

To compound Hong Kong's problem, the government embarked on welfare reforms. In my 1992 lecture at Hong Kong University, I said:

"From the late '60s, I have visited Hong Kong almost every year, to study and to understand why Hong Kong people work with so much more drive and vigour than the people in Singapore, and to learn something from them. They paid for their education, they paid for their medical services; the government owed them nothing and provided only law and order. They made their own housing in little shanty huts on the hillsides. They paid their way, and built modern Hong Kong.

Through Hong Kong watching, I concluded that state welfare and subsidies blunted the individual's drive to succeed. I watched with amazement the ease with which Hong Kong workers adjusted their salaries upwards in boom times and downwards in recessions. I resolved to reverse course on the welfare policies which my Party had inherited or copied from British Labour Party policies. I scaled back on subsidies except where they made the person more productive through better education, better health and better housing.

Had there been party politics in Hong Kong competing for the right to form the government, economic and social interest groupings and trade unions would have emerged. Then pressures for redistribution of wealth and subsidies for welfare would have been irresistible.

Whatever the reasons for past success, the future promises more anxiety and uncertainty largely because of the uncertainties of the politics of China."

I recognised easily why Hong Kong was more competitive than Singapore. But Hong Kong has now become different; its people expect the Hong Kong Chief Executive to deliver the good life. Whether it is chicken flu, or red algae killing fish, or the property and stock values going down, people expect the government to make amends.

The Chief Executive now faces a LEGCO that has more to gain by taking an opposition stand. Opposition is the easy way to win popularity and get re-elected in the next round. Then there was Mr Li Ka Shing warning that he would not invest US$10 billion in a project because an opposition party was demanding that he should not exercise his rights under the law to take people to court for not meeting their mortgage payments. These are teething problems and can be resolved. Over time, Hongkongers will have to arrive at a social contract between competing social and economic groups: first to co-operate and increase the economic pie, next to redistribute the shares of the pie and make more equitable the results of free market policies. In other words how much of the GDP should the government take, in what kinds of taxes, and how much of the taxes should be spent on subsidies for education, health, housing, recreation and leisure facilities, to make more equal the chances of the next generation. Employers and workers must reach an accommodation on how the economy can best work so that enterprises stay competitive and pay the best wages they can afford to their employees. When Hong Kong was confronted with rising costs and over-high wages as a result of currency devaluation in the region, the employers were not able to get the unions and workers to agree to any reduction of wages.

People feel frustrated that the old system where everybody worked hard for himself and everybody succeeded (more or less), is now not working. However, there cannot be a return to the old system. Expectations and attitudes have changed. In the longer run, a LEGCO which is oppositionist and shoulders no responsibility, cannot contribute to good governance. The way to bring a sense of reality to populist politics is to saddle the political leaders with the responsibility of fulfilling their promises. If they know that after winning and assuming authority they have to deliver on their promises, then they either change policies and slogans, or they will be out on their heels. You will have to find a solution to this because so long as Hong Kong electoral politics is responsibility free (something you could afford during the tail end of colonial rule), much energy and resources will be wasted.

Hong Kong needs to adapt and adjust its system of government under the Basic Law to fit its circumstances. To make democratic representative government work effectively in Singapore, we had to make adjustments to the constitution the British left us. No system can be taken off the shelf and made to work, just as a coat off the peg has to be adjusted to suit the length and shape of a person.

During my visit in June, I also found Hong Kong people uneasy about their new identity. Polls carried out by the Hong Kong Transition Project at the Hong Kong Baptist University disclosed that the older generation of Hongkongers refer to themselves as "Hong Kong Chinese", the younger generation as "Hong Kong people". And when parents were asked about a proposal to sing the Chinese national anthem and to raise the national flag every morning in school, 85% of parents polled did not approve of this. These figures reflect their unease at being absorbed into a different entity of China Chinese. Hong Kong?s self-identity has to be defined and crystallised. You are a part of China, but for the next 48 years, you are a special sub-group known as the SAR Chinese, or Hong Kong Chinese. Unless you realise the importance of this issue, it will be difficult to forge that solidarity necessary for a new social compact between the SAR Government and Hong Kong people. Until Hong Kong has come through this transition phase, any forecast of its future trends can only be tentative. The Hong Kong of old is history. The Hong Kong of the future depends upon how the people of Hong Kong together promote their group interests.

Hong Kong's Integration with China

In the last two decades, China's policy of opening-up has brought prosperity to Hong Kong. Business activities with China have made Hong Kong one of the world's top ten trading nations. And your financial centre has a large China component.

Hong Kong's economic integration with China accelerated its transformation from a manufacturing to a service-based economy. When your low-end manufacturing activities relocated to Guangdong to take advantage of lower land and labour costs, it freed resources for the service industries. As a result, the proportion of manufacturing activities in Hong Kong's GDP fell to less than 7% in 1997, compared with 24% in 1984. The share of services ballooned to 85%, led primarily by growth in financial services. Today Hong Kong's service-based economy is the world's 9th largest exporter of commercial services.

Hong Kong academics and economic planners have asked whether you should now build up a manufacturing sector by going into high tech, especially IT products. Manufacturing provides a certain ballast to the economy. In Hong Kong's new situation it is useful to re-examine your economics policy options, always not forgetting that in the past, leaving all initiatives to the private sector has worked well.

Unlike Hong Kong, Singapore has decided to maintain a core manufacturing base of about one-quarter of GDP for a safer balance. To remain competitive, we continually upgrade our manufacturing production to higher-value added activities.

Hong Kong can maximise its links with China. There is vast potential in high-tech manufacturing. Skills of Chinese engineers and Hong Kong entrepreneurs are complementary. Hong Kong's entrepreneurs have the savvy and ability to commercialise innovations by Chinese scientists and translate them into profits. The Chinese electronic dictionary is one example of this synergy. The technology that translates whole English sentences into Chinese, had already existed in China for some time. But Group Sense, a Hong Kong company, was able to capture the technology and commercialise it, by forming strategic alliances with Chinese research centres.

Hong Kong and other Chinese cities

China's economy can achieve 5-7% growth annually for the next 25 years. The Chinese pie will continue to grow. Hong Kong's China-related businesses will increase. However, many Chinese coastal cities are trying to develop capabilities similar to yours. Hong Kong will not always be the only business and financial centre and trading port on the south China coast. Some companies have moved their regional headquarters from Hong Kong to Shanghai or Beijing, to be closer to their markets and to develop local staff. Nestle has relocated its regional headquarters from Hong Kong to Beijing, while Philips Electronics has moved to Shanghai. In shipping, Hong Kong faces competition from China's developing ports in Tianjin, Shanghai, Ningbo, and Shenzhen.

Shanghai - once Asia's most cosmopolitan city - is the testing ground for many financial reforms. China wants to develop the Lujiazui Finance and Trade Zone in Pudong into a world-class financial centre. Restrictions are being relaxed and incentives offered to attract foreign financial institutions and multinationals. In 1997, Pudong for example became the first place in China where foreign banks could conduct renminbi transactions. By end of September 1999, there were 19 foreign banks engaged in local currency activities in the city.

Your value to China lies in being different from other Chinese cities. Hong Kong has a lead over Shanghai and other cities in China in legal infrastructure, strong institutions, management expertise, and the sophistication of its financial markets. The rule of law, the transparency of all government legislation and regulations, a level playing field for all players plus its cosmopolitan lifestyle, with ease of communication in the English language, are features Hong Kong's leaders and people must ensure are retained. Shanghai's drawback is its inadequate legal system, and poor work attitudes in its service sector.

Two contrary pulls

Hong Kong has to resolve two contrary pulls. To be useful to China, it must be able to work with Chinese officials who have different social, economic and political systems. But it is of value to China because it is not just another Chinese city. The difference between Hong Kong under British rule and other Chinese cities was what made it a valuable intermediary between China and the world. Unfortunately one country, two systems, means that not all the features of old Hong Kong can be retained. Defence and foreign affairs have moved from British to Chinese control. Hence the Pope was denied a visit and US warships and planes are from time to time denied entry. But as many as possible of the characteristics that distinguished Hong Kong from other Chinese cities should be assiduously cultivated and retained.

Hong Kong and Singapore

As two business hubs in Asia, Singapore and Hong Kong compete with each other for a number of business and financial services. It is not a zero sum game. Both can grow and profit together. Rivalry between the two cities spurs each to strive to be the best in competitiveness and relevance. The market is big enough for both economies to thrive. Furthermore, technology-led changes in the financial services sector open up opportunities for co-operation and synergy between us.

The global capital markets have been undergoing structural changes in response to the forces of technology. New competitors, many non-traditional like electronic communication networks (ECNs) and software providers, are challenging the franchise of exchanges. The time zone franchise that Asian exchanges have owned risk being eroded by the extension of processing hours by dominant Exchanges in other time zones.

We are responding to these changes. Both Singapore and Hong Kong are working to demutualise and integrate their stock and derivatives exchanges. This will make the exchanges more commercially oriented, giving greater value to their investors by offering a wider and more interesting range of products, besides increasing liquidity, and creating efficient and convenient cross-border trading capability through alliances with other exchanges.

Singapore and Hong Kong, premier exchanges in the region, have a unique opportunity to work together and help spur the development of the regional capital market. We can integrate liquidity pools, lower cost of capital for regional issuers, lower trading costs for investors and provide a sound and transparent regulatory infrastructure.

For instance, a growing number of Asian, high-tech start-ups now seek funding, which can be met by the exchanges. Some Asian exchanges have responded quickly to meet these needs by setting up small market capitalization or "high growth" boards. Unfortunately, individually, these boards lack critical mass when compared to Nasdaq. The Singapore and Hong Kong exchanges can link up trading in these boards to create greater liquidity and appeal to cross border and regional investors. A common capability that integrates liquidity pools provides benefits for issuers, investors and Asian capital markets.

There is ample room for collaboration in communication and information technology, a new growth area in both our economies. We can strengthen our institutional links by cultivating the on-going exchanges between our officials.

Singapore and Hong Kong share similar histories. Both were former trading outposts of the British Empire. After World War Two, Singapore was separated from its economic hinterland. We became an independent nation in 1965, and had to find our own way in the world. Singapore's challenges are totally different. Thrust into nationhood on its own, Singapore had to make hard decisions on its political, economic and social future. Our businesses had to adjust to periodic changes in the region's political and economic conditions. As a result, our businesses have diversified their export markets and cast their nets wider. Our manufacturing production network spans Southeast Asia and our markets are international.

Hong Kong never had the prospect of independence or of nation-building. Instead, it has reverted to China, but with full autonomy in all internal matters for the next 50 years. With your reversion to China, our political destinies have diverged and will take different paths. The political and economic challenges we face will be different; hence the strategies and policies we have to work out will not be the same. Nevertheless our long established ties will be valuable. The practical co-operation between officials of our two governments do not bear out media stories of deadly rivalry. Both of us are rated at the top of world competitive tables. Both score high marks for honest and efficient government that uphold the rule of law, and are committed to free markets. Both have much to gain from sharing information and experience as we co-operate and compete against the world in a globalised economy.

from its economic hinterland. We became an independent nation in 1965, and had to find our own way in the world. Singapore's challenges are totally different. Thrust into nationhood on its own, Singapore had to make hard decisions on its political, economic and social future. Our businesses had to adjust to periodic changes in the region's political and economic conditions. As a result, our businesses have diversified their export markets and cast their nets wider. Our manufacturing production network spans Southeast Asia and our markets are international.

Hong Kong never had the prospect of independence or of nation-building. Instead, it has reverted to China, but with full autonomy in all internal matters for the next 50 years. With your reversion to China, our political destinies have diverged and will take different paths. The political and economic challenges we face will be different; hence the strategies and policies we have to work out will not be the same. Nevertheless our long established ties will be valuable. The practical co-operation between officials of our two governments do not bear out media stories of deadly rivalry. Both of us are rated at the top of world competitive tables. Both score high marks for honest and efficient government that uphold the rule of law, and are committed to free markets. Both have much to gain from sharing information and experience as we co-operate and compete against the world in a globalised economy.