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Transcript of CE's press conference on Policy Address (with photo)
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    Following is the transcript (English portion) of the press conference given by the Chief Executive, Mr Donald Tsang, at the Central Government Offices New Annexe after delivering his Policy Address in the Legislative Council today (October 11):

Reporter: Earlier this year the Chinese Government, or at the very least a large Chinese Government-owned company, prevented the sale of Hong Kong's telecom network to foreign investors. Do you believe this incident affected Hong Kong's reputation as a free and fair place to do business. Do you believe foreign investors should be barred from owning a controlling stake in the telecom network and other sensitive assets in Hong Kong?

Chief Executive: I believe you are referring to what happened in PCCW, isn't it? (Yes). This is entirely a market operation. There are shareholders in that company and their shareholders are going to guard their own vested interests. We must leave it entirely to the market. As far as the role of the Government is concerned, that is very clear. We have a role to ensure that the services are provided in a satisfactory manner to members of the public. Whatever changes in ownership, and particularly in running of assets, will comply with what is regarded to be proper by the Securities and Futures Commission. This is what we do and this is a very limited role. We have absolutely no restriction about foreign ownership including the ownership of a telecommunications company. That is a commitment we made to the World Trade Organisation and that is a commitment we will continue to abide by. Just look at the mountain of investment flowing into Hong Kong in all sectors, in all sectors for that matter, there is absolutely no restriction at all. But as far as the market is operating, this is not a matter in which a government should intervene precipitously. What we are following and we have been telling PCCW that they must comply with the regulatory regime, any change of ownership will not affect the provision of service, and in doing so they must comply with what is written down in the code of practice and the rules of the SFC and also the Telecommunications Authority's rule.

Reporter: If there's one policy on which the community has a consensus it's the GST, and it's a consensus at this point against it. Completely missing from your Policy Address. Is the absence of it, no mention at all, an admission on your part that this is a non-starter?

Chief Executive: I have said already what I believe in GST. It is something which is important for us to raise for discussion with the community at large. Our position is very clear. We have not deviated from that at all. But there are limitations to what I can say in the Policy Address, particularly the subjects I should encompass. I should focus on the things which I believe the public generally attaches greater importance - matters like pollution, matters about family values, matters about education of our young and matters about economic development generally. These are more important issues which I should address and this is what is mentioned there.

But that doesn't mean that it's the entirety of the Policy Address. There's the Policy Agenda which sets out all the things we will continue to do. We can only persevere. GST is certainly a major government commitment. We have discussed it ad nauseam for the last few months and we will continue to discuss it. We are going to discuss it to make sure the whole public understand the issues involved, the matters we have to resolve, and agree on a way forward.

Reporter: I presume your reference to how it's not profitable to have prolonged debates over abstract sloganing is a reference to the criticism of Milton Friedman and the others of your comments on positive non-interventionism. I'm just curious. I mean you started this debate. There wasn't any debate until a few weeks ago when you said positive non-interventionism was no more. Why do you think it's wrong for critics to respond and why do you think it's wrong to have a debate about what appears to be a fundamental change of policy?

Chief Executive: First of all, positive non-interventionism is not a policy, it's a philosophy. The policy is we respect the market. We should be rigorous in our deliberations before intervening in the market in any way. That is the policy. I did not start the debate by raising this issue. I am not scared about debate, in fact I will continue to engage the public in a discussion of this matter. What is important is: Don't discuss and don't debate on a title, on a slogan. Discuss a substance. The substance is whether or not this Administration has been involved in serious market intervention. Let me tell you one fact. Since I've been involved in government spending programme in the early-90s, as Secretary for the Treasury of the previous Administration, this Hong Kong has been fortunate enough to secure the reputation as the freest economy in the world.

And it is a reputation gained through rigorous tests and examinations by rating agencies like Heritage Foundation, like Cator Institute and Fraser Institute and so on. And will continue to do that. I am asking people to debate the issue. Please debate it, but debate the substance. Don't waste your time on the term positive non-interventionism - a term which we stopped using more than 10 years ago in the Administration. So, this is what it's all about. I'm not afraid of engaging it, in fact I'm engaging you. And I'm quite happy to engage Milton Friedman. But was that article written by you? Oh, I see, not Milton Friedman. It doesn't really matter. What is important is I have a lot of respect for Professor Milton Friedman. He has done a whole world of good in the development of economic philosophy in the world. But let's come to grips with it. Look at what we do, don't debate on a slogan, a particular slogan which has not been used as far as the Administration is concerned, for nearly two decades.

Reporter: Many people are saying they are disappointed with your Policy Address because they feel it lacks concrete points and that you seem to be playing it safe. What is your reaction to this?

Chief Executive: I certainly respect people's views, but I believe there are things that are quite concrete. The proposals to help families educate their young are very specific and quite innovative new ideas are being introduced. Our ideas of dealing with the labour sector by commitment that we are going to introduce a Charter following which we may legislate if that Charter doesn't work. There are things I proposed quite specific in the Policy Address. Some are short-term, some are looking into the future, in particular the challenges that lie ahead. But we must have regard to the reality. The reality is that my remaining term all together lasts for eight months. Within that eight months what we have promised people we would do in accordance with the Policy Address is quite a substantial agenda and I hope this is going to gain public support.

Reporter:  Earlier in the address you said there is a need to enhance efficiency of cross-boundary cargo flows and you also said there is increasing cargo originating from the west side of the Pearl River Delta. But you did not mention at all in your address any progress in the Hong Kong-Zhuhai-Macao Bridge. Does this mean you don't expect any breakthrough in terms of progress of the Hong Kong-Zhuhai-Macao Bridge in the next eight months of this term?

Chief Executive:  I will be very disappointed if there is no progress. As I mentioned earlier I cannot say everything under the sun which this Administration is working on in the context of a one-hour Policy Address. I can only focus on the things which I believe to be most important. The other thing which are already going on which have been discussed for a long time including the Hong Kong-Zhuhai-Macao Bridge. This is a bridge which is important to connect Hong Kong and the west bank of the Pearl River, and it's an important conduit. There is no dispute about it's necessity. The question now is about funding, the completion of a feasibility study. We have to do it stage by stage. I have not lost sight of it. I am going to look at it, I am going to examine and pursue it until it is built within my ability. Particularly within this term, I will do my very best to push it forward.

(Please also refer to the Chinese portion of the transcript.)

Ends/Wednesday, October 11, 2006
Issued at HKT 18:44

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