I am grateful for opportunity to speak to this distinguished audience which has done so much to make Hong Kong the prosperous country it is today.
As the Prime Minister who entered into the agreement with China about Hong Kong's future, I have and shall always have an abiding interest in and concern for the people and events in this territory.
I believe that the Airport agreement, signed by Prime Minister Major so recently, was an outward and visible sign that the Government of the United Kingdom continues to work for the security and prosperity of Hong Kong's people well into the next century.
But perhaps the best evidence that Britain will continue to play a major role in Hong Kong beyond 1997, is not the statements of Government Ministers: it is that 40%; of the total capitalisation of Hong Kong's Stock Market is British-owned or British-managed.
That is a sign of our confidence, and I believe that it is well placed.
Events—tremendous events—happening across the world enable us to face the future with cautious optimism.
I will speak of three matters:
1. Events in the Soviet Union and Eastern Europe
2. Events here in the Pacific region
3. and third how all this affects Hong Kong and its future. [end p1]
1. The Soviet Union and Eastern Europe inevitably have dominated the news in the last few weeks.
It is instructive for a moment to consider why the Coup happened and why it failed.
The plotters believed that they could succeed because so much power—over the security apparatus, the armed forces, the bureaucracy and the economy—was still centralised.
The Communist Party was still strong.
Power had not yet been dispersed to the republics, there was little private property and not much free enterprise.
The authors of the coup acted because they feared that all of this was about to change—and in particular, that power was to be fundamentally and irreversibly devolved to the Republics and to the People.
Events have since confirmed the plotters' worst fears.
The coup failed because:
(i) though people had but recent experience of democracy, they wanted more and were prepared to fight for it;
(ii) they were not for a moment deceived by the perpetrators of the coup, who promised them something for nothing;
(iii) they wanted a western standard of living and they knew they must be prepared to face up to economic realities in order to secure that goal.
Finally, it failed because the Russian people rallied around their own national institutions and leaders. And in Mr Yeltsin they were led by one of those towering figures who, like Mr Gorbachev, have changed the course of history.
Now power is being dispersed from the centre to the Republics.
This is the best guarantee against future attempts to destroy democracy.
Devolution of power is also a necessary condition for successful economic reform. Of course, the power of government at every level has to be limited.
But there is far more chance of that happening if political decision-making is close to the people. [end p2]
It is not for us to try to decide the future shape and pattern of the Soviet Union. Our interest in the West—and more than our interest, our principled duty—is to help create the conditions for the peoples of that vast territory to live under institutions with which they are happy and which command their loyalty.
Only that will bring security for the rest of the world.
Perhaps events in the Soviet Union were influenced by the scenes shown on television in Romania, East Germany and Czechoslovakia when the people came out on the streets in their hundreds of thousands; when everyone saw that neither tanks nor Army could defeat a determined people, certain of the rightness of their cause.
Thus in recent times have modern communications changed the balance of politics against the tyrannies in favour of the people.
Both the countries of Eastern Europe and the Republics of the Soviet Union need our help.
They have already shown the direction in which they wish to go.
It is alleged that they can only be helped when the structures of liberty have been put in place.
But that is absurd.
What they need is our help to put those same structures in place: they do not know how to do it.
So we must now take a fresh look at what needs to be done.
The Asian Region
The successful economies of the world today are not only those distinguished by possession of great mineral wealth or by their favourable geographical location.
Here in the Asian Pacific region small states with few resources are achieving rates of economic growth which no-one else can match.
South Korea, Taiwan, Singapore, Thailand.
Among the more powerful countries Japan is one of the great post-war economic successes. [end p3]
Your success in Hong Kong is built not on fortunate circumstances, but on the creative talent of your people encouraged by a government which believes in enterprise and incentive.
For more than forty years after World War Two we have seen what could be called a great experiment to assess the comparative merits of capitalism and socialism.
Indeed, a few countries around the world were divided into capitalist and socialist states.
Let me take two examples—one from Eastern Asia, one from Western Europe.
First: Korea. Before the war it was northern Korea which had the bulk of that country's industrial and agricultural wealth—yet today living standards in the North are about a fifth of those in the South.
Second. Germany. East Germany—once considered the economic showpiece of communist Eastern Europe—now has barely one industry which is viable, when exposed to the pressures of open competition from West Germany and to a currency which is truly convertible.
Free enterprise capitalism is economic democracy, as people make their choices between the goods and services available day by day, indeed hour by hour.
It limits the power of government by maximising the power of the people.
Once you permit personal choice to rule through the market, it will in time extend to the ballot box too.
That has been the pattern from Latin America to South Korea. In the Soviet Union, political democracy came first, economic democracy is now following.
In China, economic reform and enterprise has started first, and just as we all know given a little freedom, Chinese people are born traders.
But free enterprise and democracy go together.
You cannot long enjoy the benefits of one without tasting the fruits of the other. [end p4]
And you cannot attack the one without endangering the other. [end p5]
I return to what is happening here.
Hong Kong—her industries, her services continue to thrive. Investment from the World's main capitalist countries holds up well.
Trading arrangements between Hong Kong and Guangdong increase; some two million people manufacture goods in that province to be marketed in Hong Kong—not to speak of the cross-border supplies of water, electricity and food.
The dependence of the one on the other feeds the prosperity of both.
The interests of both in the furtherance of the capitalist system are strengthened.
So, when you consider;
—the growing strength of the whole Pacific Region to which I have referred,
—the enormous potential trade as political and economic reforms bring prosperity to the Soviet Union,—and the rising standard of living of China's 1.1 billion people economic reforms become effective, then the scope for the remarkable talents and adaptability of the people of Hong Kong will be boundless.
And the increase in prosperity will bring great trading opportunities and will herald a new chapter in the hopes and dreams of millions of people.
A region rich in ancient art and culture will join the Western style economies like yours to raise the standard and quality of everyday life and of the global environment.
I myself believe that democracy will come to those countries whose leaders at present resist it.
It is the wave of the future, bringing as it does: Stability—with regular elections which either confirm or change a government peacefully by the authority of the people.
Prosperity—as political and economic freedoms reinforce one another.
Peace—because democracies will defend themselves but do not attack others. [end p6]
I began by saying that I am cautiously optimistic:-
Cautious—because we must keep a sense of proportion
Optimistic—because your past performances makes you sure of your ability to adapt to succeed —because those who would use force to get their way are finding that the human spirit is unconquerable, and that truth cannot be concealed
Moreover, now that the Soviet Union has defeated the coup of the hardline Communists, world attention will focus on China, and what she does, as never before.
I think perhaps Winston ChurchillWinston got it just about right, as he usually does when in his description of ‘The Journey of Life’, he said:
“Let us be contented with what has happened to us and thankful for what we have been spared. Let us treasure our joys but not bewail our sorrows. The glory of light cannot exist without its shadows. Life is a whole, and good and ill cannot but be accepted together.”
That way we too can tread the highway of the future with quiet and justified confidence.
I wish you well in all your endeavours.