The unexpected move by the Government to directly intervene in the financial markets on 14 August 1998 had ignited fierce debates both within the Hong Kong community and in the wider international financial circle. Ironically, most politicians had kept unusually quiet in the wake of this sudden controversy. My instant response in public was that our Government had little choice but to do all it can to maintain market order. I predicted that the move would result in an immediate windfall profit for the Exchange Fund but the Government must refrain from an ongoing market operation after August. I also urged the Government to actively seek international support and co-operation as a matter of urgency and to restructure our financial markets to increase their transparency and the costs to be borne by speculators. The Government did exactly all those and the Financial Secretary had just offered me a directorship of the Exchange Fund Investment Limited.

The keenly awaited Policy Address was delivered to disappointed audiences on 7 October 1998. It appeared that the Chief Executive (C.E.) had only managed to make a few adjustments to his previous policies and that there was no miracle rabbit pulled from his magic hat. However, my own reading of this unpretentious Policy Address is that it will actually steer Hong Kong back onto a proper track once again. A stable property market helped by falling interest rates and a softer US dollar will gradually restore business confidence. The attempt to nurture a few more selected economic activities to act as pillars of the economy is far-sighted and will, in the long run, provide a more diverse and mature basis to ensure Hong Kong's economic strength and stability.

The Chief Executive had also made the long overdued move to reshuffle his team of executives. Though still moderate in scale, the move had been widely read as a sign that he was, at last, ready to take full charge of the Civil Service machinery.

II. Committees and Panels

1. Public Accounts Committee (PAC):

The first meeting of the PAC will be held on 29 October 1998. It will focus on the Government's Minutes in response to the PAC Report No. 29 and the draft timetable for the PAC to consider the Director of Audit‘s Report Nos. 30 and 31.

2. Financial Affairs Panel:

The Panel held 6 meetings since the last report. A series of 4 meetings were devoted to discuss "Actions taken by Government in the foreign exchange, stock and futures markets"

It is likely that the term of reference of this Panel will be widened shortly to cover the entire spectrum of policies on economic development.

3. Welfare Services Panel:

The Panel held 2 meetings since the last report. The Panel studied the neighbourhood level community development projects, welfare services for the elderly and the comprehensive Social Security Assistance Scheme.

4. Economic Services Panel:

The Panel held 2 meetings since the last report. The Panel studied the operation of the Hong Kong International Airport and had set up a separate Select Committee to investigate into the causes behind its opening saga.

5. Information Technology and Broadcasting Panel:

The Panel held 4 meetings since the last report. The Panel mainly focused on the 1998 Review of Fixed Telecommunications and 1998 Review of Television Policy.

6. Finance Committee and House Committee:

There were 3 meetings of Finance Committee and 6 meetings of House Committee. TD of HKSA kept informed of progress on all bills on a weekly basis. I have already initiated a dialogue between the Financial Services Bureau and HKSA on a number of Bills in anticipation of possible problems.

III. Bill Committees Joined

1. Evidence (Amendment) Bill 1998:

There were 2 meetings on Evidence (Amendment) Bill 1998. This Bill seeks to implement the recommendations of the Law Reform Commission (LRC) published in its Report in July 1996 that the rule against hearsay evidence in civil proceedings be abolished and a simpler system for the admission of hearsay evidence in civil proceedings be introduced. Work is in progress.

IV. Motion Debate

Speeches on my Web Page and highlights will be published in my circulars to members.

V. Questions

I have asked 5 written questions.

VI. Meeting with the British Prime Minister

I met Mr. Tony Blair, British Prime Minister, for breakfast on 10 October 1998 together with six other legislators. In the meeting, I urged the Prime Minister to assist Hong Kong in obtaining visa free access for our SAR passport to member countries of the European Union; the recovery of the $1.1 billion debt from the UNHCR; entering into double tax treaty with Britain; securing more grants and scholarships for our students studying in the UK and in providing more funds for cultural exchange amongst our youth.

VII General Political Background

The C. E. will be placed under continuous political pressure by problems associated with rising unemployment and the sluggish state of our economy. Hopefully, things should begin to look a bit brighter towards the end of this year and he may try to win back a little public support which has already sagged to a dangerously low level.

Public opinion seems to support the C.E.'s recent move to reorganise his team of executives. He may try making bolder moves to hand-pick what will be his full dream team by the end of year. The diversion created will give him a second chance to make a fresh start in implementing his policies.