Speech by The Honorable Mrs. Anson Chan, GBM, JP, Chief Secretary for Administration, Hong Kong SAR Government.

Hong Kong
April 19, 2001

Luncheon Address to the Asia Society Hong Kong Center

Ronnie, distinguished guests, ladies and gentlemen,

First of all, Ronnie, thank you for very kind and warm welcome. All I can say is that it is wonderful to be part of Hong Kong's history and I hope that history will be kind to me. I would also like to thank all of you for being present here at today's luncheon. At the tail end of one's career, to be received in this manner and by such an illustrious gathering is an honour indeed. I thank you from the bottom of my heart. I would also like to thank you and the Asia Society for your unstinting support for Hong Kong. You and all those associated with Asia Society have been stalwart in your confidence in Hong Kong during the most difficult times, and the establishment of the Asia Society Hong Kong Centre in 1990 speaks eloquently to that.

And I want to thank you also for the invitation to address this large audience today, just 11 days before my retirement from my current post in the civil service of which I have had the privilege to be a member for 38 years, 7 months and two days. This is the last major speech I shall give in my official capacity - a valedictory, I suppose - but it will not, I daresay, be the last time I speak up for Hong Kong.

As I mulled over what I should say today, quite a few thoughts went through my mind. I looked back on some of the good days and bad, the great changes, the moments of high peaks and deep troughs. But I always came back to the sense of excitement and achievement associated with Hong Kong's great post-war success in which I have been fortunate enough to have played a small part.

But how to encompass all this in the short time we have after this splendid lunch? A speech packed with reminiscences? A shopping list packaging our progress over the last 40 years? A "kiss and tell" speech revealing some real or imagined secrets or scandals from the past? Sorry, that's not my style.

So, I have decided to do what I usually do, and that is to speak frankly on a number of issues about which I feel strongly. I feel strongly about them because they are important to the people of Hong Kong, the future success of the SAR and, by extension, to the contribution the SAR can make to our nation.

In short, I want to ask the people of Hong Kong what values they want to protect and preserve in the SAR. I want to ask them to think about those things that give us the edge over our competitors in the region, including cities in the Mainland like Shanghai. And I intend to answer my own questions by saying what I believe they should be. I don't think anyone in this great hall, or outside it for that matter, will be greatly surprised to hear what I believe those values to be. I have been espousing them in one form or another for most of my public life.

But before I do so, I want to indulge in just a little bit of nostalgia. After nearly four decades in the civil service, I think I've earned at least that much. I was looking at figures the other day which drew some comparisons of life in Hong Kong back in 1962, when I joined the civil service, with the situation as it is today.

For example, in 1962 great parts of the New Territories still moved to the rhythm of the seasons of planting and harvest. Buffalo could still be seen in the paddy fields. The population stood at 600,000. Today, there are 3.4 million people living in nine modern high rise new towns beyond the Lion Rock. The fulcrum of our urban metropolis has shifted dramatically in the space of a generation.

Life expectancy in 1962 was 68 for men and 75 for women. Today it is 77 and 82 respectively. Our GDP has increased 150 times over during that period, on average by 14% a year. GDP per capita has multiplied 70 times, from $2,619 in 1962 to $187,105 last year. That's an average annual growth rate of 12%. In 1962, a quarter of a million visitors came to Hong Kong. Last year the number reached a record 13.6 million.

And finally - just one more comparison that is close to my heart. When Katherine Fok and I joined the Administrative Service, as cadets in 1962, there was but one woman in the entire Administrative Service. Today there are 275, or over one in five of the directorate structure. Eight of our Principal Officials are women. Progress indeed.

I have presented this snapshot of how far we have come not to blow the trumpet for government - although I have never shied away from claiming credit for us when it has been due - but rather to make the straightforward point that for all of our faults, real or imagined, the government must have done something right somewhere along the way. I am the first to acknowledge that the creators of Hong Kong's success are its people. I lead the applause for their great qualities - decent, tolerant, hard working, entrepreneurial, fast on their feet, highly-motivated, innovative, outward looking, politically pragmatic, worldy-wise.

But I firmly believe that the Hong Kong administration has over the years provided the physical and legislative infrastructure and the commonsense consensus on social and political issues. We have governed with a light touch and have given our citizens the flexibility and freedom to pursue their dreams and realize their ambitions for themselves and their families.

In many ways, our people stand as a monument to the virtues of self-reliance. They have never been afraid to embrace change and turn it to their advantage. They have never been afraid to embrace risk, and challenge it.

They have been able to do this because history bequeathed to us the vital institutional organs of a free society: the rule of law, an independent judiciary and a clean and accountable administration run by men and women of good conscience. We have here in Hong Kong a civil service that is built on the twin pillars of meritocracy and political neutrality. In this age of globalisation, instant communication and overnight change, this might sound like a quaintly old-fashioned thing to say. But these institutions are so critical to our stability and prosperity that they must endure and survive every fad or fashion or paradigm shift that comes our way.

I can still clearly recall a conversation I had with a senior member of the administrative service not long after I had joined the government. I could not have been much more than 23 years old, but his words have stayed with me since. Anson, he said, you must always remember that you have joined a very special service which has an excellent reputation built up by the people who have gone before you. Your obligations as an administrative officer are simple. You must serve the people well and you must serve them with honour. Remember that duty and honour must always go together.

It's advice I give to young colleagues today.

This is not to suggest that civil servants are trapped in a time warp. The civil service is ever changing, and reforms over the decades - and indeed over the last three years - have seen major advances in efficiency, productivity, cultural attitudes, client- awareness, commitment to higher standards of service delivery, intolerance of corruption and incompetence and - most important of all - commitment to the values of openness, transparency and accountability. All of this has been built on the foundations of the meritocracy and political neutrality I have already described. These values are the one constant, the starting point for all else.

But is this enough to meet the demands of the new millennium? Should we be moving in different directions with changing times? What will provide the best value for the governing systems of the 21st century which genuinely seek to be world class?

This last question was eloquently answered by the distinguished British historian and political journalist, Professor Peter Hennessy, at a conference in Hong Kong entitled " A Civil Service for Asia's World City" in January last year. Professor Hennessy's answer was as follows:

- That in return for a degree of permanence, a largely career civil service recruited on ability alone will in all circumstances facilitate evidence-driven government by speaking truth unto power as its primary and overriding duty.

- And that allied to this is an ethic and a determination that public money will be raised in an equitable and transparent way and used in a corruption free fashion according to those purposes and only those purposes, approved by the legislative part of government.

I am sure you recognize this system so succinctly described. I know it well. It is the system that has been patiently and deliberately constructed over decades in the Hong Kong civil service. It is a system that has seen us through thick and thin. It is a role model I can readily sign up to.

And "speak truth unto power"? What does this mean? It means giving your best advice to superiors based on the best information available and objective analysis even when you know it may not be music to their ears. That is what I and my colleagues have been trained and encouraged to do from the first day of our service. This, in turn, builds trust between officials upwards, downwards and sideways.

This collegiate approach among officials whose relationship is built on trust rather than personal or political whim also provides the protection for individuals within the system. They know they can tender advice without fear or favour, safe in the knowledge that even the most unwelcome advice would not lead to blighted career prospects or unpleasant postings out of earshot of those who may not like what you have to say.

In such a system, currying favour, political correctness, second-guessing and shoe-shining will not get you very far. These are, however, the weaknesses inherent in a more politicized system which, in my view, tends to encourage lower productivity and less accountability but discourage "speaking truth unto power". In examining how best to enhance the accountability of principal officials, the Chief Executive has made it clear that "we will maintain the stability of the civil service structure, preserve the principles of permanence and neutrality of the civil service, and maintain a highly efficient, professional and clean government".

I place heavy emphasis on this matter because, like Professor Hennessy, I believe passionately in the notion of a politically-neutral civil service recruited on the basis of intellectual ability rather than political patronage. In other words, the idea of a lifetime career built around the profession of government. Of course the civil service can benefit by the infusion of outside talent. It has done so in the past and will no doubt do so in the future. But the system must be bigger than any individual, whether from within or without.

The values on which I place such store have been put to the test in recent years, both before and since the transition. I believe the civil service has been more than up to the test, and there are more tests to come. That is made certain by the Basic Law timetable for the development of the democratic process. Our community has big decisions to make in the next few years, in particular about the pace of reaching our ultimate constitutional goal of universal suffrage for the Legislative Council and the possible popular election of the Chief Executive.

I have made it plain in the past that I believe these issues raise such fundamental questions about governance in the SAR that public debate on them cannot be delayed for too much longer. I have not changed my mind about this. We must get the decision right in 2007 and we stand the best chance of doing so if we have a long, measured, structured and rational debate about where to go and how to get there.

In my view there is already too much artificial division in the community. Name-calling and suspicion based on outdated and emotive political labels are no substitute for reasoned discussion. Why do some people insist on using terms like pro-China or anti-China? Or even pro-British? Surely we are all pro-Hong Kong. And that means also that Hong Kong people are as much a part of the country as the other 1.3 billion Chinese on the Mainland, and proud of it.

The Administration is required by our constitution to be accountable to the Legislative Council. Constructive engagement between the Administration and all members of the legislature must be the right way forward. Despite our differences, together we have achieved a great deal in the past. The legislature can take the moral high ground by putting aside prejudices, point-scoring and partisan political ambitions and burying their differences in a way that takes into account the wider interests of the community as a whole. This is what the community expects of our legislators. I believe the Government will continue to play its part in facilitating reasoned discussions within the legislature by engaging its members in policy formulation at an early stage.

In my experience Hong Kong has moved forward on a belief in progress and fair-minded consensus building, where decisions are arrived at by reason and compromise. I believe that's what people still want. It is not surprising to me that they ask whether the current constitutional arrangements are capable of delivering the political goods.
All the more reason for the community to come together in a pragmatic way to decide, in the spirit of give and take, on the constitutional arrangements that best suit our unique circumstances. And those unique circumstances do, of course, include the interest Beijing will naturally take in this matter. While any debate cannot ignore this fact of life, it does not necessarily have to subdue or distort it.

I say this with some conviction because my own experience as Chief Secretary for Administration since 1 July 1997 has assured me that on the whole, the Beijing leadership is happy to let the SAR make its own way within our high degree of autonomy. Even during the controversial CFA referral, Beijing's much preferred option was for Hong Kong to settle the matter within the SAR. It's a pity that this was not constitutionally possible.

And as President Jiang made clear to our Chief Executive recently in Beijing, the leadership is content to leave it to the SAR to deal with the Falun Gong issue within the autonomy we enjoy under One Country Two Systems. Given the sensitive nature of this issue to Beijing, can we ask for more?

We must build upon the autonomy we have been granted under the Basic Law and which we have so far exercised so freely and flexibly. I do not suggest that we in any way ignore or stand out against the national interest. But the greatest national interest at stake in Hong Kong is in the success we achieve in demonstrating to the world in general - and our compatriots in Taiwan in particular - that One Country Two Systems is not just a political slogan, but a real and living dynamic that works in practice.

Central to that is for Beijing and the SARG to show that a high degree of autonomy means what it says, even occasionally at the expense of the SAR handling issues in a way that is distinctly different from the approach in the Mainland. Frankly, when this happens, it can only be to the credit of Beijing. In this regard, it seems to me that doubts held before the transition have lingered too long among some observers both locally and overseas who have not given the Chinese leadership sufficient credit for the light touch they have shown in handling Hong Kong since the Handover.

We will certainly need all the room to manoeuvre we can muster to face the challenges of the next few years. The fallout from the Asian financial crisis should have shattered any complacency we may have had that the world owes us a living. On the contrary, it demonstrated in stark terms that we need to reinforce the institutions of freedom and the open market policies which have underpinned our past success.

We must not give rise to any real fear that the rule of law is under threat; we cannot lower our guard against corruption - clean and accountable government means more to us than ever; we cannot afford to tilt the level playing field for business; we must do more to strengthen corporate governance; we must cut costs to improve our competitiveness; deepen reforms in the economy; stay ahead of the wave of change in technology; dramatically improve our quality of life; and do more to provide the cultural infrastructure and community mindset that Hong Kong is, at the end of the day, a great international city, and not just another city in China. Are these not the ingredients that give us the edge over our rivals in the region?

None of us should wear rose coloured glasses. We don't need economists' forecasts to tell us that we face stiff competition from Shanghai and other cities in the region over the next few decades. I have already set out a few moments ago some of the things we need to do, or continue to strengthen, if we are to meet those challenges. Hong Kong has not baulked at challenges in the past and we must have the self-confidence to meet them in the future.

That's what I meant when I spoke of mindset. I have become increasingly concerned since the Handover that too many Hong Kong people have become more inward looking. Understandably perhaps, they have looked towards the Mainland at the expense of our traditional links with the rest of the world. Some are so concerned about integration that they seem to forget that our strength lies in the separation which is fundamental to the success of One Country Two Systems - not just for Hong Kong, but for China as well. By contrast, I have watched with admiration as the Mainland has increased its outreach to the international community.

Take use and standard of English as one small but important example. I have lost count of the number of times I have been told by foreign businessmen and visitors how much better they speak English in Shanghai or Beijing. How ironic it would be if the reunification of Hong Kong with China marked the point in history where the peoples of Hong Kong and the Mainland passed each other going in opposite directions. Our ability to communicate in the international language of business was one of the factors which always gave us an edge over our rivals. We blunt that edge at our peril.

In my own lifetime I have seen Hong Kong absorb hundreds of thousands of refugees and immigrants fleeing the upheavals of civil war in China, my own family among them. I witnessed the bank run in 1965; the riots on our streets at the time of the Cultural Revolution; the 1970s recession caused by the oil crisis; the run on the HK dollar in 1983 which led to the link with the US dollar; the closure of the stock exchange during the crash of 1987; Tiananmen; the Vietnamese Boat People crisis; the various dramas of the 13-year transition; and the financial crisis which struck in 1997.

We have survived it all, and much more. And grown stronger and more politically mature as a community in the process. Of course we face new challenges. We always will. I have spent nearly 40 years in public life watching Hong Kong beating the odds. Writing off Hong Kong is like waving the proverbial red rag to the bull. I have no doubt that Hong Kong's indomitable spirit and optimism - supported and nurtured by sensitive and sensible government - will write yet another great chapter in our success story.

For myself, it is time to move on. I have had the good fortune to serve in a first class civil service for nearly 39 years. The Service has given me much more in terms of personal growth and fulfillment than I can ever hope to repay. My experiences and encounters have helped shape my character and life in ways I could not have imagined when I first joined the Service in 1962. In the words of Alfred Lord Tennyson in his poem "Ulysses" -

"I am a part of all that I have met
Tho' much is taken, much abides
That which we are, we are
One equal temper of heroic hearts
Strong in will
To strive, to seek, to find and not to yield."

I consider it a singular honour to have been involved in the historical watershed of 1997 and to have led the Civil Service for almost equal periods before and after the handover as the Chief Secretary - enough memories to last me a life-time. But my fondest memory will always be of my colleagues in the service - their support, friendship and team spirit. I leave them in Donald's very capable hands.

I have enjoyed almost every moment of my career. More importantly, I have at the same time enjoyed every moment of my life outside of work - my real life, if you like. Looking back over these past four decades, the two best decisions I ever made were joining the civil service and marrying Archie. Archie has been a loving and supportive husband and has so often provided the sanity and balance that I needed. We now have the pleasure of seeing our children and their spouses raise their own children - that is the circle of life.

To the people of Hong Kong, I would like to say a heartfelt thank you. Thank you for your forbearance, support and affection and for the wonderful memories you've given me. No public official could ask for more. I leave the Civil Service at peace with myself and with the world. I look forward to the next quieter phase of my life wherever it might lead me.

May God bless and keep Hong Kong and its Civil Service always.

Question and Answer Session

RONNIE CHAN: Anson, we're delighted that you can be with us and I want to acknowledge in particular that we're delighted to have Archie here. But also with us here is a table of Anson's families and friends, right here in the front. We're delighted that you can be with us on this very auspicious occasion.

Anson has very kindly agreed to answer some questions and I wonder, Anson, if you would be agreeable if we should ask the students who are sitting on the two sides to be the first, then we will open it to the floor.

QUESTION: Thank you. I am Kitty Poon from the Chinese University. My question is, there are some discussions on the possibility of installing a ministerial system in Hong Kong, and I wonder what is your view on that; and what do you think would be the impact on the Civil Service in terms of its morale and its stability? Thank you.

ANSON CHAN: The Civil Service clearly has to move with the time. The Chief Executive has made clear in his last policy address that in response to the wishes of the community, he is examining the scope for enhancing the accountability of principal officials. In this context there is much debate about what the system should be, and about the ministerial system as you referred just now.

I think first of all, you need to define what you mean by a ministerial system and I dare say most people's definitions are somewhat different. In principle, I think there is no reason, if it is considered desirable and is in the interest of the community, why you cannot have a layer of political appointees over and above the Civil Service. But as I have pointed out in my speech, and as the Chief Executive himself has confirmed, for the Civil Service to be in its entirety, it is important that it be preserved as a meritocratic and politically neutral system. But I emphasize again, you will have to determine what the pros and cons of it are.

You can certainly add another layer of political appointees who would then, as in other democratic models, be responsible for making decisions and, if they are found wanting, they would step down from their posts. But I hope very much that the Civil Service as a whole will be maintaining its political neutrality, which I believe to be very, very important, and which I also believe is what the community wants.

QUESTION: I am Ken Ng from the University of Hong Kong. Mrs. Chan, I would like to ask what would you say to a person of my age who has an enthusiastic mind in joining and working as an official in the Government? The second question is, some of my classmates would like to know what's your plan after your retirement and would you consider to be our next Vice Chancellor?

ANSON CHAN: Well, if you decide to join the Hong Kong Civil Service I would say 'hurray' because, as I pointed out in my own speech, one of the two best decisions I ever made in my entire 61 years was to join the Hong Kong Civil Service. Nothing that has happened in the past 39 years has caused me to change my mind. There is a great satisfaction and reward to be derived from serving the community, and the Civil Service is clearly the best way of doing it.

I have no specific plans for what I will do after I step down from the Chief Secretary's post. But I have to say that I do not have any intention of becoming the next Vice Chancellor of the Hong Kong University, but thank you for the compliment you pay me.

RONNIE CHAN: Maybe that young student will one day stand here as the Secretary for the Administration or the Vice Chancellor of Hong Kong U!

ANSON CHAN: The sky's the limit.

RONNIE CHAN: How about one more (question) from the students and then we'll move on to the general public.

QUESTION: Both the past and the present Government say they encourage life-long learning, so if this is the case we believe that the Open University is acting a role in this aspect. So may we know if Mrs. Chan will continue your life-long learning, your life-long study, and what kind of courses you would like to take at the Open University. Thank you.

ANSON CHAN: I'm a great believer in life-long learning. A couple of weeks ago I opened a seminar about Civil Servants participating in training courses and one of the points I made to my colleagues is that even at my age, at the tail end of my career, I still take tutorials in improving my Putonghua at least once a week. So that's an example of life-long learning for you.

I do intend to take a few courses but I haven't yet made my choice. I'd like to perhaps take a few courses, particularly at the Open University, in those areas where I've never found time for, but quite what these are I have to tell you later.

RONNIE CHAN: Well, Mrs Anson Chan has just been elevated from Vice Chancellor candidate to student candidate. Let's open to the floor. Please identify yourself.

QUESTION: My name is Joseph Ferrigno and I'm an American citizen. I've been involved with Hong Kong since 1984 and a resident since 1990 and I think I can speak on behalf of a lot of expatriates here that a big part of our heart is in Hong Kong. I can further presume, I hope without offending anyone, on behalf of all expatriates, to express our deep appreciation to you, Mrs Chan, for your service to Hong Kong over so many years. You have done so with extraordinary intellect and intelligence, devotion and loyalty, enthusiasm and grace and we hope - I think, all of us expatriates and local people here - we hope that you will continue to serve Hong Kong, China in the years to come. Thank you very much.

ANSON CHAN: Thank you very much, Joseph, thank you. In response to your very complimentary remarks, Joseph, I can assure you that I would remain an interested and engaged citizen of both Hong Kong and China. And if there is any way in which I can continue to be an advocate for Hong Kong and improve understanding between my country and other countries, I shall certainly be very, very happy to do so. But thank you, Joseph.

QUESTION: My name is Peter Wong. I cannot be as eloquent as the previous speaker who is an expatriate and whose mother tongue is English, but as a citizen of Hong Kong, Anson, I thank you very much for what you have done for us all.

Anson, I have a question for you. How do you see the social path of Hong Kong developing in the coming years? And I refer specifically to one of the problems, which is that we have an underclass of people in Hong Kong who don't seem to be getting in on the extra wealth that we are making. So do you think that this will improve or do you think it will worsen in the years to come?

ANSON CHAN: Thank you, Peter. I think clearly all of us must be concerned that although we are seeing a steady improvement in our economy, not all members of the community have benefited from this and we do know that there are certain sectors that are still lagging behind.

I think clearly the Government must continue to do more of what it's been doing in the past: on the one hand, to govern with a light touch, to remain faithful to market-driven policies; but also to do what we can to improve both the physical and the social infrastructure, as well as the business environment so that the Government is in a position to generate the wealth and to provide the economic wherewithal that would enable the Government to improve the lot, particularly for the less privileged and disadvantaged members of the community. We are doing a great deal. We're doing a great deal on the health front, clearly on the educational front, and on the social welfare side.

The government sees its responsibility lies in providing help for those who are not able to help themselves; but for those who are able bodies, those who can help themselves, we must generate the employment prospects and the environment that will enable them to steadily improve their lot for themselves and for future generations as they have been able to do so in the past.

QUESTION: Tom Crampton from International Herald Tribune newspaper. Mrs Chan, you spoke about the need for a ministerial system, public debate, universal suffrage, many of which imply some sort of constitutional change. How long is the current constitutional situation tenable?

ANSON CHAN: As you are aware, we do have a timetable laid down in the Basic Law on the development of the democratic process. In the year 2004, as you know, we will have half the members of our legislature directly elected. The Basic Law makes it quite clear that beyond the year 2007 the people of Hong Kong can decide for themselves how quickly to move towards the ultimate goal of universal suffrage.

I think we all, particularly within the administration, feel that the current system, and particularly the relationship between the administration and the legislature, is under some stress. Nevertheless, it is our sincere wish to continue to improve our relationship with the legislature, but it also takes willingness on the part of the members of the legislature to work together with the Government in a constructive manner, and I've just indicated in my speech how this can be achieved.

But in the longer run, certainly beyond the year 2007, as I have also made clear in my speech, I do think that we need to think about, to discuss in a rational manner, and to generate a consensus on how fast we should move towards universal suffrage.

QUESTION: In your opinion is Hong Kong moving quickly enough?

ANSON CHAN: I think that very soon we will begin discussion on the very complex issues involved in this whole question of constitutional development.

QUESTION: Tom Masterson, Resources Connection. Mrs Chan, over the last 10 years that I've been here we've seen a lot of progress in sustainable development and the environment and awareness thereof. With population pressures and growing economic concerns and social splits, this still is an issue that I feel very strongly about here in Hong Kong because we have to have quality of life to be able to make this an international seed and grow.

You have been involved in cross boundary commissions regarding this and I wondered if you have any thoughts about how we can move forward in the years ahead in bringing better sustainable environment for the Pearl River Delta and for Hong Kong?

ANSON CHAN: The first point I would make is that I am setting up a unit on sustainable development in my own office very, very soon. This underlines our commitment to pursuing the whole question of sustainable development and making sure that the factors involved in sustainable development are taken on board and be given full consideration at a very early stage of whatever policies we decide to formulate.

You're quite right that, cooperation with the Mainland, particularly with the Guangdong and Shenzhen authorities, is crucially important to the environment. We have set up a forum in which we can exchange views and discuss issues with our counterparts across the border. We're making good progress there. We're also taking a look particularly at how to improve air quality. There is a consultancy going on at the present moment and this consultancy should be finished very, very shortly. In the light of that consultancy, hopefully we will be able to make decisions jointly with our counterparts across the border as to how we can control air quality.

Within Hong Kong itself we have in the past expended substantial sums of money to improve the environment because I do agree with you, the quality of life, the quality of our environment is very important not only for the community as a whole but also in terms of attracting investors to come and live and work in Hong Kong. I hope that you're aware of the various measures that are in the pipeline, particularly about improving air quality.

We're making extremely good progress on that front. We're phasing out very, very quickly and steadily the entire fleet of diesel driven taxis. We're using ultra-low sulfur diesel and we will be tackling buses and encouraging them to use cleaner fuels. So I think we're moving in the right direction and with the setting up of the sustainable development unit in my office, hopefully we will make even better progress. Thank you.

QUESTION: Adi Ignatius from Time Magazine. You've been famously described as "Hong Kong's conscience" and as the "canary in the coal mine for Hong Kong's political development". I think in some ways you've encouraged or certainly not discouraged the press from looking at you as an indicator of the progress or lack thereof in Hong Kong's political development. I wanted to ask you to speak even more frankly than you have. You're leaving now and maybe you could talk politically. What does this indicate in terms of your feelings of frustration perhaps about Hong Kong's political development, or your feelings that you'd reached limitations in terms of what you could do?

ANSON CHAN: I have every confidence in the administration under the leadership of C.H. Tung and under the leadership of Donald Tsang as head of the Civil Service. I think we can take great pride in the fact that the Hong Kong Civil Services continues to be run by men and women of good conscience who are committed to the community here. They are committed to certain core values which I have referred to and which I underline again as being crucially important in ensuring that the Civil Service can continue to meet the community's expectations.

I am not leaving because I believe that things will go wrong. I'm leaving because I happen to feel that after 39 years, with a clear successor waiting in the wings, it's time that I move on and make way for new blood. I'm a firm believer in the fact that nobody is indispensable and Donald will be a most capable leader. The only thing that he lacks probably is my big smile, but then he has his debonair bow tie.

QUESTION: My name is Gordon Wu. I'm a third-generation Hong Kong fellow here so all my life is committed to Hong Kong. First of all, I want to thank you for your long and good service to Hong Kong.

The gist of my question is very simple. In Hong Kong we are successful because only about 25 per cent of the people pay taxes. It's a wonderful system in which we give the other 75 per cent an equal opportunity, so please don't change that.

But on the other hand, when you have universal suffrage, how do you protect the interests of this 25 per cent that have to pay tax and probably have no say in the legislature? And I said it with conviction because I went to study in America and there they say 1776 taxation without representation is not right therefore United States of America was born. In 2007, if it's universal election immediately, how do you protect this 25 per cent of people who pay taxes? Shall we start a revolution?

ANSON CHAN: Several points I would make, Gordon, in response to your observations. First of all, the timetable - I am not saying and I daresay nobody in this room could predict whether in the year 2007 there will be direct one man-one vote. That remains to be seen and whether there is a consensus within the community as to how fast we should move towards universal suffrage.

Secondly, I do know, Gordon, you have strong views about who should have the vote. I think your view is that those who do not pay tax should not have the vote. I would like to agree with you, Gordon, but I have to say I disagree. And why do you think those who are paying tax need any protection at all? I don't think they do.

QUESTION: I think in the British judicial system a fellow who is accused always has a chance to defend himself.

I have never said that the people who don't pay taxes don't have any right to vote. But it's a very dangerous system if people who don't have to pay make all the decisions and before you know it, it would be just like the masses in front of Tiananmen Square before Chairman Mao and it would become like the French communes.

What we wanted to do is to preserve the good of that few million people in Hong Kong, and yet we have achieved economic miracle. Therefore, shouldn't we have some kind of balance so that the people can vote, and also some safeguard for the people who pick up the tab? That's all I am I asking. I never said that we should not let the non-payers vote.

Now, I'll let you in also on a little history of why I'm a convicted fellow on democracy. I named my son Thomas and his middle name is Jefferson.

ANSON CHAN: Well, Gordon, I always like to have the last word and I hope you'll give me the last word on this. I do agree with you that those who make decisions about spending should also have some responsibilities of raising the money. But that doesn't necessarily mean that everybody has to pay tax.

I think what we want to see at the end of the day, in the context of the evolutionary development of a representative government in Hong Kong is that those who make decisions, particularly on funding proposals and spending proposals in our legislature, should not only have the power to do so but should share the responsibility.

I think our system at the moment is lopsided and that is why I say it is untenable in the sense that our legislature, quite naturally, wants more power. But unfortunately most of the responsibility - indeed, I would say all of the responsibility - still rests with the Chief Executive and principal officials like myself. And I do not think that in the long run that system is tenable. Thank you.

RONNIE CHAN: On behalf of the Asia Society, Anson, we want to thank you for choosing the Asia Society for your very last major speech. And on behalf of the Society I want to present you with a small memento and bid you much happiness in your retirement, thank you.

ANSON CHAN: Thank you, Ronnie, and thank you all.