AS Chief Secretary, I believe that the Government has four areas of responsibility in which it ought to help to promote our economic success. Our first task is to ensure that Hong Kong continues to deliver a sound business environment. We know that during the transition to 1997, political change is inevitable. The Government can help the business community to meet this challenge through achieving the highest standards of policy and administration. We must manage government finances in a way that delivers high-quality public services without stifling enterprise. We must ensure that taxes remain simple and low and that government regulation is equitable and stable. We must avoid arbitrary administration which creates uncertainty for investors and encourages corruption. We must remain willing as a government to test official policies and proposals against ''competition'' from the Government's critics, just as business firms pit their products against their rivals. Our second responsibility is closely linked to the Government's partnership with business and the community at large. It seems to me vital for our future prosperity that business remains free to defend its own commercial interests. It is equally vital for our stability that the community continues to feel confident that its wider concerns are respected. For this reason, we must put in place arrangements for the 1994 and 1995 elections which will be fair and open and, at the same time, acceptable to the people of Hong Kong. If we were to abandon our efforts to achieve such arrangements, we would be retreating from honest administration and accountable government, and the costs would be considerable. The business community could no longer be certain of a level playing field in which political patronage played no part. The community would no longer be sure that its best interests were paramount. The legislature would no longer command the public support needed to challenge the mistakes and misdeeds of the administration. You might well ask: does all this really matter? Can we not stick to arrangements which served us adequately for so many decades in the past? The reality is that we have very little choice. For a start, the Joint Declaration and the Basic Law require us to make constitutional changes. The framers of those documents had the wisdom to see that our political institutions must develop to match the aspirations of a more sophisticated, more affluent and more educated community. They decreed that standing still was not an option. Hong Kong today is a sophisticated and prosperous society. We have a highly educated, much travelled and well-informed community that wants to have a say on the way in which it is governed. Hong Kong's business community now takes for granted a very high quality of public service, with particular stress on the Government's fair dealing and impartiality. These expectations can only be met convincingly when policy is debated in public by a credible and genuinely representative legislature, and government officials can be called to account for their conduct. The international business community regards legislation, regulation and taxation as part of the total competitive environment. Governments are expected to take decisions in these areas through processes which command respect for their integrity and accountability. The political arrangements of the past would have looked increasingly unsatisfactory by these criteria. I come now to our third responsibility. So far I have talked of partnership in broad terms. But I would like at this point to narrow my focus. After 31 years as a civil servant, I am fully convinced of the importance of preventing the public sector from crowding out private enterprise. I believe we have a duty to encourage as much commercial partnership between the Government and the private sector as possible. This principle is particularly important when it comes to creating the infrastructure which Hong Kong will need in the next century. It would be very easy, given Hong Kong's unbroken record of annual economic growth and regular budget surpluses, for the Government to throw money at our infrastructural problems. But we must resist any temptation to follow this route, even when politically it seems the attractive thing to do. Instead, we have to take forward our plans for the airport, for port development, for new road and rail transport facilities, in the most cost-effective way open to us. For those projects which generate their own revenues, the Government has to make a vigorous effort to find partners from the private sector to lighten the demands on the taxpayer by providing opportunities for the private investor. Only in this way will we ensure that projects are subject to the full discipline of market forces. Only in this way can we be sure that rates of return and quality of service are competitive by market standards. The massive scale of the infrastructural projects which we will undertake in the next few years makes it even more imperative to see that they offer the community the best value for money. Our fourth and our major responsibility is concerned with the most significant influence on our future: the resumption of Chinese sovereignty in 1997. I have taken up the post of Chief Secretary with no illusions about the complexity of the challenges which the transition to 1997 must bring. I am, personally, totally committed to a successful transition. Let me repeat my own conviction that the Joint Declaration's pledge of ''one country, two systems'' will create enormous new opportunities for Hong Kong, and for the business community in particular. But it is important that we work together to ensure that this concept can and will be implemented after 1997. As I have mentioned earlier, both the Joint Declaration and the Basic Law decree that the resumption of sovereignty will be accompanied by the development of our political institutions, providing for greater participation by Hong Kong people in managingtheir own affairs. Both documents also provide that our social and economic systems, and our life-style, will remain basically unchanged. Indeed, they give firm undertakings to maintain: The capitalist economic and trade systems previously practised in Hong Kong; The status of a free port and the continuation of a free trade policy, including the free movement of goods and capital; and The status of an international financial centre . . . and a freely convertible currency. These, and the other pledges set out in the Joint Declaration and the Basic Law, provide me with the necessary reassurance to recommend Hong Kong as Asia's premier business location, not just for the present but far into the future. I am determined during my term as Chief Secretary to make a positive contribution to a successful transition. No one needs to be reminded of the difficulties we have had during recent years. The transfer of sovereignty was always going to be a difficult enterprise, and one should not be surprised if there are some disagreements along the way. But if the present and the future sovereign powers disagree on some things, that is no reason to disagree on everything. Indeed, our record over the last two years has shown how much we and the Chinese Government can agree on, despite our difficulties. Let me sum up. Hong Kong businessmen have an outstanding track record when it comes to delivering business success. The Government is determined to maintain the conditions which make Hong Kong the ideal place in which to live, work and invest. But we cannot do so on our own. We need to foster a constructive partnership, both with business and with the wider community. We are already hard at work building the infrastructure which Hong Kong will need in the next century, particularly to maintain our ability both to assist and to profit from rapid economic growth throughout southern China and the coastal provinces. The Chinese Government has been very open about its own determination to preserve Hong Kong as a thriving centre for international business. With these factors in our favour, we can together face the future with considerable confidence.