Introduction
Having once been a student of St. Paul's, I am particularly
honoured and happy to be back here to address a Speech Day
gathering.
When preparing for this speech I did wonder what I should
appropriately talk about today. In my official capacity I am
constantly in touch with bankers and businessmen. Chances are that
what we talk about would centre around business and profits. The
atmosphere in where I work is in great contrast to the austere and
academic environment of our school. Yet it seems inappropriate for
me, as Chief Executive of the Hong Kong Monetary Authority
responsible for monetary affairs in Hong Kong, not to talk about
money even on an occasion as this one. So I decided that I should
tell you a story about money.
This story concerns the new coins that we have issued recently.
There is in fact quite a lot of interesting information about our
new coins. I would like to share with you some of this information,
together with some of my own reflections and experience on the
exercise of issuing the new coins. I hope students would find them
useful as they progress through their careers after school.
We started issuing new coins from the beginning of 1993. The $5
and $2 coins were the first ones introduced. The other
denominations followed, ending this November with the issue of the
new $10 coin. There are seven new coins in total. Let me start the
story from the time when we designed the new coins.
Design
As you know, the coins that we have been using before the new
coins were introduced all have the head of the Queen on one side.
This is because Hong Kong has been a British Colony and coins are
often taken as a symbol of sovereignty. These coins will obviously
create a problem in 1997 when sovereignty is to be reverted to
China. In accordance with the provisions in Sino-British Joint
Declaration, "Hong Kong currency bearing references inappropriate
to the status of Hong Kong as a Special Administrative Region of
the People's Republic of China shall be progressively replaced and
withdrawn from circulation". In other words, coins with the head of
the Queen cannot ride on the "through train". There is likely to be
disruption to members of the public if there is no smooth
transition for our coins. And this is clearly undesirable.
We have therefore a few years ago explored how this problem
could be resolved. The objective must of course be to try and
replace the coins with the head of the Queen on them, quickly and
smoothly, by coins which can survive 1997. This would involve
depoliticizing the coins by replacing references which are colonial
in nature by a design acceptable to Britain before 1997 and to the
China after 1997. The bauhinia, which is the Hong Kong flower, came
to mind.
Reaching agreement on this was not easy at all. On the one hand,
we were trying to get Britain to agree on the removal of a
reference to British sovereignty before 1997. On the other hand, we
were trying to convince the Chinese to accept a depoliticized
design for our coins, to be circulated through and beyond 1997.
Furthermore, we also need agreement on allowing coins with the head
of the Queen not yet withdrawn from circulation to continue to
circulate for a time after 1997 in order not to cause disruption to
members of the public.
But we managed. And the reason why we managed is that we had a
sense of purpose in what we were trying to do. The objective was
clear, there was cooperation, there was give and take, while
important principles were maintained. There was sincerity to try
and understand each other and to build up trust. Achieving is not
about winning an argument but about getting things done.
I do hope that when in future you encounter difficulties in your
work you would sit back and ask yourselves what is the objective of
what you set out to do; what are the principles which you must not
concede; whether you are approaching the problem with sincerity;
whether you are playing too much politics; whether you are building
up conspiracy rather than trust. If you can do so, then I can
guarantee you a higher success rate.
Turning back to the story of our coins, we had to resolve
another problem when designing the coins. Discussions involving the
references to sovereignty had to be carried out discreetly, whether
you like it or not. Leaks could be counter-productive. We therefore
could not involve professional artists in the design of the coins.
In the end we had to copy a photograph of a bauhinia for the
design. And for the Chinese characters on the denomination of the
coins, I had to copy those myself by hand from calligraphic
publications. I very much blamed myself for not paying more
attention in art classes when I was in school. Otherwise the design
of the coins could have been more artistic.
This is of course just one example of how we inadvertently miss
valuable chances when we were young. We thought that many of the
things around us were superfluous and therefore of no concern to
us. As a result, later in our lives we regret our inadequacy in
many things.
Minting
The second act of our story concerns the actual minting of the
coins. We needed to resolve one problem way at the beginning. This
is to ensure that we can distinguish between the new coins and the
old coins by machine, rather than by hand, in order to facilitate
the withdrawal of the old ones.
One proposal was to use difference sizes or shapes. But with six
different sizes for the old coins and seven additional different
ones for the new coins, there will altogether be 13 coins of
different sizes or shapes. This would cause a lot of confusion and
inconvenience to members of the public, in particular those who
cannot see. Further, there were serious doubts as to whether the
slot machines could handle so many different coins.
An alternative was to use different alloys for the new coins but
retaining the same size and shape for each denomination. Different
alloys have different conductivity. This would enable the old coins
to be sorted out for withdrawal. So we decided to use this
approach, in view of the fact that this would involve the minimum
of disruption to users.
But this caused another problem with the slot machines. Some of
them could not accept coins of different alloys even though the
size and weight were the same, unless the machines were modified.
And as always, it takes time to have them modified. So, to the
extent that we could, we gave people time and of course adequate
samples to set the machines. Even then, there were still problems
with some of the slot machines, and members of the public were
getting somewhat annoyed.
When this happened, no one showed any understanding about the
complexity of the issue. As far as members of the public were
concerned, the coins were issued by the Hong Kong Monetary
Authority, and we must therefore take the blame for any problems.
This is understandable. But for us, we were not interested in
putting the blame on anyone. We wanted to resolve the residual
problems as soon as possible so as to minimize inconvenience to
members of the public. After consulting experts, we quickly decided
to change the metal composition of the new one dollar coin which
was the most troublesome one. This did the trick, but it does mean
that some unissued coins had to be destroyed. A small number of the
troublesome ones had in fact been issued and are now circulating.
If you can locate them, my advice to you is to keep them as a
collectors item.
Thus we need to face problems head on. We need to pay attention
to resolving them rather than spending time and energy to apportion
blame. Demonstrating that the problem was not your making does not
help resolving it. But quickly resolving the problem, in good
faith, involving all those concerned and working as a team, will
obviate the need to blame and to defend against blame.
Issue
Anyway, all the seven new coins have now been issued, the latest
being the bi-metal ten dollar coin issued last month. In fact, at
the beginning of this year, we issued a commemorative $10 coin made
of gold. As this was a limited issue, demand was expected to be
great. I was approached by quite a number of friends and relatives
with the request that I reserved one for each of them as they might
not be successful in the ballot. What a request! I hope you believe
me if I tell you that I had to take part in the ballot myself. I
was lucky enough to get two out of a token of four applications
submitted by myself, my wife and my two understanding parents; and
I certainly paid for them, just like everybody else.
If you don't believe me, then I would ask you the following
questions. If the head of the Hong Kong Monetary Authority do not
stick by the rules, how could there be credibility in what he does?
How could he gain the confidence of the people of Hong Kong, and
how could his organization attain the recognition of the
international financial community necessary for Hong Kong's
development as an international financial centre? How could the
organization obtain the trust from the community in managing Hong
Kong's reserves of over $300 billion? Integrity is of utmost
importance in any job.
Criticism
The public's response to the issue of the new coins was overall
not bad. But there was no lack of adverse comments. For example,
after the issue of the new ten dollar coin, we heard people say
that it was ugly, it would cause inflation and it was too
heavy.
The fact that some have found the coin ugly could, as I said
earlier, be attributed to my lack of an artistic sense and I gladly
accept the criticism. The comment about the coin being inflationary
was a little unfair. It is up to the consumer to decide whether and
how much to spend. The ten dollar coin is not capable of thinking
itself. It cannot urge the consumer to spend more money and cause
higher inflation. But we nevertheless had to explain patiently and
objectively why the coin was not inflationary.
As to whether or not the coin is too heavy, I would like to tell
you that the life of a ten dollar bank note is only less than two
years. It would be cost effective to have it replaced by a coin
which lasts much longer. If we do not do so, we would be wasting
tax payers' money. Some however still did not accept that this is
good enough reason for having a coin instead of a banknote. In the
end, I had to resort to a little sense of humour and say that when
compared with two $5 coins instead of the $10 bank note, the ten
dollar coin is a lot lighter.
In life, one must be prepared to accept criticisms, whether they
are right or wrong. And one should always respond, if this is
called for, with objective analysis. This is particularly so when
one is holding public office. You are actually not entitled to any
temper at all. You cannot afford to say that people are foolish
even if they are. You will sometimes just have to swallow it with a
sense of humour. And life will go on.
I hope you have found this story of coins interesting. It is
true in all respects and this is the first occasion I talk about it
in public. I hope my reflections and experience in it will be
useful to you in your new encounters with society after your
graduation from school.
Thank you for listening to me.
