Hong Kong chief upbeat after China talks

“It’s 10 months later and you know what the turmoil has done to Hong Kong, but challenge brings the best out of people and I think Hong Kong people will successfully live up to the challenge,” he added.

Beijing handpicked Tung, a shipping tycoon, to run the former British colony when it returned to Chinese rule in July last year. Since then, Jiang and Premier Zhu Rongji have given staunch support to Tung’s administration as it battles to maintain the Hong Kong dollar peg to the US dollar and fend off the worsening Asian Financial crisis.

Tung said he wasparticularly encouraged by the strength of mainland China’s own economy and Beijing’s resolve to push ahead by financial reforms, as demonstrated in its decision to allow the collapse of the Guangdong International Trust and Investment Corp (GITIC).

“We talked at length about the international Financial turmoil, how has it affected Hong Kong and what we have done over the last so many months in the face of this external economic turmoil,” he said.

“I also had a chance to understand that (mainland) China’s economy is still going strong despite the turmoil and the floods and this is very important because China’s continued economic growth will help Hong Kong and our own economy,” he added. While GITIC’s collapse Left a reported debt of 11 billion Hong Kong dollars (1.42 billion US) to more than 80 local and foreign banks in Hong Kong, Tung said the move was nevertheless positive.

“The cleansing of GITIC or the reorganisation or the collapse of GITIC is fundamentally a good thing because it shows thedetermination of the central government to ensure reform in the areas of finance and economy,” he said.“I think it is a very good thing for China as a whole and obviously for Hong Kong,” he added.

Since the handover, Hong Kong has sunk into recession because of the Asian financial crisis.

In Saturday’s meeting Jiang praised Tung for his excellent work in Hong Kong and predicted that life in the territory would improve as the economy recovered.

Zhu relayed the same message in his Friday meeting with the Hong Kong leader, saying Beijing was fully satisfied with Tung’s performance over the last 15 months despite criticism at home.

“The central government has been very supportive to the Hong Kong special administrative region and given me a lot of encouragement,” Tung said.

“There was some criticism, but that criticism was that I did not rest enough and I should take more time off,” he added.

The Hong Kong leader is due to take his first post-handover holiday in mainland China before returningto Hong Kong.