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United States President Bill Clinton's landmark visit to China, and the Sino-US presidential summit, bring with it the prospects of a new era of stability, prosperity and peace in the Asia-Pacific Region, the Chief Executive, Mr Tung Chee Hwa said tonight(Thursday).

Speaking at a Government House dinner in honour of visiting President Clinton, Mr Tung said Hong Kong was immensely pleased to see a deepening of the Sino-US relationship.

"I am certain your visit (to China) heralds the beginning of a new chapter of co-operation between these two great countries," Mr Tung told President Clinton, Mrs Clinton and about 140 dinner guests.

"For obvious reasons, stable and cordial Sino-US relations are of enormous benefit and importance to us here in Hong Kong.

"At the same time, the excellent relations between Hong Kong and the US, I believe, can help to engender a deeper mutual understanding and respect between Chinese and American people.

"The fact is we are Chinese and have been brought up in Chinese tradition and values. We are proud of our heritage and our culture. But at the same time, many of us have received the benefit of education in the United States and we respect the long held beliefs and traditions of the American people," he added.

Mr Tung noted that on the world stage, despite mounting interest group pressures and the on-going differences between China and the US, President Clinton had courageously stepped forward to lay the foundation for a strategic partnership between the two countries.

"A long-term relationship between the US and China based on mutual trust, respect and benefit is undoubtedly in the interest of China, the US and indeed the world."

Mr Tung said that during his meeting with President Clinton at the White House 10 months ago he was deeply touched by the warm welcome he received and impressed by President Clinton's genuine interest in, and knowledge of, China and Hong Kong in particular.

"I assured you then, as I reassure you now - and as I hope you see for yourself on this visit - that the unique concept of 'One Country, Two Systems' is working, and working well," he said.

He told President Clinton and the dinner guests that the past year had been of tremendous and historical significance for Hong Kong and its 6.5 million residents, who only a day ago had celebrated the 1st Anniversary of the HKSAR.

But he said it was the regional financial turmoil - rather than any of the problems predicted by the skeptics - that had kept the eyes of the world transfixed on Hong Kong.

"Were we simply to contend ourselves with making a success of 'One Country, Two Systems' then I deeply believe we would have few, if any detractors," he said.

"This past year has brought to the region unprecedented financial turmoil, which is still sending waves of uncertainty across the world.

"What started as a regional crisis has taken on global significance which needs a global solution."

The Chief Executive said a stable Yen exchange rate and a healthy Japanese economy were essential not only for the financial stability of Asia but also the whole world.

"In these respects we are looking towards you for continued strong leadership," he said.

Mr Tung said the continued economic vitality of the US and a constructive relationship between China and the US were both matters of great importance to Hong Kong.

He said Americans had commercial, cultural and family ties in Hong Kong stretching back over a century and a half.

The American community in Hong Kong - the largest expatriate business group in Hong Kong - underlines the fact that Hong Kong is America's closest business partner in Asia, he said.

"I extend to you, and to all Americans, an open invitation to visit our home, to experience our hospitality and to join hands with us across the Pacific to forge an even greater friendship than that which we already know, and cherish," Mr Tung said.

Dinner guests were treated to a traditional Chinese meal which included: sauteed lobster balls with ginger and spring onion; sauteed scallops and asparagus with black bean sauce; stuffed crab meat in the shell; braised shark's fin soup with crab roe; fried rice 'Fujian' style; sweetened bean curd with ginger; and egg tart Portuguese style.

End/Thursday, July 2, 1998

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Photo Caption: Mr Tung Chee Hwa and President Clinton propose a toast to the guests in a dinner at the Government House.

Photo Caption: Mr Tung Chee Hwa and principal government officials chat with President Clinton in the Government House.