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The Chief Executive, Mr Tung Chee Hwa, met with the Hon Peter Beattie, Premier of Queensland, Australia, today (Tuesday) to exchange views on the latest economic development in the region and in Hong Kong.

The Chief Executive briefed Mr Beattie on the latest measures taken by the Government in the stock and futures markets to counter speculative activities which were distorting the markets.

Mr Tung emphasised that the Government would only contemplate such measures when there was ample evidence for an abundantly clear linkage between speculative activities in the Hong Kong dollar market and those in the stock and futures markets.

"We have decided to take these measures after very careful consideration," Mr Tung said. "We have taken into account possible criticisms from the market."

"We have no intention to support the stock market at a certain level," he said. " We must allow the market to find its own level."

"We consider there is a need to correct market abnormalities only when the evidence of currency play and stock market play is clear," he added.

The Chief Executive told Mr Beattie that Hong Kong was undergoing a painful but necessary economic adjustment, which would help enhance our competitiveness.

"We hope that the measures we have taken will help provide a healthy environment for our economy to go through an effective adjustment," he said.

"This is not to say that we are not prepared to take the pain of economic adjustment," he added. "Quite the contrary, we fully recognise the need to bear the pain, in order to ensure that the adjustment will be completed successfully."

The Chief Executive was delighted to hear from Mr Beattie that he was impressed with the new international airport, which was his first stop during his first Asian trip as the Queensland Premier.

Mr Tung remarked that we had learned from our experience with the new airport that it was important to plan well ahead in managing changes and managing people's expectations.

The Premier also congratulated the Chief Executive on a smooth transition in the first year of the HKSAR. The Chief Executive briefed him on the challenges that we were facing on both the political and economic fronts.

Mr Tung said that the Premier's Asian trip was important in promoting mutual understanding between Australians and Asians. He said that Australia was an important partner of Asia and it would be beneficial for the future of both to promote such a partnership relationship.

End/Tuesday, August 18, 1998

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