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The following is the transcript of the remarks by the Chief Executive, Mr Tung Chee Hwa, at the Press Conference held this (Wednesday) afternoon after the inaugural meeting of his Council of International Advisers:

Ladies and gentlemen,

We just had a long discussion with the international advisers. It was a very successful, very stimulating meeting. It went on for six and a half hours and we also had lunch together - a very brief lunch together.

I am personally most grateful that all these very successful international business leaders can take time out of their very busy schedules to be here in Hong Kong to give advice to us on the future development of Hong Kong.

They gave a very detailed analysis of the economy in North America, in Europe and in Japan. As you know, these economies have a major impact to our economic activities, so we were very pleased to hear their analysis. The prospects of these economies, from their point of view, they were very cautious that it is going to be a year where we need all to be very cautious.

We also discussed about the causes and the consequences of the Asian financial turmoil and we all agree that a new international financial architecture is urgently needed and that Hong Kong, because of our experience, can play an active role in the design of this architecture.

We also discussed about the short-term difficulties here in Hong Kong and concluded that there are no short-term fixes for economic difficulties we face today. We need to watch carefully how interest rate may further come down, how the external environment might develop in the months ahead. We need to continue to adjust our cost structure so we become more competitive. And above all, most importantly, we need to retain the confidence that at the end of this difficult road we will come out better and stronger.

We had the opportunity to explain to our friends from overseas about our vision for the future and that we are determined to become the premier international city for Asia, as well as one of the premier cities in China. And in that process we discussed as to how we can go about achieving it, and I think the Council Members endorse greatly the road map we have chosen to go forward.

Obviously, we need to invest a whole lot more in education, upgrading our English language. And we are going to spend $253 billion over the next five years over education, highlights the importance, demonstrates the importance we attach to education; the importance to improve the quality of life here, particularly in areas of environmental protection; and the continued need to adjust the cost structure so that we can remain competitive in a very open world economy.

All in all we had some very useful discussion, very productive discussion. I myself, Anson Chan, Donald Tsang, we all benefited; all my other colleagues benefited greatly from this long meeting. Thank you very much.

END/Wednesday, January 20, 1999

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