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Following is a speech by the Chief Executive, Mr Tung Chee Hwa, at a dinner hosted for the President of the French Republic, Mr Jacques Chirac, at Government House this (October 12) evening:

Mr President, Madam Chirac, ladies and gentlemen,

It is a great honour for me to welcome you on the first official visit to Hong Kong by a French President.

I would like first to congratulate you, Mr President, on your successful landmark state visit to the Mainland, where you were able to see first-hand the remarkable progress that our nation is making in the social, political and economic arenas. This progress is something of which all Chinese are extremely proud of.

The Sino-French relationship is immensely important, not only to France and China but to the world, to the whole world indeed. So, Mr President, we very much appreciate your personal efforts to engender deeper mutual understanding and respect between the Chinese and French people. We applaud your visit to our country to launch the "Year of France in China" after the successful conclusion of the "Year of China in France". And on a personal note, I want to thank you again for your hospitality at the presidential palace last November. Now I am pleased to welcome you to our city, and to extend our gratitude for your presence at the ceremony to mark the official beginning in Hong Kong of the "Year of France in China". We feel privileged to have the marvellous Picasso stage curtain on display in the Special Adminstrative Region, and we look forward to an enlightening year ahead.

Your visit is also a symbol of the excellent relationship between France and Hong Kong. We are fortunate to have about 6,000 French nationals in Hong Kong. It's the largest French community in East Asia, and it's expanding every year. These people, and their employers, make a significant contribution to Hong Kong's economy. French companies feature prominently in our banking, insurance and construction industries. World-famous French luxury-goods manufacturers have recognised Hong Kong not just as a sophisticated market but also as the best place for their regional headquarters as well.

Mr President, of the some 450 French companies that operate here, about half use Hong Kong as their regional base. And about one-third are active in the Pearl River Delta, the most dynamic economic region in the world today. This tells us we are heading in the right economic direction.

But there's more to the French presence than business. French scientists and academics are helping move Hong Kong forward in the areas of education, research and development and technological innovation. Since 1998, the France-Hong Kong Joint Research Scheme has supported 68 research projects. Several joint research laboratories have been established with our universities, including a collaboration between Hong Kong University and the prestigious Institut Pasteur, which is at the forefront of the fight against infectious diseases. Add in the annual "Le French May" festival, and this strong French presence is a key factor in making Hong Kong "Asia's world city".

Mr President, since the return of Hong Kong to China seven years ago, we have suffered through the Asian financial crisis, the bursting of the asset bubble, steep fall of property prices, the consequential erosion of personal wealth, job migration to lower cost areas, high unemployment and then last year, SARS. It was indeed a prolonged and difficult period of economic restructuring. Throughout this period, we were constantly evaluating our competitive advantages and disadvantages to chart our course forward. It was clear to us that our main thrust must be on how to benefit from the rapid and orderly development of China, by far the fastest-growing large economy in the world. We could see that Hong Kong's role would become even more important as the world beat a path to the Chinese market. We needed to secure greater access to that market for our businesses and professionals, and to build on our expertise in servicing the Mainland's trade and investment needs. It was this thinking that led to CEPA, our Closer Economic Partnership Arrangement with the Mainland, and to greater co-operation with the Guangdong Provincial Government on Pearl River Delta and Pan-Pearl River Delta. This new arrangement will enable multi-national companies such as those from France to use Hong Kong as platform to launch business onto all parts of the Mainland, particularly to the Pearl River Delta and Pan-Pearl River Delta.

Our restructuring has been painful, but our economy is now more competitive and dynamic. With the global economic recovery, the support of the Central Government and our focus on regional co-operation, Hong Kong's economy is recovering quickly. Our economy grew by 7% in the first quarter of this year and 12.1% in the second quarter of this year. Deflation is ebbing away and unemployment is trending downwards. Mr President, when I visited you in Paris in November last year, we were just emerging from the economic difficulties. I hope during your short visit to Hong Kong today, you can see for yourself that we are marching forward with renewed confidence.

Mr President, I extend to you, and to all the people of France, an open invitation to visit Hong Kong again, so that we can continue to build on a friendship that we in Hong Kong value very much.

And now, ladies and gentlemen, I would like you to rise. I would like to propose a toast:

"To you, Mr President and Madam Chirac, and to the growing friendship between the French Republic and the Hong Kong Special Administrative Region."

Ends/Tuesday, October 12, 2004

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News clip(Real Media/Windows Media)

CE meets French President at Government House (Real Media/Windows Media)