The Chief Executive, Mr Tung Chee Hwa, today met the visiting British Secretary of State for Foreign and Commonwealth Affairs, Mr Robin Cook.

The Chief Executive exchanged views with Mr Cook on a wide range of issues which were of interest to both Hong Kong and the United Kingdom, including the regional financial turmoil and latest developments in Hong Kong.

On regional financial turmoil, the Chief Executive told Mr Cook that Hong Kong was fully committed to maintaining the linked exchange rate.

"The linked exchange rate system provides the necessary certainty and stability for our economic activities. We have the confidence and ability to maintain this system. Market players who doubt our determination in adhering to the link will no doubt be disappointed," Mr Tung said.

"It is a difficult time for people in Hong Kong but we will plough ahead resolutely. We are going to invest $235 billion in infrastructure projects in the next five years to prepare Hong Kong for future challenges," he said.

"With our strong economic fundamentals, prudent financial management, efficient market systems and opportunities arising from the growing economy in the Mainland, I believe that Hong Kong will be the first one to bounce back in the region," he said.

Mr Tung told Mr Cook that the "One Country, Two Systems" policy had been successfully implemented in Hong Kong since the reunification.

"The Central People's Government is determined to ensure that the principle of 'Hong Kong people ruling Hong Kong' with a 'high degree of autonomy' is fully implemented," he said.

Mr Tung told Mr Cook that elections to the first Legislative Council of the HKSAR would be open, fair and honest.

"We are committed to the development of democracy," Mr Tung said. "Our political process will evolve in accordance with the Basic law. I believe this is in the best long-term interest of Hong Kong."

"We have taken the views of different sectors in the community into account in devising details of the electoral arrangements for the coming elections," he added.

Mr Tung also told Mr Cook that Hong Kong had put an end to the Port of First Asylum policy for Vietnamese people arriving in Hong Kong illegally in future. He appealed to the UK Government to accept more Vietnamese refugees and lobby other resettlement countries to do the same.

"The United Kingdom is our largest investor and eighth largest trading partner," Mr Tung said. "We attach much importance to our bilateral relationship and look forwards to greater cooperation in the future."

Mr Tung was pleased to note an improved Sino-British relationship. "A mutually beneficial partnership between China and the United Kingdom is good for Hong Kong," he said.