Asia-Pacific business leaders have been told by the Chief Executive, Mr Tung Chee Hwa, that he is confident the East Asian economies will 'recover and move ahead' after the recent financial and economic turmoil in the region.

Mr Tung said that Hong Kong would be one of the first economies to rebound as it continues to develop as a 'supercity' of the 21st Century, intermediating not just between China and East Asia but also China and the world.

Mr Tung also emphasised that Hong Kong's linked exchange rate to the US Dollar 'is here to stay'.

"For 14 years, the link has provided the economic stability and contributed to the maintenance of confidence in Hong Kong's role as an international trading and financial centre," Mr Tung said in a keynote address to the influential APEC CEO Summit in Vancouver, Canada, today (November 22, Canada time).

"Given the open nature of the Hong Kong economy, any fundamental change in policy such as delinking would cause grave uncertainty and disturbance, which would weaken investment sentiments."

Mr Tung said that despite market volatility in the region, Hong Kong's ample foreign reserves - the third largest in the world - prudent fiscal planning and a strong and highly capitalised banking system had helped the SAR withstand the effects of recent financial market volatility.

He said the importance of the SAR's role as a gateway to China for international trade and investment would grow as a result of the continued and orderly expansion of China's economy.

Mr Tung said other factors which had helped shield Hong Kong from the recent turmoil, including a free and open economy and an awareness to enhance competitiveness.

"For the rest of East Asia, despite the recent financial turmoil, I believe we will continue to march forward strongly into the 21st Century," he said.

"My confidence is boosted by the successful meeting of finance and central bank officials held in Manila earlier this week.

"It reaffirmed the strong fundamentals of the region and expressed confidence that the region will return to robust growth rates.

"Yes, there are flaws that need to be addressed in many countries in East Asia.

"However, with strong savings and investments, wide open markets, flexible and educated workforces and a willingness to adopt new technology in manufacturing, East Asia, with pride, will recover and move ahead."

During his address, the Chief Executive explained Hong Kong's smooth transition since July 1.

He outlined the guarantees and freedoms contained in the Basic Law, which promises a high degree of autonomy for Hong Kong as well as the continued application of the Common Law system.

Mr Tung told the APEC business leaders that under the Basic Law, Hong Kong would continue to operate as a separate customs territory and to work directly with the international community to control trade in strategic commodities, drugs, illegal transhipments and the protection of intellectual property rights.

The Chief Executive also explained Hong Kong's democratic development as laid out in the Basic Law, as well as the importance of the SAR's role as a gateway to China for international trade and investment.