Transcript of remarks by the Chief Executive Mr Tung Chee Hwa at the Hongkong Bank headquarters in London yesterday (October 21).

Cliff Bale, RTHK: Did you have a premonition that you were going to be late?

Mr Tung: We started thinking about taking the train last night and we finalised our plans earlier this morning. I did say to you, why don't you try the train because it could have been a very good ride. (Remarks in Chinese) We were very lucky, we got here about 10.30 and got on with work right away.

John Ellison, Oriental Daily News: Mr Tung you are going to be asked here about your coming elections in 1998 and the state of democracy. You spoke about it very persuasively last night in Brussels. Two questions: Are you telling us there are 2.5 million voters who are going to vote in May 1998 and secondly, if you are as enthusiastic about democracy as you obviously are why do you so object to the formula reached by your predecessor in 1995 allowing even more people the vote?

Mr Tung: Well, there are two and a half million registered voters. We will do our best to increase that number, trying to persuade more people to register and also on that day trying to get more people to vote. So as to whether everybody will vote or not, the record hasn't been this way that everyone who is registered has voted. But we will do our very best to persuade people to vote.

John Ellison: So 2.5 million can vote?

Mr Tung: They are registered voters.

UK Reporter: Mr Tung can tell us when all the members will be elected, rather than having half appointed? Have you got a target date in mind for that?

Mr Tung: No, we have no target in mind for that. Democracy is something we all believe in very much. Democracy is something we care for very much but democracy has to go through, in terms of eventually reaching universal suffrage, an evolutionary process and for us the Basic Law has defined period of 10 year. At the end of the 10-year period we will have the opportunity to look at it for ourselves how we want to go ahead. Universal suffrage is our final objective. You may say to me, well, why don't you go faster? And you sir (John Ellison) said to me why didn't you accept '95 package. Well, the fact is, A: we are going by the Basic Law and secondly is that, don't forget, for 156 years, until the 1990s, there were no elections. And as I say, the political process is an evolutionary process. And yesterday I was saying in Brussels that for America to move from indirect elections to universal suffrage it took 183 years. Now we are not going to take that kind of a time frame.

Sheel Kohli, SCMP: Mr Tung the market is down quite sharply today and apparently there are reports coming from Hong Kong that one of you cabinet ministers Mr Tien (?) has said that we should revisit the peg. Do you believe that that is something that should happen that we should revisit the peg, especially in light of the devaluations in the other parts of the region which are obviously making Hong Kong uncompetitive.

Mr Tung: I don't know who you are referring to, Mr Tien. But let me tell you this, in Hong Kong we obviously pay a great deal of attention to what is happening around us. We are conscious about this, watch the situation very carefully. The linked exchange rate, between the Hong Kong Dollar and US Dollar has served us very well for the last 14 years. There is no reason to change it. Eighty-three per cent of our economy, of our GDP, is generated through the service sector. We have a very unique position in Hong Kong and no we will stay our course and do our things.

UK reporter: Can you comment on the stock market, falling, it's fallen for two days now quite significantly.

Mr Tung: The stock market has fallen. It is a reaction because, I believe of higher interest rates, because of the uncertainty of currencies in all the other countries and communities around us. I think our fundamentals are very strong, very sound. The market will fall, but our market is very liquid, it's a very good market and the market will find its own level and the important thing is that small investors should be aware that the market does go up and down and so be very careful.

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