Following is the transcript of remarks by the HKSAR Chief Executive, Mr Tung Chee Hwa, at a reception at the Chinese Embassy in London Yesterday (Tuesday).

Ambassador Ma, distinguished guests, friends. I am delighted to be back in London. It's a place of course I'm very familiar with. Unfortunately since I got myself involved in politics I have not been back for almost 15 months and this is very unusual for me. But I am delighted to be back, especially on such a beautiful autumn day such as today.

On July First, Hong Kong was reunited with China and we began a new era in Hong Kong. In the approximately four months since then things in Hong Kong are moving well. All the three branches of the political structure - the judiciary, executive and the legislative branches all moving very well. Life goes on as usual. Our lifestyle has not been affected. The economy continues to expand. Although there are concerns about the currency devaluation in Southeast Asia and this week in Taiwan, but I believe we are strong enough to withstand these uncertainties.

Hong Kong has been very successful, in part because the strength of character and the determination of Hong Kong people. The fact that over the 19 years in the past the rapid development of the Chinese economy has given given Hong Kong a great deal of opportunity to benefit from. In addition to that we in Hong Kong have been blessed with the rule of law, with a very strong civil service, financial management which is both prudent, conservative but caring and a free market philosophy which is moving us forward. These are the fundamental elements which are in fact guaranteed by the Basic Law, which is now being fully implemented in Hong Kong. The Central Government has given us all the support to make sure that 'one country, two systems' is fully implemented, is successfully implemented. The 15th Party Conference was held recently in Beijing and the new direction has been set for the country as a whole and we in Hong Kong look forward to a China which is more prosperous, more open in the 21st Century.

The World Bank report named '2020' clearly stated, or expected that China by the year of 2020 will become the second largest trading entity in the world and of course Hong Kong will stand to benefit greatly from these very good developments. Indeed, we in Hong Kong look forward in participating and contributing the continued modernisation of our country and at the same time receiving a great deal of benefit from this particular effort. With the return of Hong Kong to China, the political baggage, the history, the historic baggage between Britain and China is being put away. The relationship between China and the United Kingdom should turn over a new and glorious page. It is a relationship which is important to both the United Kingdom and to China, but certainly very important to Hong Kong also. And I very much hope that the beginning is now here and that we are all moving forward towards a very good, new relationship, which as I said is very important to Hong Kong. I'm here unfortunately only for two days but I'm here to see my old friends in the United Kingdom, to explain to my old friends what we are doing in the four months that's gone past and what our plans are in the future.

The relationship between Hong Kong and the United Kingdom is a very important one. The United Kingdom and Hong Kong have a special tie and we look forward to an even closer ties I the years and years ahead. And as both Britain has said and China has said, that Hong Kong is the bridge for improving the relationship between the two countries and I know we will all be exerting our effort to make sure the bridge is functioning effectively and working well.

Thank you very much.

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