The Chief Executive, Mr Tung Chee Hwa, has wrapped up a two-day visit to the UK with 'useful and wide ranging' talks with Britain's Foreign Secretary Robin Cook.

In a three-hour briefing session yesterday (Wednesday), which included a working lunch, Mr Tung explained how Hong Kong continues to function normally and smoothly since the Handover.

Also included in the talks were Foreign Minister Derek Fatchett, Britain's Consul General to Hong Kong, Mr Francis Cornish and Consul General designate Sir Andrew Burns.

The talks covered several areas of major mutual interest, including trade ties, next year's Legislative Council election, Vietnamese Refugees, visa-free access to EU member states for SAR Passport holders, the importance of a constructive Sino-UK relation and bilateral arrangements on a number of issues.

"I had a very useful and friendly discussion with Mr Cook and we covered a wide range of issues of mutual concern," he said.

Mr Tung also exchanged views with Mr Cook on the recent financial market turmoils in Asia and their impact on Hong Kong.

He reiterated that the linked exchange rate system had served Hong Kong well and saw no reason to change the arrangement.

After the meetings, Mr Cook said Britain was very pleased with the way in which the Hong Kong Government and Hong Kong society had developed since the Handover.

"I had a very full discussion with C H Tung and also lunch with his party. The discussions took place in a cordial and positive atmosphere," said Mr Cook.

"We discussed a range of issues affecting our relations with Hong Kong and the future of Hong Kong. The prime point that I wish to emphasise is that Britain remains committed to do whatever it can to support both the prosperity and the freedoms of the people of Hong Kong.

"We are pleased that the system of two systems and one country is actually working in practice."

Mr Tung said Mr Cook was pleased to hear that the Central People's Government had authorised the HKSAR to enter into bilateral agreements with the UK on the surrender of fugitive offenders and the transfer of sentenced persons.

In the afternoon, Mr Tung called on the UK Secretary of State for Trade and Industry, Mrs Margaret Beckett, during which they shared views on the importance of promoting free trade on a multi-lateral basis through the World Trade Organisation, and on efforts to enhance economic competitiveness.

Earlier in the day, Mr Tung addressed the influential Royal Institute of International Affairs, where he expressed the hope that the Handover could pave the way for better UK-Hong Kong ties and improved Sino-UK relations.

"Coming to Great Britain as the first Chinese to have responsibility for leading Hong Kong, I feel, like all Chinese, a great burden of history hanging over me," said Mr Tung.

"The heaviest stones of the past ere the events that led to Hong Kong becoming a colony 156 years ago.

"We should not forget history. At the same time we should not be slaves of history.

"With the shedding of the baggage of history, the successful reunification of Hong Kong with China will, I hope, herald a new and significant chapter in the relationship between the UK and China.

"Hong Kong and the UK have had a special tie. We in Hong Kong look forward to even closer ties with the UK as we enter into a new era."

Mr Tung leaves London this (Thursday) afternoon and will arrive in Hong Kong tomorrow morning.