Hong Kong and Singapore are set to scale new heights of achievement in the 21st Century, the Chief Executive, Mr Tung Chee Hwa, has today told Singapore's business community.

The Chief Executive told the Chinese Chamber of Commerce of Singapore that there was 'plenty of room for both of us' in the rapidly expanding Asian economies.

"Hong Kong and Singapore have achieved a great deal over the past fifty years. We have done that despite being very different places with different approaches," Mr Tung said in his first keynote address in Singapore since becoming Chief Executive.

"But our differences are a stimulus to thought: indeed, we may often learn from each other. In many ways we are, and will remain, competitors but how much duller and more difficult it would be for both of us if there were only one point like us in Asia.

"We don't have to worry about competition: there is plenty of room in the region for both of us. The benefits of a competitive, open approach in business and commerce have been realised all around us, and our two cities now stand at the centre of the most rapidly growing economic region on earth.

"Despite the recent setbacks, the bottom line is this: ten years ago, the total GDP of the ten leading regional economies was US$3,265 billion, today it is over US$7,000 billion.

"China and ASEAN countries will continue to develop, and there is every prospect that we will see a substantial rise in the quality of life for our citizens in the decades ahead, combined with a substantial increases in the opportunities for business and commerce that we can both enjoy.

"I know, for both Hong Kong and Singapore, the focus will be on building our cities into centres of excellence. I am confident both of us will scale new heights in achievement in the 21st Century."

Mr Tung said Hong Kong and Singapore were often seen as rivals, competing in many areas, but actually gained much from each other.

He said Singapore had invested US$7 billion in Hong Kong and that there were around 100 Singaporean companies based in Hong Kong. Singapore was home to about 140 Hong Kong company offices.

Mr Tung said it was a great honour for him to address the Chinese Chamber of Commerce as the first Chief Executive of Hong Kong.

He told the business leaders there was great confidence that the future in Hong Kong would be even better 'for our children and grandchildren'.

Mr Tung said there were several reasons for confidence in the future of Hong Kong which, like Singapore, had its heart in Asia but embraces the world.

One reason was that China's leaders were fully committed to making the concept of 'one country, two systems' work.

"They have complete faith in the ability of Hong Kong people in administering Hong Kong; and have pledged their full support for us," he said.

Another reason was that Hong Kong and the Mainland shared long-term interests and 'if Hong Kong succeeds China will benefit and if China is prosperous, Hong Kong will be even better'.

He said China's leaders had a 'global outlook' and a clear vision of the future to steer China forward into the 21st Century.

The guarantees of a high degree of autonomy contained in the Basic Law, free-market policies, prudent fiscal management, the rule of law, a level playing field, a highly-efficient civil service, and vigorous anti-corruption action were also major factors in Hong Kong's continued success.

Mr Tung said his priorities as Chief Executive would include education, housing and care for the elderly.

"One of my reasons for coming to Singapore so soon is to have a look at what you are doing in response to common challenges that we face," he said.

"Seeing what others are doing helps us to look critically at our own policies. In many ways our cities are complimentary and we face many similar challenges. We give each other a much better yardstick for comparison than any of our neighbours."