Tung Chee Hwa after his luncheon address to the US Chamber of Commerce in Washington on Tuesday, September 9, US time :

QUESTION: What is the central message you will be delivering to Members of Congress and the President while you are here in the United States?

MR TUNG: I would like to explain about the transition in Hong Kong, how well we have done, how much confidence we have for our future. I would also like to explain that we are developing our political structure as provided for by the basic law in an orderly manner over the period of 10 years, and on that point many of my friends here feel I am being rather conservative. Well, I'm not ashamed of being conservative. I think being prudent and careful is a good way of moving forward.

In Hong Kong we have all the success, and we are moving forward cautiously, making sure that the success will continue as we move forward.

I will also be explaining to the Congress the importance of good Sino-U.S. relations, because China is our sovereign. As a Chinese person, being patriotic is very natural, as you can appreciate, but America is a very important part of Hong Kong, and from Hong Kong's perspective, a good Sino-U.S. relationship is very, very important to our future.

So obviously, I will also be listening very carefully to what the Congressmen and Senators might be telling me, and I look forward very much to meeting them.

QUESTION: Please give us the status and opening date on the new Hong Kong airport.

MR TUNG: The airport, the Hong Kong Airport and its associated project is one of the largest projects every undertaken anywhere. I am proud to tell you that the airport will open sometime in April of 1998. No final date has been fixed yet, but it's moving ahead on schedule, and we are very, very proud of what we have done.

QUESTION: Thank you. Do you have a sense when China will table further concessions in the World Trade Organization negotiations? Will it be sometime after Jiang Zemin is confirmed as the leader of China?

MR TUNG: Well, my responsibility is looking after Hong Kong. (Laughter.)(Applause.) And it is important that China joins the WTO. I think - I have no doubt in my mind very soon in the future China will become an economic giant of the world, and there is no good reason whatsoever that China is out of the WTO, so I look forward to some speedy conclusion of negotiations, and that China becomes a member of WTO.

QUESTION: What steps might be taken in the future to improve the mobility of Hong Kong professionals to the mainland for work or training?

MR TUNG: I thought we have a lot of mobility of the Hong Kong people moving to China to work. I think they are about -- there is about 80,000, 85,000 managers from Hong Kong who are in fact working in China, and it is one of the reasons why we have shortage of managers, because they are working in China. I don't see any problem from that point of view.

Whoever asked the question, if he has some specific problem, we would like to hear about it.

QUESTION: Do you see the Hong Kong experience vis-a-vis Chinese sovereignty as presenting any lessons perhaps for future relations between North and South Korea?

MR TUNG: That is not one I have thought about. (Laughter.) But I would say this, that we want to make sure one country, two systems succeed, and I know the Central Government very much want to make sure one country, two systems succeeds. It will have a tremendous bearing in my view on whatever may come by, how it may come by insofar as Taiwan is concerned, because the unification of the country is really the ultimate aim of Chinese people.

But I think if the one country, two system does succeed, it also can work in many, many other countries where is -- countries torn up by all sorts of problems. I'm thinking particularly, for instance, of Mindanao, which is part of the Philippines and basically a Muslim area, and there's a question of how to grant autonomy, or this one country, two system, how does it work.

I would hope we will succeed in Hong Kong. I have every confidence we will succeed in Hong Kong, and I hope it sets a good example for Taiwan and for a whole lot of other areas which are facing some difficulties.

QUESTION: Will the British system of law and precedence continue to influence rights in Hong Kong?

MR TUNG: The rule of law is the cornerstone of our success, and we will preserve the rule of law by all means. Rule of law means a very clear-cut set of books you can always go to, you can always rely on. You always know where you stand. Rule of law means an independent judiciary, independent from the executive branch of the Government, and rule of law also means that every person is equal under the law, and this is what we had in Hong Kong, and this is what we will have in Hong Kong in the future. Nothing is more important to us.

QUESTION: Could you please give us your views on the importance of permanent Most Favored Nation status for China?

MR TUNG: Obviously, it is a very important thing for China. I think it is also very important for the United States. It's really very, very important for Hong Kong. I think the annual debate of MFN has gone on long enough, and I would hope that permanent MFN status would be given to China.

QUESTION: Are you able to brief us, give us any insight regarding your visits with U.S. State Department, Treasury Department and other Department officials?

MR TUNG: Yesterday I had a very useful visit with the State Department. Madeleine Albright was particularly gracious, because she was really busy preparing to embark on a very difficult mission in the Middle East. We spoke with her, spoke more with Deputy Secretary Talbott and some other colleagues of the State Department. We had a very useful exchange of views. We talked about Hong Kong's future. We talked about the political evolution as we move forward. I thought the discussion was very helpful.

I'm seeing other members of the executive today and on Friday, so maybe I tell you another time how I got on.

(Laughter.)

QUESTION: A few more. American businesses and Government often work in concert with not-for-profit organizations like United Way to improve people's lives and strengthen communities. Will Hong Kong seek these partnerships?

MR TUNG: Hong Kong people are also known for their generosity. We, of course, have many, many charity activities in Hong Kong, and millions and millions of dollars are raised, including Community Chest, including many functions that deal with natural disasters that sometimes strike in China.

Hong Kong people are known to be very generous. These in Hong Kong are all private sector efforts, not associated with the Government, but we are very proud of these activities. I would imagine that from time to time our Community Chest or our Red Cross does communicate with similar organizations in America to find, compare notes as to how we move forward, do a better job for our own community.

QUESTION: This question is on the subject of the pharmaceutical sector and free trade. Are you aware of price and profit controls on imported medicines being currently proposed by China's Government and already being implemented by some provinces, and do you intend to follow the same course in Hong Kong, or, in the spirit of free trade, will you commit to market pricing practices?

MR TUNG: Well, I'm not aware what China is doing. As I say, my responsibility is to Hong Kong, and I think I can categorically tell you that in Hong Kong free trade we stand for, we mean free trade, nothing will change before or after July 1, and I see Dennis nodding, so I know I'm right.(Laughter.)

QUESTION: You paint a very positive picture about the future of Hong Kong, but every country has problems and challenges. What do you see as Hong Kong's principal challenges being in the near future?

MR TUNG: I think there are many challenges in Hong Kong. One of the major challenges is to move forward in our political evolution process over the next 10 years, to lead the community through this phase of activities.

Other challenges are really livelihood issues. We have a housing shortage problem, which many of you who do business in Hong Kong will understand and appreciate, that on the one hand, the very expensive type of housing, we are probably the most expensive in the world, and in the middle income housing area the cost is now so high the dream of ownership of homes by many middle class Hong Kong people is evaporating away because of the high cost, and then there are still people in the poorer sector waiting to be housed into some decent housing. This is a tremendous challenge for this new administration.

We also face a challenge on education, because we firmly believe if we are going to continue to thrive in the 21st Century our citizens must be some of the best anywhere you can find in the world. We can only do this through adequate investment and tremendous attention being paid to the area of education. There is a whole lot we need to do there.

We need to be looking after our elderly people. They have been contributing to Hong Kong's success in the past, and belatedly we are pushing for mandatory pension fund. It's something we should have done long ago, but we are going for it as quickly as we can.

We need to be looking at the challenges of the new Information Age. We need to be vastly improving our infrastructure in roads and railways.

These are some of the challenges we face, and it is very, very challenging, but on the other hand we also have great opportunities. First of all, we are now one country, and in a one-country sense we can look to China more to see where we can work together with China to complement each other's strengths and weaknesses, to improve our competitiveness, and I must say, we are blessed in this way, that July 1 has come. We are now masters of our own destiny.

I have told and discussed with my colleagues in the Government that altogether dream about the 21st Century where we want Hong Kong to be, and other people can dream, but they don't have the means to achieve anything because they don't have the money to do it, and we have a huge war chest. We have US$60 billion in fiscal reserve, and this is more than most communities, and so we can dream and make it happen also, so we are all looking forward to exciting new challenges in the 21st Century.

But one of the other challenges for us to make sure one country, two system truly, truly begins to work. The foundation is now being laid, things are really going well. We've got to make sure one country, two system move forward, and move forward well.

In this respect, beforehand, I want to assure everybody that in the two system aspect of things, Hong Kong will maintain our own custom, independent custom territory, and that we will be vigorous in cooperation with international organizations in fighting drugs, narcotics, money laundering, in looking at issues as curbing strategic goods trades, and so on, so forth.

Anyway, we have a thousand things on our agenda, things we need to do, but we are very excited that some of us are given the opportunity to move ahead.

QUESTION: What specific actions is the Government in Beijing taking in the future to demonstrate further its long-term commitment to the one country, two systems policy you have so eloquently spelled out?

MR TUNG: Well, I think in the months that I have taken on this responsibility the Central Government has basically left us alone, totally alone in Hong Kong to make decisions that are relevant here in Hong Kong. The issues that relate to foreign policy, the issues that relate to defense, obviously, this is a Central Government issue. But other than that, we are left alone.

What other issue is a Central Government policy issue? South Africa is going to establish diplomatic relations with China on January 1, 1998. That has been announced already. South Africa has a representative office in Hong Kong. Now, whether that, between now and July, January 1 1998, will that be a consulate general's office, or will that be a sort of unofficial trade office, because there was not an official relationship with the Central Government, these are the decisions Beijing will make, because it is a foreign policy decision.

But other than foreign policy, other than defense issues, we in Hong Kong make all the decisions, and it will be the case now, it will be the case in the future. I can speak confidently on that. Thank you.