Mr Song Baorui, Governor of Sichuan, Director Li Xiaoxue of China Securities Regulatory Commission, Chairman Edgar Cheng of the Stock Exchange of Hong Kong, Chairman Anthony Neoh of the Hong Kong Securities and Futures Commission, Executive Director Michael Sze of the Hong Kong Trade Development Council, Ladies and Gentlemen,

It is my great honour to be invited to speak at today's Seminar on the Securities Market of Hong Kong, which is organized by the Stock Exchange of Hong Kong and co-organised by the Hong Kong Trade Development Council and the Hong Kong Securities and Futures Commission.

Sichuan, with its large population, rich resources and excellent geographic environment, has long been known as "the Land of Abundance". As you all know, the Chuandong Natural Gas Field, the largest of its kind in China, is in Sichuan and numerous rare minerals can be found in this province. These natural resources have laid a solid foundation for Sichuan's development into a modernized industrial region.

With the implementation of reforms and the open door policy, Sichuan, "the Land of Abundance", has in recent years become the driving force in the economic development of the southwestern part of China. With the completion of Chengdu-Chongqing Expressway, Chengdu-Chongqing railway, Sichuan-Guizhou railway and Xiangfan-Chongqing railway, a modernized network of land, sea and air transport has been formed. This, in conjunction with the establishment of a mobile phone and information network, has further consolidated Sichuan's key position in China's political and economic development.

The Hong Kong Special Administrative Region express our highest respect for the great success achieved by Sichuan Province. We would also like to stress that we are ready to cooperate with Sichuan Province to promote better and greater developments in the longer term.

I therefore hope that today's Seminar will enable all of us here to have a better understanding of Hong Kong.

Hong Kong is an international financial centre and also a major financing base for Mainland enterprises. Since 1993, a total of 34 Mainland enterprises have been listed in Hong Kong, raising more than HK$50 billion. Most of these enterprises are engaged in manufacturing industry, and some in public utilities, godown and transport industries, etc. For example, Chengdu Telecommunications Cable Co. Ltd. in Sichuan has raised HK$500 million capital in Hong Kong. What, then, is the strength of Hong Kong as an international financial centre and how does its system work? Here, I would like to give you a brief introduction.

Hong Kong is not only a pluralistic city but also a dynamic one. Those who have visited Hong Kong would have had such an experience. Hong Kong is a city known throughout the world for its fast pace and in our financial market, every second counts. Take our stock market as an example. Although its turnover has repeatedly set record highs of late, the automatic trading system of the Stock Exchange can still maintain the rate of completing automatic matching within two seconds and the clearing and settlement systems of the stock and futures markets as well as the banks still operate properly. Today Hong Kong plays a very important role in the financial markets in Asia and the world. In terms of market capitalisation in July this year, the total market capitalisation of the Hong Kong stock market exceeds HK$4,600 billion, the sixth highest in the world and next only to Japan in Asia.

Hong Kong is also the world's fifth largest banking centre. In April this year, our banking sector's external liabilities and claims reached US$1,200 billion. Of the 100 largest banks in the world, 82 have business in Hong Kong. Hong Kong has 182 licensed banks and 160 representative offices of foreign banks from over 40 countries. Hong Kong is also a major fund management centre in Asia. Over 35 international fund management companies have set up their regional headquarters in Hong Kong and the total amount of funds managed is close to US$100 billion.

Hong Kong is a free market economy. It is also a place under the rule of law. Article 109 of the Basic Law adopted by the National People's Congress expressly stipulates that the Government of the Hong Kong Special Administrative Region shall provide an appropriate economic and legal environment for the maintenance of the status of Hong Kong as an international financial centre. To achieve this, we have to ensure the fairness, efficiency and global reputation of Hong Kong's financial markets through the law and the regulatory and administrative systems. At the same time, we have to encourage the markets to develop new products and new areas of services. The Securities and Futures Commission, the Stock Exchange and the Futures Exchange are our good partners in these two aspects. The Exchanges have been constantly developing new market products and expanding the markets to meet the demands of different investors. The SAR Government is also striving to enhance Hong Kong's competitiveness in various areas in the region and the world.

Hong Kong will allocate resources to improve its existing financial infrastructure and to link up various information and operation systems in the financial markets, with the aim to enhance the trading and settlement ability of the market system. We are also actively considering the establishment of a Second Board Market to assist the development of industries in new technology. In the meantime, we are committed to promote manpower training which covers basic education, tertiary education as well as professional training. This will continue to improve the quality of the workforce in the financial sector and various services and maintain the momentum of development in the next century.

Looking into the future, we are full of confidence. With a sound and stable economic foundation for the HKSAR and a favourable environment under the "one country, two systems" concept, coupled with the ever increasing economic cooperation with the Mainland after the reunification with the motherland, we will be able to promote our mutual understanding and create more opportunity for cooperation for our mutual benefits under the basic principle of "one country, two systems". I strongly believe that in the next century, Hong Kong's financial markets will have a even more impressive development, and play a even more important role in the motherland's economic reform.

Thank you.