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Following is the remarks by the Chief Executive, Mr Tung Chee Hwa, at the Cocktail Reception for the Opening Ceremony of the BIS Representative Office for Asia and the Pacific today (Saturday):

President Verplaetse, Mr and Mrs Crockett, Governors, distinguished guests, ladies and gentlemen,

July has been an exciting month for Hong Kong. With the presence of President Jiang Zemin, Hong Kong celebrated our first anniversary as a Special Administrative Region of the People's Republic of China. We had also the honour of the visit of the US President Bill Clinton who included Hong Kong as part of his State Visit to China. On July 2, we celebrated the official opening of our new Hong Kong International Airport. And I'm glad, having spoken to some of you and you have confirmed to me, that the airport is operating well at last. We are particularly pleased that those visiting dignities who participated in the activities were able to see for themselves the successful implementation of "one country, two systems" in Hong Kong.

Today is July 11. I have great pleasure to be here to celebrate the opening of the first overseas office of the Bank for International Settlements (BIS). Hong Kong is honoured to be given the privilege to play host to the Representative Office of BIS in Asia and the Pacific. As pointed out by Mr Crockett, this is an important step for the BIS, as they move beyond their headquarters in Basle, Switzerland, in order that they could better serve this region. The presence in this room of a good number of governors and senior officials from the central banks in this region as well as around the world is good evidence of the support for the Representative Office here in Hong Kong.

The timing of this BIS initiative is very fortuitous because Asia is facing a very challenging time after the havoc with the Asian currency crisis over the past twelve months. The origins, causes and effects of the Asian currency crisis are complex, but the broad problems are fairly well known. One major reason was the increasingly open global financial market system. While there are enormous benefits from financial liberalisation, this must be built upon a robust financial system in order to cope with the volatility associated with capital flows. I believe that the BIS, with its expertise and physical presence in this geographical hub of Asia, should play an important role in strengthening the financial systems in Asia during the recovery period.

Though the financial crisis in Asia has caused pain to us all, the fundamentals in Asia still remain. We still have innovative entrepreneurs, a hard working and flexible workforce, a very high savings rate, and openness to trade and ideas. The affected economies, including Hong Kong, are now undergoing a period of painful adjustment and consolidation. However, I would expect Asia to come out leaner and stronger after the adjustments, given Asia's indomitable spirit to improve ourselves. Hence, we are not seeing the end of the Asian miracle but the beginning of the Asian recovery in the new millennium. To do this we will have to have the support, co-operation and understanding of our friends from Europe and from America. I am pleased that the BIS is here to represent global interests in Asia. I am sure this office will be at the heart of momentous changes of Asian history.

Before concluding, let me thank President Verplaetse, Mr Crockett and the BIS Board again for their decision to locate their office here in Hong Kong, which is good for both Hong Kong and the region. We are indeed very, very honoured.

I must also thank the Central People's Government, particularly the Ministry of Foreign Affairs and the People's Bank of China, for their tremendous support and efforts in the establishment of this BIS Representative Office here in Hong Kong.

Thank you all very much for making this possible.

Thank you.

End/Saturday, July 11, 1998

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