The following is the transcript of a press conference by the Chief Executive, Mr Tung Chee Hwa, at the Crillon Hotel, Paris, yesterday (Wednesday, HK time).

Mr Tung: My colleagues and I arrived in Paris this morning for the first official visit and we were very warmly received by the President of the Senate, by Prime Minister Jospin and I also gave a lunch time talk at the gathering organised by the TDC and Employers' Association to a group of about 400 businessmen, industrialists. It's a good beginning, we have had some very useful discussions.

I took the opportunity of my visit to particularly emphasise the importance of the Hong Kong-French relationship, how this relationship, with the return of Hong Kong, should be further advanced. France is our 10th largest trading partner. The economies in Asia are presently having some difficulties but I have no doubts that they will recover. China is moving ahead very well economically. A lot of opportunities will still be there in Asia and I hope French business people will continue to seize on this opportunity and certainly use Hong Kong as a base for their activities in Asia.

With the Prime Minister we also discussed the Asian currency turmoil, its impact on Hong Kong, the likely impact on the rest of the world.

I also had the opportunity to discuss with him the issue of France granting Hong Kong SAR Passport a visa-free arrangement and we agreed the two of us should sit down together, seriously looking into the technical aspects as to how we take this forward.

It's the first day, it's a busy first day but I'm glad it's a very fruitful first day. Thank you very much.

Q(French Radio): Question in French on the International Federation of Human Rights and limits to freedoms in Hong Kong, freedom of association and whether there should be concern for the future.

Mr Tung: Thank you very much for this question. Let me first say this, that human rights are not the monopoly of the Western countries. We all care very much about human rights. Secondly, I think I can proudly say the human rights record in Hong Kong rivals anywhere else in the world, anywhere else in the world, and I would welcome whoever they may be to come to Hong Kong, talk to us, look at the realities of the situation. There might be misunderstanding here and there but I look forward to welcoming anybody who would like to come and talks to us.

Q (Reuters): Mr Tung, in the speech you gave this afternoon you mentioned the currency crisis. And you very briefly mentioned Indonesia. Two questions about Indonesia - do you think that Indonesia's problems could cause another wave of currency instability in Asia and secondly you also spoke very highly of the currency board system you have in Hong Kong. Would you suggest that for Indonesia?

Mr Tung: Thank you very much. In Hong Kong we are of course concerned about further deterioration in Indonesia. The fact is that Hong Kong's trade and investment relationship with Indonesia are really not that significant. But nevertheless any instability around the region will tend to cause ripple effect and that effect may come through to Hong Kong also. But I might like to add the issue of Indonesia needs to be resolved by the international community because if it is not it's not just a question of Hong Kong. I think the ripple effects will be felt all around the world.

With regards to your second question, we are very proud of our currency board arrangement. It's been operating successfully for 14 years. Not that we are particularly clever, it's just that we have learnt from the mistakes of the past and the currency board has been operating very well. The fundamentals of a currency board must be supported by strong fiscal discipline, good banking supervision and a whole lot of other financial management infrastructure. So I would not recommend it on anybody unless they are really ready for it.

Q (Reuters): Does that mean that Indonesia is not ready for it?

Mr Tung: Well I think these are some of the things we need to look into but certainly you have to really be ready for it to make it successful.

Q (Cliff Bale, RTHK): I would like to ask you first of all on the visa-free what exactly you have agreed with French officials, how you envisage this will be taken forward. Secondly on the subversion laws can I ask you, do you envisage coming forward with draft legislation before your policy speech or afterwards.

Mr Tung: I think with regards to the visa-free arrangements, as I said earlier on, that we are hoping that the technical groups of the two governments will get together to review how to proceed. When we are ready to make a more detailed statement on it we will certainly do so, but not today I'm sorry.

With regards to your second question, as you know that according got the Basic Law we need to enact laws according to Basic Law Article Law 23, we need to enact laws on national security issues and we would do so after consultation at a time when the first legislature is going ahead already. And at this moment we have absolutely no fixed idea as to when the precise timetable would be, it's not an issue that we have been looking at at the moment.

Q (Cliff Bale, RTHK): Could you say whether it's likely or unlikely before or after your Policy Address.

Mr Tung: Unfortunately I can not because it's not a subject I have given any thought to at all.

Q (Angela Li, SCMP): Do you think Executive Council member Henry Tang has breached the principles of confidentiality and collective responsibility when he revealed to the press yesterday that the Executive Council has approved the renewal of the Star Ferry franchise? And do you think such principles still survive in the Executive Council?

Mr Tung: It is a very specific question to which I have no details of, so I can't respond to you specifically. But I would say this, that confidentiality and the collective responsibility is still very much part of the Executive Councillors' responsibility and duty and that should be so. As to whether he said it, it would depend on what he said, whether he said it before or after the government made an announcement, so without knowing the details I can't answer you, I'm sorry.

Q (French reporter) Question in French on Indonesia.

Mr Tung: I think the way forward in Indonesia is to support the IMF effort. At the same time, for the international financial institutions, also to give the necessary support so the restructure can ultimately be successful. It is important for both to go together. Thank you.

Q: (French reporter) Question in French on the elections in May, the climate in Hong Kong and if there have been any changes since the previous elections.

Mr Tung: Judging by the noises in the community, the noises by the political parties and independent candidates who are preparing to participate in the election it's going to be a very active campaign. I'm quite sure the election will be fair and open to all the participants. One of the major differences in so far as the election itself is concerned is that in the directly-elected seats the contest is going to be based on proportional representation, rather than first past the post methodology. And there's also some adjustment in the functional constituency. But let me tell you this, there are about 2.9 million people who have already registered to vote and this is the largest we have had on record. We are all working very hard to make sure the election is successful.

Thank you very much.

Chief Executive's Press Conference in Paris (Chinese part)