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"We realise that our future lies with China. We are proud to be Chinese and we want to contribute to China's modernisation.
"But above all we are proud of Hong Kong and of our unique blend of the best of traditional Chinese and Western values," she said.
She explained to the audience that under the Joint Declaration, Hong Kong would not become a part of China just like any other province, but instead as evidenced across the border in Guangdong Province, the Hong Kong influence was spreading northwards.
She said Hong Kong would become a Special Administrative Region with a high degree of autonomy.
Hong Kong, Mrs Chan stressed, would continue with its capitalist way of life, without interference from China, which would be responsible for foreign affairs and defence only.
"It would have its own government, composed of Hong Kong people.
"No Chinese officials would be posted to Hong Kong to work in the government. Hong Kong would have an elected legislature and pass its own law.
"Hong Kong people would keep their existing rights and freedoms - rights of property, assembly, free speech, worship, etc. The international human rights covenants would continue to apply," said Mrs Chan.
The Chief Secretary said Hong Kong had given its people freedom, opportunity and choice.
She said: "They're the hallmark of a great country and, in Hong Kong's case, the bedrock on which we will strive to reach new heights.
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"We are determined to continue the Hong Kong success story Hong Kong people running Hong Kong.
"That's how it has been under Britain and it will continue after 1997 under the Chinese umbrella. There will be bumps along the road but we will overcome them as we have overcome past adversities," Mrs Chan concluded.
End
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