XN000022-1997-03-13 — Page 10

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Another major development is the appointment by Mr Tung of his Executive Council. As the highest policy-making body in Hong Kong, the SAR Executive Council will play a key role in mapping out our future plans beyond the transition, she said.

The nomination of principal officials on February 20 marked yet another major step in preparing for the establishment of the SARG on July 1.

"The news that all eligible serving principal officials are re-appointed to their existing posts and the announcement on the new Secretary for Justice and the new Commissioner, ICAC have all been very well received by the community and the wider investing public."

She added that it also bodes well for continuity of our existing systems and policies after 1997.

Mrs Chan said that even one year ago, no one could have expected that Hong Kong would be in such a good shape in the final lap of the transition.

"Economically, we are doing very well. For most businessmen and international investors, 1997 has come and gone. We expect a steady growth of 5 per per annum in our GDP in the medium term. Inflation has moderated considerably in the last twelve months and unemployment has dropped back to around 2.6 per cent."

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IMF not only considers that Hong Kong's macroeconomic conditions are healthy, but it also gives firm and clear endorsement of the continuation of Hong Kong's existing policy framework, namely prudent fiscal policy, the linked exchange rate system and firm financial regulation, she said.

The Chief Secretary expected that the remaining 100 odd days would be no less trying and challenging than what we had experienced in the final years of the transition.

Despite the hard work of both the British and Chinese Governments, there are still a number of important transitional issues that remain to be resolved, she said.

These include crucial questions like the right of abode, our bilateral civil aviation links, localisation of laws, reciprocal enforcement of judgements, etc.

"We are re-doubling our efforts in the hope that we could complete most of the outstanding work at the next JLG meeting. But we need cooperation from both sides and are acutely aware that time is running out."

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