Chief Executive Tung Chee Hwa expressed his confidence that SARS' impact on Hong Kong's economy - though severe - would only be temporary. He also hoped that Hong Kong and Romania could expand their ties.

Speaking at a lunch at Government House in honour of visiting Romanian President Ion Iliescu, Mr Tung noted that Hong Kong had shouldered enormous challenges in fighting SARS.

"However, with effective measures taken by the Government, and thanks to the concerted efforts of the whole community, we have successfully contained the disease," he told the Romanian leader.

"Our Government has since launched a package of proposals to promote Hong Kong and to revive our economy after the SARS attack. In the past few weeks, there are signs that businesses have rebounded swiftly," he added.

'One Country, Two Systems' a success

Since Hong Kong was reunited with the Mainland six years ago, Hong Kong people have worked hard to make a success of the "One Country, Two Systems" principle that guides our development, Mr Tung said.

"This collective effort, in tandem with the unwavering support from our Central Government, has turned the 'One Country, Two Systems' as a concept into an everyday reality. The transition from a colony to a Special Administrative Region has indeed gone very well."

Hong Kong, like Romania, undergoes reforms

The Chief Executive noted that both Hong Kong and Romania have been through a process of reforms. "You have undertaken some monumental reforms for your country and many of these efforts are now slowly but surely bearing fruits. You will be a towering figure in the modern history of Romania," he told the President.

"Because of the Asian financial turmoil, the bursting of the asset bubble in Hong Kong and the very rapid and successful development on the Mainland, our own economy has been going through painful restructuring and adjustments.

"To promote economic restructuring and revitalise our economy, we have been working hard to forge closer economic cooperation with the Mainland, enhance the quality of our human resources, improve the business environment, and further strengthen the four pillars of our economy, namely, financial services, logistics, tourism, trade and trade-related support services."

Mr Tung stressed that closeness with the Mainland is one of Hong Kong's biggest advantages - geographically, economically and culturally. The recent signing of the Closer Economic Partnership Arrangement, the first free-trade agreement for both the Mainland and Hong Kong, creates immense potential for Hong Kong to become a centre for higher value-added manufacturing for a domestic market of 1.2 billion people, as well as a base for companies providing high-quality services to expand their businesses into the Mainland.

Hong Kong offers myriad advantages

Hong Kong has many competitive advantages, Mr Tung said. These include:

* our rule of law;

* free flow of capital, people and information;

* a level playing field;

* a cosmopolitan lifestyle;

* a transparent and efficient government; and

* international standards and practices of doing business.

"Our position as an international financial centre, a centre for trade and business, a centre for logistics and a premier tourist destination, together with our superb infrastructure and the pool of talents and professionals we possess make us a perfect gateway for multinational companies to enter the huge Mainland market," he added.

"There is certainly scope for boosting business links as well as government-to-government links. Please accept my open invitation to come and visit us again and again. Every time you will find you are most welcome."