President Hu Jintao has exhorted the Government and people of Hong Kong to stand united in handling issues related to the city's constitutional development and to do so in an appropriate manner.

Meeting Chief Executive Donald Tsang in Beijing this afternoon, Mr Hu said the Central Government launched a series measures in the past year to help the city overcome challenges arising from the global fiscal crisis.

Praising Hong Kong's efforts in maintaining its economic stability, the president said positive signs have been seen in the city's development and in people's confidence.

Official encounters: Chief Executive Donald Tsang meets Premier Wen Jiabao (left) and President Hu Jintao (right) in Beijing.

Fiscal uncertainty

Premier Wen Jiabao reminded Mr Tsang this morning to remain alert to the uncertainties arising from the global financial crisis, so the city maintains its healthy economic development.

Mr Wen said it has been a difficult year for Hong Kong due to the global financial turmoil. The global fiscal crisis is not yet over and many uncertainties remain, he added, urging Hong Kong to plan its economic future and prudently handle fiscal issues.

The city should continue to make full use of its advantages and enhance its competitiveness, Mr Wen said, encouraging the Hong Kong Government to focus on developing social services and improving social livelihood.

He reiterated Hong Kong will always have the Central Government's full backing, especially in cementing its status as an international finance centre.

Thanking the Central Government for its care and support, Mr Tsang told Mr Wen Hong Kong's economy had stabilised after the Hong Kong Government implemented strategies to support the city's financial system and enterprises, and create job opportunities.

HK's status

Speaking to reporters this evening, Mr Tsang said Messrs Hu and Wen reiterated the decision to develop Shanghai into an international finance centre will not change Hong Kong's status.

The two cities' development should be mutually-beneficial and complementary, Mr Wen said, adding Hong Kong's financial sector's history and experience, its international networks, strong talent pool and comprehensive legal framework have made its status irreplaceable.

"He said developing Shanghai into an international financial hub will consolidate Hong Kong's role and the Central Government will make full use of Hong Kong's financial advantage," Mr Tsang added.

Mr Wen proposed a number of measures to consolidate Hong Kong's role as a testing ground for the country to launch financial reforms. They include:

* to continue to promote cross-boundary trade settlement in renminbi in Hong Kong, and explore ways to develop renminbi financing and direct investment in renminbi in Hong Kong;

* to promote renminbi bond business in Hong Kong;

* to support and encourage more Mainland enterprises to list in Hong Kong; and,

* to facilitate co-operation between the Shanghai and Hong Kong securities markets.

Mr Tsang also asked Mr Wen to make full use of Hong Kong's advantages when formulating the national 12th five-year plan. Mr Wen said the city will be regularly briefed on the plan's progress.

Six industries

Praising the Government's proposal to develop six industries with high potential, Mr Wen said the move will increase Hong Kong's economic diversity and create more job opportunities.

Encouraging Hong Kong to focus on service industry development, Mr Wen said the Central Government will promote further integration between Hong Kong and the Pearl River Delta.

On environmental protection, Mr Tsang said Hong Kong will play its role in helping the country meet its carbon emission reduction target. Hong Kong will put more effort in energy saving and he has asked the Central Government to support the proposal to increase the use of natural gas and nuclear electricity in the city.

On political reform, the Central Government expressed its sincere wishes Hong Kong can make progress in its constitutional development, urging the city to handle the issue properly, Mr Tsang added.