Solidarity: Shanghai Mayor Han Zheng and Chief Executive Tung Chee Hwa have agreed to enhance co-operation between the two cities.

Hong Kong and Shanghai have identified eight areas in which they will start strengthening their economic and trade ties.

At their meeting in Hong Kong today, Chief Executive Tung Chee Hwa and Shanghai Mayor Han Zheng said co-operation enhancement will benefit both cities.

The eight areas include management and development of airports and ports, travel and exhibitions, investment and trade, education, financial services and exchange of talent.

A new body headed by Mr Tung and Mr Han will be formed to take the issue forward. Hong Kong's Financial Secretary and a deputy mayor of Shanghai will be responsible for the actual work.

Meetings will be held when necessary to discuss projects of mutual interest and solve any problems that might arise.

Mr Tung said enhanced co-operation will not only be a win-win scenario, it will also play a key role in the Mainland's development, adding that although there is competition, there is also more room for co-operation between Hong Kong and Shanghai.

He said competition is healthy, adding that both cities can complement each other in the development process.

Mr Han said healthy co-operation will help the economic development of the two places.