Delivering his speech at a seminar on "New Era of the Pearl River Delta: Further Integration with the World Economy" Thursday, Tung said the timing was right to accelerate the process.

Combining the economy of Hong Kong and the PRD, which was also a focus in his annual Policy Address made Wednesday, was regarded by Tung as a way to move Hong Kong's economy again.

"Hong Kong and the PRD have developed a very productive synergy since China's reform and opening policies more than two decades ago, and the highly successful `front shops, back factories' model of economic co-operation is now classic," said Tung.

He said Hong Kong has contributed enormously to the success of the PRD while at the same time accumulated substantial benefit to Hong Kong, which truly formed a win-win situation.

According to the research report, the combined GDP of Hong Kong, Macao and the rest of the PRD reached 260 billion US dollars in 2001, placing the region among the top 20 economies in the world, and the combined GDP of Hong Kong, Macao and the PRD may reach over 500 billion US dollars in 10 years' time.

Tung said the PRD has the highest per capita income on the mainland, while its population of over 40 million is also becoming an increasingly attractive consumer market, and as PRD becomes increasingly sophisticated, there is a great need for Hong Kong's professional services, which are opportunities for Hong Kong.

In the meantime, cities of the PRD have realized that Hong Kong's competitive advantages as a world-class international center of finance, business and logistics are irreplaceable, and in fact are valuable assets to the region as a whole, Tung added.

"Our vision is high, which is to join hands to develop the PRD into an internationally competitive major economic region," Tung said.

(Xinhua News Agency January 10, 2003)