China's President Hu Focuses on Hong Kong Economy

July 1 (Bloomberg) -- China President Hu Jintao stressed the importance of economic growth for Hong Kong and said China is committed to the ``one country, two systems'' formula, in a ceremony for the 10th anniversary of the city's handover.

Hu also said China will support democratic development, though he cautioned against undermining the interests of China.

``Social harmony and stability are essential for the economy,'' Hu said in the speech marking the end of British colonial rule. ``With the backing of the mainland, Hong Kong enjoys unique opportunities.''

Britain handed Hong Kong back to China on July 1, 1997. China runs the city as a semi-autonomous region dubbed as one country, two systems. Hu arrived in Hong Kong on June 29 and leaves today before a planned pro-democracy march by Hong Kong activists.

``I am surprised that Hu mentioned democracy in Hong Kong today, which may be the first time for a top Chinese official to talk about it in Hong Kong,'' said Ivan Choy, a politics lecturer at the Chinese University of Hong Kong. ``This showed he understood the city was harmed by the problem of universal suffrage in the past.''

Hong Kong's chief executive is picked by a China-backed committee. Hong Kong's Basic Law, the constitution that took effect in 1997, mandates progress toward democracy, which it calls universal suffrage, without giving a timeframe.

``I will fully support Hong Kong in promoting economic development, improving wellbeing of the people and developing democracy,'' said Hu.

Changing View

Political leaders in Beijing have warned that the city could lose its status as a global financial hub if its people spend too much time on politics. National People's Congress Chairman Wu Bangguo said last month that Hong Kong's autonomy is ``not intrinsic.''

``I am more optimistic about the implementation of universal suffrage on Hu's speech,'' Choy said. ``China used to consider Hong Kong as merely an `economic city,' but they may have changed now.''

Hong Kong's economy expanded 6.8 percent last year, and is enjoying its longest expansion since 1997, as the city is helped by proximity to China, the world's fastest-growing major economy.

China and Hong Kong signed an agreement June 29 to further ease requirements on Hong Kong companies operating in the mainland.

Hong Kong should aim for ``sustained and steady economic growth,'' Hu said. ``Hong Kong people should close ranks and resolutely oppose any attempts to undermine these interests.''

One Country, Two Systems

Hong Kong Chief Executive Donald Tsang went to the podium, along with other Hong Kong officials, to be sworn in to his new term by Hu. About 1,000 people watched the ceremony at the city's convention center.

``Over the next five years, Hong Kong needs to transform itself,'' Tsang said in his speech. ``We will develop a system that is more democratic. We will build a government that is more open.''

Hu said China is committed to the ``one country, two systems'' formula, which lets Hong Kong practice capitalism based on the Basic Law.

He reiterated that without one country there would be no two systems. Hong Kong people should ``put the overall and long-term interests of Hong Kong and China above everything else,'' Hu said.