Closer co-operation between Hong Kong and Guangdong Province in southern China, would result in a win-win situation said Chief Executive Tung Chee Hwa. He made the comments on the visit of the Governor of Guangdong Province Lu Ruihua to the SAR where both leaders discussed strategies to speed up co-operation.

“The Pearl River Delta has one of the fastest economic growth on the mainland. With its 40 million population, it is a lucrative market to Hong Kong. Co-operation with the region would help Hong Kong transform its economy successfully,” said Mr Tung.

He added that Hong Kong’s role as an international financial, information and logistics centre would benefit Guangdong and create a win-win situation.

Both leaders agreed that Guangdong and Hong Kong complement each other with Hong Kong as the “front shop” and Guangdong as the “rear factory”. More investments from Hong Kong will help expand this relationship, they said.

“This kind of business model brings mutual benefits to the two economies,” said Mr Lu. “Amidst a global economic slow-down, co-operation between the two has become more important.”

“In the long run, co-operation between Hong Kong and Guangdong especially the Pearl River Delta will form a competent and proficient region. Co-operation will further bring economic growth and prosperity to the two economies.”

In a move to boost tourism to the SAR, the price of Hong Kong tours for mainlanders would be reduced by 20 per cent from the beginning of September, Mr Lu said. Non-Guangdong citizens who have been living in Guangdong for more than six months will be given special treatment and will be allowed to visit Hong Kong if they submit their applications in Guangdong.

Mr Tung, in a related move, said the Hong Kong Airport Authority is exploring the possibility of co-operating with four airports in the mainland and pledged to ease crowd, traffic and cargo flows at Lo Wu and Lok Ma Chau control points.