Hong Kong leader Tung Chee-hwa launched into talks with Taipei on Thursday, just a day after he had predicted a quick deal on Taiwans future status in this territory, which returned to Beijings control this week.
A Tung aide and a spokesman at Taiwans unofficial mission in Hong Kong told Reuters Tung was meeting Koo Chen-fu, Taiwans top negotiator on Taipei-mainland relations.
China regards Taiwan as a rebel province and is working for the islands reunification with the mainland.
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A spokesman at Taiwans Kwang Hwa Travel Service, Taipeis unofficial representative office in Hong Kong, told Reuters Koo, who came for this weeks handover celebrations, would hold a news conference later on Thursday. He declined to give further details.
A Tung aide told Reuters the meeting would take place on Thursday afternoon but refused to say where in Hong Kong theywere meeting and what the subject would be.
Koo is head of the Straits Exchange Foundation, the Taiwan body that handles relations and negotiations with Beijing.
Tung, holding his first news conference on Wednesday since taking office, vowed to pursue a dialogue with Taiwan and predicted the future of Taipeis official presence in this new special administrative region of China would be settled soon.
Meanwhile, nursing handover hangovers, Hong Kongs business community went back to work on Thursday, reassured by how smoothly the past few days had gone but adopting a wait and see attitude to the new Hong Kong.
This economic powerhouse and sometime political symbol became a Special Administrative Region within China at midnight on Monday, returning to the motherland after 156 years of British colonial rule.
On Thursday, the first working day after a three-day public holiday, business leaders said they welcomed the time off and the predictability of comments by Hong Kongs new Chief Executive, Tung Chee-hwa.
Stewart Aldcroft, director of marketing for Templeton Franklin Investment Service: What were seeing gives us all the same views we had before, that Hong Kong is pretty well set to carry on going forward.
The engine is in place, its running smoothly. Im sure at this point (Tung) wants to try to provide Hong Kong with a very stable environment in the post-handover period, which will then enable us to build confidence.
One surprise: The urgency with dealing with housing seems to have been postponed until the fourth quarter. I thought he was going to try to deal with that first. Now were going to have wait for the policy speech (in October).
George Leung, economic adviser at Hongkong and Shanghai Banking Corp:
On property, he is still thinking what will be the appropriate measures. The (property) market sentiment in the coming few weeks is quite important to him, before he drafts up some measures. So everything at this stage is uncertain.
On whether Tungs government will be more interventionist: The government has long been pro-business. Now its just a matter of whether what he says should be translated into financial assistance or whether rules or regulations will be (introduced)...Whether you want to label him an interventionist,you need to wait and see.
Ian Perkin, chief economist at Hong Kong General Chamber of Commerce: I dont think its more interventionist than the former government...but the one thing that did surprise me was that he went so strongly on the high tech. That was the first time Id come across such a strong statemnet on that...What he means by high tech, I have no idea...And then he asked what is the best use of financial reserves. That was interesting.
Richard Verin, head of equity trading at C.S. First Boston: Everyone sort of said whats expected of them. I dont think there was anything over the handover that was out of ordinary. I think the change happened in Hong Kong a long time ago. Things here had already happened. In that sense, the handover was only confirming the reality at this point in time.
Abhijit Chakraborrti, chief strategist at Lehman Brothers: The handover, the transition, has not occurred. It has started (with) the transfer of sovereignty, but the transition is just beginning now and the key questions, they are not going to be answered now or in the next six months.
Its only in the next two or three years you will get answers to key questions What will happen to the political system, the institutional framework? Are we going to see corruption seeping into everyday life? Are you going to be able to see the (Hong Kong Monetary Authority) continue to maintain credibility and consistency of policy direction or will it be influenced? Will the judiciary remain intact?
These are very important questions for Hong Kong, and they will not be answered now. We have no idea how smooth or rough it is going to be.