Revival plan: Chief Executive Tung Chee Hwa outlines a strategy for economic revival at the Legislative Council.

Chief Executive Tung Chee Hwa expects tourism to be booming again around the end of the year.

Attending a question-and-answer session in the Legislative Council today, Mr Tung said he hoped tourism will rebound in the fourth quarter of the year, or the first quarter of next year.

He said he is optimistic about an upsurge as Mainland tourists are expected to flock back to Hong Kong in the third quarter, now that SARS has been eradicated.

"The second and third quarters will show the economic impact of SARS [on Hong Kong]. GDP will suffer a fall and the unemployment rate will go up. SARS dealt a blow to many sectors. Tourism was hardest hit," Mr Tung said.

He added that the Government's relief measures for the tourism, catering, retail and hotel sectors, launched in April, should help re-spark the industries.

"We expect that in the third quarter Mainlanders visiting [Hong Kong] will increase. With the coming of both Mainland and overseas tourists, we hope that in the fourth quarter or by the first quarter of next year, they will be the booming days for tourism."

Mr Tung said a tourism revival will bring a lot of job opportunities for Hong Kong. The Government will also be adding about 72,000 job and training places so that in the short term the unemployment situation will be eased.

"The financial services sector during the SARS spread [also] suffered somewhat, but the recovery should be speedier. We believe that in the latter part of this year about 100 companies will be listed in Hong Kong. That will benefit our financial sector and help maintain our status as an international finance centre," Mr Tung said.

He added that the Closer Economic Partnership Arrangement with the Mainland will also bring a lot of business opportunities.

"SARS dealt a blow to Hong Kong, but the impact will be short term."

To revive Hong Kong's economy, Mr Tung said the Government will do its best to:

* Increase market forces;

* Operate under small-Government, big-market principals;

* Reduce the fiscal deficit;

* Stabilise the property market;

* Maximise land use;

* Ensure the realty market will stabilise, if not go up in value;

* Attract talent from overseas;

* Improve our business and investment environment;

* Invest massively in infrastructure projects, in particular our transport links with the Pearl River Delta; and,

* Enshrine our institutional advantages so that we maintain our competitive edge globally.

On apprehension in some sectors over the implementation of Basic Law Article 23, Mr Tung said the fears are similar to people's pre-Handover jitters.

"I appreciate people have misgivings about Article 23. Before the Handover, people expressed worries about freedoms and civil rights. But six years on, it is plain for all to see that the civil rights and freedoms previously enjoyed are properly protected. Those who have misgivings about Article 23 will live to see their rights and freedoms will not be eroded."

Mr Tung assured lawmakers that human rights and freedoms are the "cornerstone" of Hong Kong, and their preservation is the Government's fundamental responsibility.

"The international situation is in a state of flux. Terrorism is still rearing its ugly head and there are still many uncertainties. National security is something that we cannot trifle with," Mr Tung said.

"Maintaining national security is a sacrosanct duty of everyone in Hong Kong, and it is also a constitutional duty under the Basic Law. Article 23 is an essential task under the Basic Law, and the majority of Hong Kong people identify with the task of maintaining national security."