Tokyo, July 1: Japnese business leaders on Tuesday hailed the handover of Hong Kong, saying the historic event would increase the importance of the territory's role in linking communist China with the rest of the world.They also expressed hope that Hong Kong's prosperity would be maintained after its return to China and that the Chinese economy would be liberalised further in a democratic manner.

Britain handed Hong Kong back to China at midnight (1600GMT) on Monday. Japanese corporations have been among the top foreign investors in the territory.

"We believe Hong Kong will maintain its economic system after the handover and will continue to expand as an important link between China and (the rest of) the world," head of the influential business lobby, Keidanren, or the Federation of Economic Organisations, Shoichiro Toyoda said.

Toyoda also said in a statement it was vital for Asian and global economies to see that Hong Kong, which is already playing an important role as a centre for trade and financial services in Asia, remained prosperous.

The Japan Chamber of Commerce and Industry also praised the handover of the British colony to China but said it would watch closely to see what aspects of Hong Kong would influence China and vice versa.

Head of the Japan Association of Corporate Executives (Keizai Doyukai), Jiro Ushio, said that the handover represented a first step towards a deeper understanding between China and democratic economies like the United States and Britain.

""I hope China will establish systems based on democracy on the economic front as soon as possible," Ushio said in a statement.

President of consumer electronics giant Matsushita Electric Industrial Co Ltd, Yoichi Morishita, said that there would be no change in the firm's business policy in China and Hong Kong.

"We would like to increase the use of Hong Kong's global financial and distribution mechanisms in the future," he said.

"The business environment in Hong Kong will not change greatly in a short period of time due to its return to China," said Morishita, whose company runs three production units, one sales unit and a distribution unit in Hong Kong, and a total of 34 units, including joint ventures, in China.

"We hope Hong Kong will continue to maintain its mechanisms, which are free, transparent and have few restrictions," Morishita said in a statement.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.