Chief Secretary Anson Chan Fang On-sang last night struck an upbeat note on the future Special Administrative Region, despite warning that time was running short on some outstanding transitional issues. Speaking to leading industrialists, Mrs Chan said: 'Even one year ago, no one could have expected that Hong Kong would be in such good shape in the final lap of transition. 'Economically, we are doing very well. For most businessmen and international investors, 1997 has already come and gone.' Mrs Chan's comments came at a dinner hosted by the Federation of Hong Kong Industries, just a day after the Government revealed forecasts that the territory's reserves would reach a massive $330 billion by the handover. 'We are confident that the Special Administrative Region government will start life in the strongest possible financial position,' said Mrs Chan. Despite positive developments such as the selection of the future chief executive, Tung Chee-hwa, and the securing of a through-train for all eligible serving principal officials, Mrs Chan warned that the run-in to the handover 'will be no less trying and challenging than what we have already experienced'. Already appointed as Mr Tung's No 2 in the SAR administration, Mrs Chan stressed there were still important transitional issues to be resolved. They included the right of abode, bilateral civil aviation links, localisation of laws and the reciprocal enforcement of judgments. 'We are redoubling our efforts in the hope that we can complete most of this outstanding work at the next Joint Liaison Group meeting,' said Mrs Chan. The JLG is due to meet in London next week. 'But we need co-operation from both sides and are acutely aware that time is running out. 'But, looking ahead, I believe the SAR will start life on a reasonably good foundation.' Noting that the past 13 years had been spent building a foundation that would enable the SAR to enjoy the high degree of autonomy promised by China, Mrs Chan called on Hong Kong people to stand united to make the concept of 'one country, two systems' work. 'We must respond to the changes we see all around, but at the same time have the wisdom and courage to resist attempts to change what must not be changed,' she said. Mrs Chan cited the rule of law, civil liberties, freedom of expression and assembly, the need for a level playing field, a politically neutral civil service and an open, transparent and accountable legislature as vital for the future. 'These are the values and systems which have produced the Hong Kong that we all know and love,' she said. 'We must cling fast to them if Hong Kong is to retain its position in the world league as we move towards the 21st century.'