Mr Chen said instead of wasting time doing nothing, Guangzhou's business community had decided to make use of modern technology. The city's website had been streamlined so investment deals could now be started, negotiated and sealed via e-mail.

Mr Chen said once they identified opportunities for investment, parties could close deals online instead of having to sign it in person in Guangzhou.

The vice-mayor was speaking to a Hong Kong media delegation - the first such group to visit the city since the Sars outbreak - organised by the Better Hong Kong Foundation and led by its executive director, George Yuen Kam-ho.

Mr Chen also said the central government had stepped up negotiations with Hong Kong on the proposed Closer Economic Partnership Arrangement (Cepa), which would increase cross-border integration.

He said 'concessions in Hong Kong's favour' were being considered by the government.

Hong Kong Secretary for Commerce, Industry and Technology Henry Tang Ying-yen discussed details of the Cepa with Vice-Minister of Foreign Trade and Economic Co-operation An Min on the sidelines of an Apec meeting in Thailand last week.

An agreement on the economic pact is expected to be reached by the end of this month, according to sources.

Financial Secretary Antony Leung Kam-chung stated in his budget speech in March that progress had been made in recent talks about the prospects for finalising the agreement.

Businessmen in Hong Kong are hoping an agreement will allow them to benefit from liberalisation of the restricted service sectors before other parts of the world can take advantage of them as part of China's WTO accession terms.

The biggest hurdle in the negotiations is the widespread belief that businesses on the mainland may suffer if Hong Kong firms are given greater market access.

However, the Hong Kong General Chamber of Commerce has argued that the mainland will also benefit and that a regional trade agreement is not a one-way street.

It pointed out that while Hong Kong will benefit from early liberalisation of some service industries, it will also take on the risk of early exposure to the problems plaguing China's WTO implementation.

Hong Kong is also trying to get an agreement for duty-free exports to the mainland.

Mr Chen said as co-operation intensified, the greater Pearl River Delta would become a powerhouse of manufacturing, logistics and tourism and other services, like banking and finance.

'In future, we must study the possibility of co-operation in new fields and further co-ordination in infrastructure,' he said.

Mr Chen urged Hong Kong businesses to invest further in the region's three major logistics centres: Baiyun Airport, Nansha and Huangpu port.