CHINA will maintain Hong Kong's pegged exchange rate after the 1997 handover to mainland rule, a senior Chinese government minister said yesterday. Foreign Minister Qian Qichen told a Hong Kong delegation in Beijing the Hong Kong dollar would remain pegged to the US currency beyond 1997. Mr Qian said that although Britain and China had suffered political disagreements Beijing was committed to maintaining economic stability in Hong Kong. He said Hong Kong should concentrate on economic development and warned it not to become a political city. The statement was in line with Chinese Government policy, according to Dr Miron Mushkat, chief regional economist at US-based broking house Lehman Brothers. ''Given China's rejection of the Patten reforms and the previously agreed political blueprint for Hong Kong, Beijing could be trying to reinforce its commitment to economic stability,'' he said. He said maintaining the pegged exchange rate was the only sensible policy Beijing could pursue, although he warned not to read too much into the comments since policy making in China was arbitrary and could change at any time. The exchange rate is pegged at about 7.78 Hong Kong dollars to the US unit.