A government spokesman rejected remarks by the founder of modern Singapore Lee Kuan Yew that Hong Kong, which returned to Chinese sovereignty in 1997, would eventually lose its unique trading status as it was overhelmed by the rest of China.

"As a leading financial and commercial centre, Hong Kong is well positioned to develop as Asia's World City," a government spokesman said in a statement. "We are strategically located to take full advantage of the prosperity and vast market potential in mainland China."

In comments made at a meeting in Singapore, Lee reportedly said Hong Kong, unlike Singapore, would be powerless to guide its own destiny.

"We can chart our course for the benefit of the four million Singaporeans, unlike Hong Kong where (the) way to the future is decided by China to advance the overall interests of not only seven million Hong Kongers but also 1.3 billion mainlanders," Lee was quoted as saying by the Sunday Morning Post here.

Lee, whose son Lee Hsien Loong took over as Singapore's prime minister earlier this month, said Hong Kongers would also have to compete with mainland Chinese for jobs and contracts its own people would otherwise have won automatically.

Hong Kong said its very link with China would ensure its continued success.

"We have access to ... unique advantages bacause of our position as a special administrative region of China," the statement said.

The two former British colonies have long competed for southeast Asian commercial supremacy.

Both regularly top ratings agencies' lists of the world's freest economies and jockey for trade honours such as the world's busiest port label.

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