A spectacle to dwarf Britain's farewell show

Fireworks as Hong Kong's New Rulers Take Charge

They are said to have spent about thirty times as much, detonating more than 20 tonnes of fireworks on eight barges high above the dark waters of Victoria Harbour. The organisers claimed several records - the largest live show produced on water, the biggest laser spectacular and the largest mass karaoke attempt.

BBC correspondent Jeremy Cook looks at China's first day in charge - Dur 2" 36'

Fire and water in the Year of the Ox

Earlier, the new Chief Executive, Tung Chee-Hwa, promised freedom and democracy - although one of the first things the new administration did was to pass more restrictive public order legislation.

Police allowed a demonstration to go ahead, but in future the new law will require that a police permit be obtained in advance. Those behind the protest, the Hong Kong Alliance, expressed fears about a subversion law which is yet to be drawn up.

Screens in Tiananmen Square in Beijing carry the images of Hong Kong's new legislators

Mr Tung has said he's determined to do something about speculation in Hong Kong's property market, which he says "has seriously affected our competitiveness and people's livelihood."

Announcing a "range of anti-speculation measures", he said: "We will take resolute action when it becomes necessary."

Mr Tung insisted that it would be possible to resolve Hong Kong's housing problem. Property prices in Hong Kong rival those in Tokyo in being among the highest anywhere.

The new government aims to increase the supply of housing with a target of "not less than 85,000 flats a year."

Meanwhile, the Finance Secretary, Donald Tsang, named a committee to advise on the management of a land fund inherited from the British, valued at US$21.8 billion. The announcement, following the transfer of the fund overnight, boosted Hong Kong's foreign exchange reserves to more than US$81 billion.

The committee is made up of a number of leading financiers and businessmen, including Joseph Yam, the Chief Executive of the Hong Kong Monetary Authority, Antony Leung of Chase Manhattan Bank and Ian Wilson of Britain's Standard Chartered Bank.

Mr Tung also stressed that education was a central priority for the new government. "We must have quality teachers and principals with a strong sense of mission," he said.

Previous stories on the Hong Kong handover

Hong Kong Reverts to China
China Celebrates End of "Shameful Era"
Chinese troops arrive in Hong Kong
Governor Patten Leaves Government House
Britain Wins Assurance Over Chinese Troops
Party-time in Hong Kong
Handover Day picture special