President Hu Jintao promised continued support for Hong Kong and Shanghai, but warned the West not to meddle in their affairs - by which he presumably meant for the West not to continue to press for increased democracy in Hong Kong.

Meanwhile, Chairman of the State Assets Supervision and Administration Commission Li Rongrong told reporters that Chinese companies would still be encouraged to list in Hong Kong, but that the market needed to 'improve' itself. 'We are continuing the arrangement for companies to be listed in Hong Kong,' he said, adding: 'We only encourage them. The ultimate decision lies with the companies.'

Li may have meant that the 'red-chip' market should somehow be opened to Chinese investors. Red-chips (or H-shares) are companies which incorporate and list outside China, and there have been complaints from Beijing about the exclusion of mainland investors from such stocks.

Li said he thought that the red-chip problem would be resolved in the near future.

Despite some volatility, Hong Kong's share index the Hang Seng has been standing at around 28,000 recently. That's up 40% this year. And just a few years ago, the Hang Seng was languishing at around 11,000. But it could have gone much higher if the mainland had not discouraged additional H-share listings.

A year ago, Hong Kong seemed set fair to reap a major crop of Chinese IPOs in 2007, but the reality has been that new share issues on the mainland will top US$100bn this year (25% of the world's total) while Hong Kong has pulled in just US$6bn so far.

Bizzarely, the mainland is said to have been buying shares in HKEx at the same time as leaning on major companies to list in Shanghai rather than in Hong Kong. Beijing, it seems, doesn't want Hong Kong to become too powerful; but at the same time it knows Hong Kong can't be kept down.

Chinese officials deny, meanwhile, that they have been putting money into Hong Kong Exchanges and Clearing (HKEx), which operates the territory's stock exchange, although Hong Kong insiders said there unmistakable signs that it was happening. They believe that newly-formed state investment company CIC, which has been given $200bn to play with by Beijing, will plough much of this money into Hong Kong assets.