Mr Leung will report to Tung Chi-hwa, the China-appointed chief executive.They are both businessmen, so it comes as no surprise when Mr Leung says the education system must ensure that the territory’s economy remains internationally competitive.

The education system has been criticised for failing to provide the kind of graduates Hong Kong businesses require as the territory changes from a manufacturing economy to a services hub. The standard of English is declining, students show little initiative and lack creativity.

While the economy was growing at breakneck speed and there was a labour shortage, employers had to make do with what they got. But the pressure to upgrade education has become acute. Without reform, many fear mainland Chinese professionals will simply move to Hong Kong to fill the gaps and run things their way.

The Hong Kong education system is not a bad one, according to Mr Leung, a director of Chase Manhattan bank in Hong Kong and former head of the colony’s University Grants Commission. He says his recommendations to Mr Tung will be made in July after consultation with 100 education experts.

Hong Kong performs well. It was in the top five in the Third International Maths and Science Study, behind Japan, South Korea and Singapore, but ahead of many western countries.

Schools must produce students who are outward looking, says Mr Leung, while acknowledging that children must be taught to think of themselves as Chinese. “We should clearly understand that we are Chinese. We are based in Hong Kong and our eyes are set on the world.”

He supports the revision of textbooks and Mr Tung’s call for more lessons in patriotism.

Language is still a major preoccupation. “For Hong Kong to maintain its competitiveness we need to ensure our students are biliterate and trilingual,” he says. Children will have to read and write Chinese and English, and speak and understand Cantonese, Mandarin and English. It is a tall order: first the decline in English will have to be arrested and then a shortage of Mandarin teachers must be met.

Despite the emphasis on English, the number of secondary schools teaching in the language will be halved next year. This will leave less than a quarter of the 400 secondary schools teaching in English. Of more than 800 primary schools in Hong Kong, fewer than 20 are still English-medium.

Mr Leung says the drive towards mother-tongue teaching will not be reversed, but the training of language teachers will be upgraded. Pilot tests with 2,000 teachers sitting English and Mandarin language exams have been set this year and a minimum level of proficiency will be introduced in 1999.

Although teachers have called the tests unfair, Mr Leung says: “If we are fair on the teachers we would be unfair on the community and the children who will be our future leaders.”

Mr Leung’s concerns about creativity, initiative and lifelong learning are similar to the rest of Asia. Taiwan and Singapore are already much further ahead. They have mapped out their reforms and are now putting them in place.

“We have to teach students how to learn rather than memorise textbooks because the textbook might be out of date in a few years,” says Mr Leung. “With new information being generated at a rapid pace and the half-life of old knowledge very short - 10 years or less, students have to study all their lives. They must learn how to learn.”

This will mean project work instead of rote-based learning. More crucially it will mean an end to two-shift schools where one set of children uses a classroom in the morning and another in the afternoon. Mr Tung is on record as saying that the two-shift system dramatically shortens the school day and makes an adequate education impossible.

The previous two governors of the colony promised to get rid of two-shift schools, but fulfilling the pledge requires a massive building programme and land is expensive. New schools are also needed to cope with an influx of mainland children (see story right).

The aims and dilemmas faced by the new administration are not that different from the old. But the desire to break from the past may quicken the pace of change. “I feel a great sense of urgency,” said Mr Leung. “Without changes within a few years Hong Kong will begin to slip down the international economic league.” And with China keen to show it can administer Hong Kong as well as the departing British, no one in Hong Kong or Beijing wants that to happen.