"Kung Hei Fat Choi!" As I think last month's 7th Annual Hong Kong Business Summit showed, the Hong Kong economy performed creditably in the past year and is set to build on this base as we enter the new year. There may still be some bumps in the road ahead, but they should not be so bad as to impede our further progress in the coming year.

That said, you may have noticed that there were some comments from important people in final weeks of the old year that could give us pause for thought. First up, the Premier, Zhu Rongji, noted, while visiting Singapore, that Hong Kong people were unhappy that they had not had a wage rise in two years and he would take this into account in considering the wage situation on the Mainland itself.

A few weeks later, Singapore Senior Minister Lee Kwan Yew, while on a visit to Hong Kong, asked rhetorically how it could be that Hong Kong people were allegedly less happy now that they have control over their own destiny than they were under British colonial rule. This was really less negative than it sounded as he went on to urge us all grasp the opportunity we have to improve things.

As an open, internationally orientated society, Hong Kong generally welcomes comments from wherever they might come, especially if there is something we can learn from what is said, even if we may take issue with some of remarks that are made and the premise on which they are based.

But to take Mr Lee's remarks first. Singapore's senior minister, one of Asia's most respected leaders, may well be right in suggesting that some Hong Kong people have not been as happy in the period since the hand over from British rule in mid-1997. This, however, has little or nothing to do with the return of Hong Kong sovereignty to China.

If Hong Kong people, as a group, are less happy now than they were three or four years ago Ð and I would suggest this in itself could be a matter for debate Ð it has a lot more to do with economics than politics. The economic situation we have confronted in that time as a result of the East Asian financial crisis has been one of the most difficult in the modern era.

As a result of the financial crisis, the Hong Kong SAR experienced its first year of negative economic growth since records have been kept. The share market slumped dramatically and billions of dollars were wiped off residential and commercial property values. Unemployment rose, tourism numbers dropped off, retail sales fell and, yes, wage restraint was instituted.

At the same time, the SAR had to cope with economic restructuring in the form of so-called "new economy" (adopting the new tools of information technology and e-commerce). We also had to come to grips with our new political standing, and two successful elections in the past three years are ample evidence of how well we have done that.

With such a background, especially the economic background of falling asset values and restrained income levels, it would hardly be surprising if some people were a little unhappy. It is a natural reaction to adverse economic circumstances. But to suggest Hong Kong people are broadly unhappy with their lot is perhaps going a bit far.

What is clear is that the worst of the economic downturn is now behind us. The economy grew strongly in the past year and this year will again post solid growth. As this economic improvement continues so too will the "feel good factor" throughout the whole community. But it does take time.

And that brings me to the premier's remarks on the wage situation. With the downturn in the economy as a result of the Asian financial crisis and the consequent impact on company sales and profits, there had to be inevitable adjustments across-the-board, including wage restraint by employees. Unhappy though they might be, most employees seem to understand this.

This period of enforced restraint is now drawing to a close, however, with the Chamber and the Employers' Federation recommending a resumption of wage rises this year, suggesting increases of up to 2 per cent. We also urged members to take into account the performance and productivity of employees in determining wage rises and bonus payments.

Our overall emphasis now in the SAR must be on sustaining the recovery we have seen in the economy in the past 18 months. Ultimately this will bring benefits to all. Having experienced, and shared, the pain of a recession which was not of our making, we can now look forward to the future with far greater confidence.