Hong Kong experienced a number of dramatic political incidents last month with the July 1 demonstration, delayed reading of Article 23, and the resignations of the Financial Secretary and the Secretary for Security. Fortunately, the events did not upset social stability or the economy.

Over the past few years, Hong Kong's economy has been in a haze, particularly the property sector. Issues such as unemployment and negative equity have added to Hong Kong residents' grievances. These came to a climax on July 1 when half of a million people took to the streets to show not only their objection to Article 23, but also their frustration with the governance of the SAR Government.

Regardless of the cause of the demonstration, it shows that public discontent is rising. Overseas observers, seeing that the demonstration was orderly, believe that it will not undermine foreign enterprises and tourists' confidence in Hong Kong, or the local investment climate. However, the government needs to urgently address the public's concerns to avoid agitating their grievances, and get Hong Kong's economy back on a sound footing.

Maintaining social stability is crucial in any economy. Social unrest weakens business environments as foreign investors and tourists may not be as keen to visit and local funds could be moved out. With the economy still recovering from SARS, Hong Kong needs to focus on getting business back on track.

Taking into account the July 1 demonstration, the Liberal Party and I felt that the administration needed to postpone legislation of Article 23 to give the public more time to understand and debate the issue. I resigned from the Executive Council in order to uphold my position on this crucial issue. As Executive Council members have to adhere to the collective responsibility principle by following decisions made during their meetings, I chose to tender my resignation.

Looking back, I strongly believe that delaying the enactment of Article 23 is the right move. If the government had resumed the second reading of the Bill on July 9, it would have intensified public anger and citizens surrounding the Legislative Council could well have vented their frustration.

The July 1 demonstration has put Hong Kong in the international spotlight. If any serious and large-scale clash followed in Hong Kong, overseas observers might think that the government was ignoring the public's views with its power. If so, Hong Kong's international image, which has been built upon years of hard work, would be destroyed and the Central Government's sincerity in implementing the "One Country Two Systems" would start to be doubted.

Responding to citizens' expectations, the Chief Executive, Tung Chee-hwa, announced a series of initiatives. The initiatives include: putting forward the bill for further public consultation, withdrawing the legislation schedule, strengthening communication with different sectors of the community and opening channels of discussion on political issues. I agree with these proposals and believe that they are the first steps towards resolving the conflict between the government and the general public. If these initiatives prove effective, they may ease public dissension and enable the whole community focus on boosting the economy.

Mr Tung's response showed that he understands that the public expects government to boost the weak economy, in addition to their concerns about legislation of Article 23 and communication with the government. During Mr Tung's duty-report trip to Beijing, the central leadership promised to strongly support Hong Kong's economic development and accelerate the implementation of various items listed in the Closer Economic Partnership Arrangement (CEPA). I welcome this move and hope that Hong Kong can benefit from the agreement and revitalize its economy.

CEPA aside, I think that the government also needs to propose new initiatives to rescue the property market. The property slump has badly affected the economy and is one of the public's main grievances. Although the Secretary for Housing, Planning and Lands unveiled a nine-point package last year to help the market, property prices continue to fall and citizens' assets continue to evaporate, which means that the "rescue" steps have not been effective.

I hope that the government will launch a new set of measures soon with a view to realizing the Chief Executive's commitment of addressing the concerns and meet the aspirations of the people. Such measures may include continuing suspension of land sales, taking back land scheduled for residential development projects of the two railway corporations and abolishing restrictions on construction periods.