Events in recent months have clearly unsettled the community and led to some deterioration in public confidence in the SAR. It is hoped this impact will be short lived. The positive aspect of these events is that they have brought directly into the public spotlight the apparent concerns of some SAR residents. The negative side is that they appear to have obscured the very real achievements of the SAR and SAR Administration in the years since the return of sovereignty.

The post-handover period was always going to be a challenging one for the new SAR Administration, but no one could have foreseen just how demanding it would turn out to be. The administration deserves recognition for its positive response to the challenges faced; so, too, do the people of Hong Kong. To ignore the positives and focus only on problems, real or perceived, is to denigrate the achievements of both.

Dealing with the downturn in the local economy brought on by the East Asian financial crisis of 1997 and 1998 was a formidable challenge in its own right, requiring some difficult and sometimes controversial decisions by the administration. At the same time, the people of Hong Kong had to cope with declines in asset prices and economic output, higher unemployment and strict wage restraint.

Yet look at what has been achieved in coping with the impact of the financial crisis. After a harsh but relatively brief downturn in 1998 and the opening months of 1999, the local economy has recovered strongly. So, too, has the share market. Unemployment, while still high, has been reduced and both asset and consumer price deflation have eased. Tourists have returned in record numbers. And Hong Kong is becoming an Asian centre for information technology and electronic commerce. There is still much to do, but at the same time there is, at least, a new economic confidence in the community.

On an even more positive note, it has also created the Cyberport and launched the SAR into the new age of IT and e-commerce. It has re-organised the stock and futures markets and backed the creation of the Growth Enterprise Market (GEM). It has brought Disney to Hong Kong and set out to secure the 2006 Asian Games for the SAR. The administration is not, therefore, one that sits back and waits for things to happen; it has taken action.

Where community concerns have arisen on specific issues it has attempted to address them in a timely fashion with targeted and considered reforms, as in the measures to improve the environment, upgrade the education system and institute changes in the Civil Service. It has also set long-term goals for its reforms, such as making the SAR a world-class city in every respect.

An appendix to the submission covers a broad range of other issues important to business. These include the further development of the SAR as a financial, logistics and digital hub, creating new employment opportunities, Civil Service and tax reform, business costs, deregulation and privatisation, SMEs and tourism development.