"It is this unique combination of qualities in Hong Kong which make Hong Kong the success story we have today."
The Financial Secretary said Hong Kong would be the premier international financial centre for China.
"As the natural gateway to China and China's window to the outside world, Hong Kong has been the major capital raising centre for China, our largest trading partners," Mr Tsang said.
He said figures released by China's Ministry of Foreign Trade and Economic Co-operation showed that 56 per cent, or US$20 billion, of the total utilised foreign capital in China was Hong Kong's investment in and loans to China's non-banking institutions.
"In Hong Kong we have complete freedom of movement of capital. The Hong Kong dollar is freely convertible. There is no foreign exchange control whatsoever.
"We offer the whole range of financial services in Hong Kong, including the most advanced and sophisticated financial products.
"Hong Kong's capital and investment in China therefore contributes significantly to the economic development of China, especially the southern region," Mr Tsang said.
He said Hong Kong capital was particularly important for China's manufacturing industries, land and property, and infrastructure development.
It also facilitates the sourcing of foreign raw materials, equipment and technology for China and also marketing and exporting of Chinese products to other countries.
"In partnership with Hong Kong, China's economy hence becomes more open and closely linked to the rest of the world," he said.
He told the businessmen and professional attending the luncheon that a high degree of autonomy for the Hong Kong Special Administrative Region was guaranteed by the Joint Declaration and the Basic Law.
"It will be business as usual in Hong Kong in and after 1997," he said.