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Mr Tsang also said Hong Kong had experienced uninterrupted economic growth in real Gross Domestic Product (GDP) over the past 35 years, and had stabilised onto a trend growth rate of about five per cent in real terms.
"Our inflation has slowed down to 6.1 per cent for the first eight months of this year. Our property market has fully recovered, with a healthy demand at the primary market, and our stock market has been one of the leading performers in 1996," he said.
"Our banking sector has had a bumper year and the Hong Kong dollar stands rock solid against a strong foreign exchange reserve and no public debt."
Turning to the political side, Mr Tsang was equally bullish.
"In the last few months, we have witnessed several major milestones in co- operation that would lead to a smoother transition through 1997," Mr Tsang said.
He quoted the agreement on the Court of Final Appeal and the smooth and constructive discussions on the 1997-98 budget as examples.
He added that protracted discussions over infrastructure development, such as the airport and the container ports had been resolved, so that the much needed expansion in communications infrastructure were continuing without delay.
"China has now clarified her monetary relations with Hong Kong post 1997, thus strengthening the interpretation and operation of the Basic Law and underlining the financial and fiscal autonomy of Hong Kong under the "one country, two systems" principle," he said.
"In my view, good sense and sensibilities from all sides have prevailed over rhetoric, and this is as it should be, in the continued development of the Hong Kong's economy, and in augmenting its position as a premier international financial centre.
"To sum up, Hong Kong's great strength is the entrepreneurship, innovation, resilience and flexibility of her people operating in an enlightened, stable and legal environment and on an unrivalled level playing field.
1997."
"There are great opportunities, as well as challenges in the years ahead through
The Governor of the People's Bank of China, Mr Dai Xianglong, also delivered a speech at the luncheon hosted by Mr Tsang.