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Mrs Chan said Hong Kong in the 21st century would share China's destiny.
"It is a matter of pride for us that China is now taking its place in the economic as well as the political currents of the world," she said.
Noting the growing wealth in China and the introduction of competitive clections at village level in certain provinces, Mrs Chan saw these as signs of a China that was willing to change and change for the better.
"It is on this foundation that I think Hong Kong can confidently build-its future," Mrs Chan stated.
Turning to the international arena, Mrs Chan expected Hong Kong's trading partners to maintain an interest in the future of Hong Kong.
While addressing overseas audience' concerns about freedom of speech and press, human rights and the future of the Legislative Council, Mrs Chan said there was more cause for optimism than pessimism about Hong Kong's future after 1997.
"Freedom of speech, of the press and of fundamental human rights are all protected in the Joint Declaration and the Basic Law. However, there is now a genuine concern over whether these will be diluted as a result of proposals to amend the Bill of Rights Ordinance and other legislation. We will need to address these concerns if we are to maintain local and international confidence in Hong Kong," she said.
Commenting on the recent establishment of the Provisional Legislature, Mrs Chan hoped the existence of this set-up would be as short as possible and that the elections to be held for the legislative assembly to take over from the provisional body would be demonstrably free and fair.
Projecting into the future, Mrs Chan said she shared the vision of the Chief Executive (Designate) and she saw the role of the Chief Executive being to cultivate the trust and confidence of Chinese leaders in giving him a free hand to run Hong Kong in ways that do not undermine public confidence in his ability and willingness to defend Hong Kong's autonomy and the "one country, two systems" concept.
"At the same time, he has to ensure that the economy continues to grow so that we have the means to satisfy public expectations for more and better social services," Mrs Chan said.
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