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Mr Tsang said the two sides were able to reach agreement for two reasons: a shared commitment to a smooth and successful transition and a shared understanding that the Basic Law's provisions should guide the drawing up of this year's Budget.
He said an important part was played by the Basic Law.
"By my count, 44 per cent of the Basic Law's provisions are designed to lay down the economic rules of the Special Administrative Region and to describe how Hong Kong's separate economic system will continue to flourish," he said.
"The most important of these is Article 5. It states: The socialist system and policies shall not be practised in the Hong Kong Special Administrative Region, and the previous capitalist system and way of life shall remain unchanged for 50 years.
"This is a clear pledge that Hong Kong will continue to enjoy free, open and competitive markets which are not controlled by state planning or state direction."
Mr Tsang pointed out three of Basic Law's economic features:
its commitment to Hong Kong's role as an international business centre;
its guarantee of financial prudence; and
its promise of economic autonomy.
He said the spirit of the separate economic system which the Basic Law was pledged to safeguard Hong Kong's "four pillars of wisdom": the rule of law, a level playing field, corruption-free government and the free flow of information.
"To ensure the rule of law, the community must live by laws that are public, laws that apply to all and are enforced by courts which are fair, open to all and independent.
"A level playing field is crucial for competitive markets and efficient business. It means that contracts are awarded fairly and equitably. No favours. No patronage.
"A corruption-free government is essential to preserve the rule of law and a level playing field. Without a total commitment to integrity, the civil service will not command the respect of the community or win its co-operation.