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HONG KONG: ASIA'S WORLD CITY

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Fourthly, we will explore with the Mainland authorities in Guangdong, and elsewhere, ways to facilitate arrangements for Mainland tourists to visit Hong Kong. These initiatives are particularly important in light of the 2005 opening of Hong Kong Disneyland.

Fifthly, we will continue to upgrade and streamline arrangements for processing the passage of people and goods at the boundary with Shenzhen. This is essential to economic expansion on both sides of that boundary. With over 100 million people passing through each year, this is one of the busiest crossings in the world.

Asia's World City: Future Prospects

But it is not just our growing links with the Pearl River Delta that are enhancing Hong Kong's reputation as the best place in Asia for establishing a business. A recent independent two-year study of multinational firms in East Asia and Australia carried out by Professor Michael Enright of the University of Hong Kong and Edith Scott, an international consultant, has found that Hong Kong is, and will remain, the most important base for regional headquarters in the Asia-Pacific region.

In part, the study indicated that Hong Kong's dominant position stems from its political and legal stability, proximity to major markets (Hong Kong is within five. hours flying time of half the world's population), excellent infrastructure, its dense network of financial and professional service firms and the quality of its local management. With this combination of factors, it is not surprising that over 60 per cent of the FORTUNE Global 500 companies have a presence in Hong Kong and that the number of regional headquarters and offices of multinational corporations in Hong Kong increased by 20 per cent.

Hong Kong has returned to China at a time when the country is developing rapidly and the international standing of the nation is rising. This enhances both our opportunities and our national pride. In the same way as the coastal areas have prospered in the last 20 years, the hope is that the opening up of the Western Region will provide new opportunities for long term development. The purchasing power of the Mainland consumer is rising and the Chinese market is huge and growing. Being positioned at the heart of Asia, Hong Kong is well placed to help the world capitalise on these opportunities.

To ensure Hong Kong's continued success, it is essential that we maintain and strengthen our links with our major international trading partners and explore new developing markets. We must also preserve the key factors which put Hong Kong ahead of other economies in the region the institutions which are underpinned by the Basic Law, our well established legal and judicial systems, our international outlook and the level playing field. We will then be able to enhance our role as a bridge between the Mainland and our major trading partners around the world. Hong Kong's links with the Mainland and those with our international partners are complementary.

In addition to the emphasis we place on economy and business, we will continue to take steps to raise the quality of life for people throughout our community. On the environmental front, we have adopted a full range of initiatives to improve our air quality. Strategies for dealing with solid waste and sewage treatment are being formulated. On the cultural front, we are designing a world-class cultural complex in

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