There are signs that Hong Kong's economy is picking up, sentiment is improving and our GDP is on the rebound, Chief Executive Tung Chee Hwa said, adding that the CEPA and individual visit scheme have injected more confidence into the community.

Speaking in a question-and-answer session in the Legislative Council, Mr Tung said the Closer Economic Partnership Arrangement between Hong Kong and the Mainland has ushered in unprecedented opportunities.

He said the individual visit scheme has helped improve local sentiment. It has not had an adverse effect on our law-and-order situation since most of visitors from the Mainland are law abiding, he added.

The Government will spare no effort to tackle the problem of illegal workers, he stressed.

Overturning negative-equity situation key

It is important that the property market grows steadily, Mr Tung said, adding that nothing is more important than economic growth and solving the negative-equity problem.

The Government learned a good lesson after the July 1 rally, he said. Many factors had led to the public's dissatisfaction, including inadequate communication with the community.

To promote policies smoothly, it is crucial to listen to many views. He reminded LegCo members that the Government must serve with the community in mind.

Vow to improve governance - and remain in office

He said he will do his best to improve his governance and he has every confidence that he will do better in future.

In response to some legislators' requests to speed up the constitutional reform process, Mr Tung said the Constitutional Affairs Bureau is now making preparations to start a consultation next year, and a timetable will be ready by year's end.

The democratic process must follow provisions in the Basic Law, he added.

Mr Tung pledged that he will stay in office until his tenure ends.