If you study Hong Kong's economic policies, you will find that there has been a consistent theme throughout the past 50 years, Chief Executive Donald Tsang says. From one Financial Secretary to another, we have never deviated from our long-cherished free-market philosophy.

In a written statement issued to the press following last week's Economic Summit, Mr Tsang refers to former Financial Secretary Sir Philip Haddon-Cave's description of Hong Kong's style of capitalism as "positive non-interventionism".

The description the Government has preferred to use in recent years is "big market, small government," he added, noting he had introduced this term in his first Policy Address as Chief Executive last year.

"There is general consensus in Hong Kong that the basic role of the government in the economy is to provide the framework for markets to operate effectively, and to act when there are obvious imperfections in the operation of the market mechanism," he said.

Quoting Sir Philip, who served as Financial Secretary from 1971 to 1981, Mr Tsang wrote: "As the economy grows and evolves, the way in which the mechanism operates also changes and the framework provided by the Government must also change if it is to remain appropriate."

The externally oriented nature of Hong Kong's economy dictates that we must adapt to global market forces, the Chief Executive noted.

"Our need to maintain a capitalist economy and free markets in trade and financial services is also enshrined in the Basic Law. However, our firm belief in market competition does not mean the Government does nothing or takes a passive role.

"In the face of rapid changes in the world and on the Mainland, we must take a proactive but at the same time pro-market approach and see how we could provide a platform and foster an environment that would best support economic development. This is what we had in mind when we organised the Economic Summit a week ago.

"Our 'big market, small government' policy purports to enhance Hong Kong's competitiveness and underscores the economic freedom that Hong Kong needs to sustain its prosperity. I am certain citizens in Hong Kong will endorse this policy," he concluded.

To see the full text of his statement, click here.