Our trading partners' general economic improvement helps underpin our economic recovery, Financial Secretary Henry Tang says, adding that he is cautiously optimistic that Hong Kong will see growth higher than the predicted 3.5% average increase in the next five years.

Speaking on a radio programme this morning, Mr Tang said the rebound was most evident in the tourism-related sectors, including the catering and retail industries. The recovery has helped reduce the deficit - although it still stood above $70 billion at the end of November.

Mr Tang said unemployment is a major challenge. As Hong Kong is changing into a knowledge-based economy, it is not easy for those less educated to find jobs.

Mr Tang said he has not ruled out any options regarding taxes.

"I feel that in the past year, we have experienced and overcome many challenges, so it may not be a bad idea to give the public an opportunity to take a rest, so to speak, from new taxes."

However, in view of our fiscal situation, some of these choices may be inevitable, he added.

Website aims to garner views regarding budget

In response to a question about the January 1 rally, Mr Tang said the Government would listen closely to views from all sectors on the pace of constitutional development and ways of improving the economy.

To help him to prepare budget and assess the public's expectations, he said a website - www.budget.gov.hk - has been set up to collect the public's views.