Business best: Guangdong Governor Huang Huahua and Chief Executive Tung Chee Hwa meet Steve Forbes, President, CEO and Editor-in-Chief of Forbes.

Hong Kong's future is hinged on the rapid and orderly development of China, the fastest-growing large economy in the world, Chief Executive Tung Chee Hwa says.

Speaking tonight at the fourth annual Forbes Global CEO Conference Gala Dinner, which is being held in Hong Kong this year, Mr Tung said it is clear the city's future depends on securing greater access to the Mainland market for our businesses and professionals, and on building on our expertise in servicing the Mainland's trade and investment needs.

"It was also clear that Hong Kong's future depended on ensuring the two-way free flow of goods, people and, when the time is ripe, capital flow between Hong Kong and the Mainland," he said.

Confidence regained

Mr Tung said with the end of SARS, and the global economic recovery and the support of the Central Government, confidence has been returning and Hong Kong's economy is recovering quickly.

"We posted 7% GDP growth in the first quarter, and 12.1% growth in the second. Property prices have stabilised, unemployment has been slowly declining, and deflation is disappearing," he said.

"The prospect for Hong Kong, at least in the short term, despite the beginning of a new interest-rate cycle, high oil prices and geo-political uncertainties, is encouraging."

Time to bolster CEPA

To sustain our economic recovery, he said Hong Kong needs to deepen and broaden the CEPA agreement.

"We will of course do this incrementally. Last month, we reached agreement with the Central Government on CEPA II, which extends greater market access to considerably more Hong Kong products and services.

"We must also continue fostering greater co-operation with Guangdong Province and the Pan-PRD region which ultimately will create an economic region of 400 million people, with GDP equal to one-third of China's total GDP. Furthermore, we will continue to pursue new initiatives to ensure Hong Kong's role as an offshore RBM centre."

Over 350 top international business executives and government leaders are attending the conference, discussing current events, the global economy and the most important issues facing businesses under the theme 'The Connected World'. This is the second time the conference - one of the most prestigious global business events - is being held in Hong Kong.