Fiscal friendliness: Financial Secretary John Tsang addresses the forum on economic co-operation and development between Hong Kong, the Mainland and Taiwan.

Hong Kong, the Mainland and Taiwan should develop closer economic ties, strengthening their ability to handle the global financial turmoil and turn challenges into opportunities, Financial Secretary John Tsang says.

Attending an economic forum today Mr Tsang said Hong Kong's status will not be affected by the implementation of the Three Links which will bring new momentum and opportunities to economic development.

"Such development will bring better cost-effectiveness, more efficient resource allocation and better development of our advantages," Mr Tsang said.

Noting improving cross-strait economic and trade development, Mr Tsang said the value of merchandise trade using Hong Kong as the key interchange port between the Mainland and Taiwan recorded annual average growth of 15% from 2002 to 2007.

"This represented a share growth of 6.5% in Hong Kong's overall foreign trade last year, compared with 5.6% in 2002," he said.