I have just started consultations on my first policy address. The point of these consultations is to try to map out a policy blueprint that will serve the best, long-term interests of Hong Kong. All will be revealed on October 12.

We are indeed fortunate to have such a questioning press corps in Hong Kong, and such a lively media scene. About 50 newspapers and 800 periodicals are printed daily or weekly in Hong Kong. We're home to about 100 international media organisations.

The Asian Wall Street Journal has been in Hong Kong for almost 30 years. The Financial Times marked the opening of its Asian headquarters two years ago by wrapping the IFC tower in a huge banner. The International Herald Tribune has been beefing up its regional operations in Hong Kong this year, which has led to a noticeable enhancement of Asian coverage in the paper.

AFP, Time, Newsweek, CNN - among others - all cover the region from Hong Kong. Certainly, this is good news for Hong Kong - even if the story is not about Hong Kong, at least we get the dateline.  

Press freedom one of our greatest assets

The free flow of news and information is one of the foundations of our success, and one of our greatest assets as Asia's world city. It is an asset that we cherish, and will protect.

Thomas Jefferson once said that if he had to decide whether America should have a government without newspapers, or newspapers without a government, he would not hesitate for a moment to prefer newspapers. He did not have to make that choice. Nor do we. We have a government here in Hong Kong that is determined to protect the free flow of information - this I can assure you.                            

Today, you have asked me to speak about Hong Kong's prosperity, stability and relations with the Mainland. This I will do, but perhaps from a slightly different angle than you may expect - not as the Chief Executive extolling Hong Kong's many virtues, of which I am sure you are all familiar, but as a daily observer of the international coverage on Hong Kong. Coverage written by people in this room - people whose reports and commentaries help shape international perceptions about Hong Kong.    

International outlook a defining characteristic

A defining characteristic of Hong Kong is undoubtedly our international outlook and engagement with the world. The overseas media organisations here are an integral part of that character.

So, too, are the thousands of international companies, the international chambers of commerce, the consulates and foreign missions, the international schools, the huge variety of international cuisinex, world-famous brand names too many to mention, and of course the large expatriate community.

We share many of the same values - freedom, fairness, respect and tolerance. We believe in a system of clearly defined laws and rules, where everyone has redress to the courts. Our hosting of the World Trade Organisation meeting in December is an example of our staunch support for open trade in global markets, and our strong desire to support and promote the multilateral trading system.

We live in a cheek-by-jowl environment that elsewhere in the world could give rise to social tensions and dislocation. Yet, for example, racially motivated crimes or religious intolerance are virtually unheard-of in our society. Another of our great strengths is that we are a very safe city. What is the glue that keeps this place together?

Could it be that the economic model we have embraced and champion - the economic freedoms that people in Hong Kong enjoy - might also serve as a model for tolerance, respect and inclusiveness elsewhere on the planet? I know that some cynics may scoff at such lofty talk. But it is a question worth pondering, especially at a time when terror and hatred hit the headlines almost every day.

HK proud of its Chinese heritage  

We are also, undoubtedly, a community rooted deeply in Chinese culture and history. We have always been proud of our Chinese heritage, and always will be. We are a focal point of economic endeavour and cultural activity for the Chinese diaspora. We are the city where overseas-born Chinese feel at home right away - a city where it is as natural to be Chinese as it is to be a citizen of the US, UK, Australia or Canada, or wherever else you may have been born, or grew up.

We are a magnet for Chinese enterprises wishing to tap international financial markets, or to sell their products around the world. We are a deep resource of international best practice on which our national government can draw as our country continues along the path of opening up and reform.

We are a melting pot of Chinese culture as much as we are a melting pot of international culture. We are, as some people have remarked, a world in a city, as much as we are Asia's world city. All of these ingredients shape the prosperity and stability of this city. And they also shape perceptions about Hong Kong on the global stage.

Gov't pays close attention to news reports

As practitioners of the journalistic craft, many here know that perception and reality are closely linked. For most readers of newspapers and magazines, the perception is the reality. 

As a government, we pay close attention to reportage on Hong Kong, both locally and internationally. Every morning we scan the news clippings. We discuss the way in which the papers and news radio shows report and comment on topical issues. Every day we gain a fresh insight into perceptions about Hong Kong.  

Local news coverage has an enormous impact on the way in which our residents view their government, and its effectiveness. More often than not, there are brickbats rather than bouquets. But, this is the nature of the relationship between any government and the Fourth Estate.

Criticism, constructive comments heeded

As a political leader, taking the criticism, along with the odd compliment, is part and parcel of my job. A politician who complains about the media is like a sailor who complains about the sea. If you can't stand the sting of salt water on your face, you should not be on deck in the first place.

As a government, we must take criticisms and constructive comments seriously. That is because they are the building blocks of public perceptions about our governance. I am not saying that we should base our government entirely on public opinion; but we must take it on board when formulating our policies. And that is what we are doing.    

The foreign media usually take a more holistic view. They report on Hong Kong in a global context. They are interested in how our policies and actions impact on what makes us a unique city in Asia, and China. There is close scrutiny of our economic policies and performance. There is close scrutiny of policies that might impact on the rights and freedoms of our residents - among them, of course, is the freedom of the press.

Correspondents keep gov't on its toes

Correspondents keep a close watch on the integrity of our legal system. They take a keen interest in our political development. They look for any blurring of the lines between 'One Country' and 'Two Systems'. And, in recent years, they have reminded us that if we want to position ourselves as Asia's world city, then we have to earn the title. We're listening.       

This year, there has been a distinct pick-up in overseas coverage on Hong Kong. We have tracked more than 5,700 stories concerning Hong Kong since the beginning of the year. We are counting them. For the same period last year, the figure was 4,500 - so, that's a 25% jump. These are just the stories that are flagged by our network of 10 Economic & Trade Offices overseas, or published by the international press based here. There are probably many more we don't see.

By our reckoning, most coverage this year - in fact an overwhelming majority - is either balanced and neutral, or positive. Many positive stories relate to our rebounding economic fortunes, or reflect the upsurge in interest in Hong Kong. BusinessWeek recently ran a cover story with the banner headline "Hong Kong: It's Back!". The tone was decidedly upbeat. Please keep it that way.

Tourism sector draws global interest

There has been sustained interest in our tourism sector. Time Asia ran a special eight-page report on Hong Kong Disneyland. The Far Eastern Economic Review carried an article that described Hong Kong as 'China's Quiet Powerhouse'.

This echoes a theme we often promote on our speaking engagements overseas, and that is our role as the best two-way platform to do business in China, especially the Pearl River Delta. Stories on our airport are usually positive. The same applies to coverage of our movie industry, which often highlights the creativity and distinctive style of our film makers. You can't buy that kind of publicity to endorse and underline our prosperity and stability. It just simply happened.  

A small percentage of the international stories so far this year - we estimate less than 5% - we would rate negative. Many of those relate to the key areas of concern that I mentioned earlier. If there is a factual error in any of the reports, or if we feel that the perception is not right, we will respond. We will restate our point of view and let the readers make up their own minds for themselves.

Post-handover Hong Kong still 'a story'

Overseas perceptions about Hong Kong are shaped by the amount of coverage, as well as the content. I believe that, in the run-up to 1997, there was a feeling that, after the handover, Hong Kong would no longer be a story, or would lose its relevance. As it happened, plenty of stories kept us in the news - bird flu, Asian financial crisis, stock- market intervention - you had forgotten that, recession, political development, protest marches, SARS, to name a few of those that attracted considerable attention.

But, regardless of how these stories were viewed from afar at the time, the point I want to make here is that Hong Kong did remain a story, whether by accident or design. I believe we always will be a story. The extent of coverage itself sends a message about Hong Kong - it tells the world that this is a city worth watching. That this is a city with a special place in the world. That this is a city with a future.

Now, I would like to make a few observations based not on what I read in the newspaper or overseas media, but what I'm asked about when I travel overseas. 

First of all, I have to say, wherever we go, there is a tremendous depth of goodwill towards Hong Kong. Whether I am talking to heads of state, or business groups, or think-tanks, there is a genuine interest in how we are doing, economically, politically and socially.

HK-Mainland interplay of great interest

When I talk to these different audiences overseas they all want to know how Hong Kong fits into the equation of an emerging China. They want background and context. They want to understand more fully how 'One Country, Two Systems' is being implemented. They want a reassurance that we have retained all of our unique advantages - our common law system, our clean government, a level playing field, and a low tax system. They're all here. And they want to learn more about the interplay between the Hong Kong SAR Government and the Central Government. 

Another topic that nearly always comes up is the 'S' word. A few years ago it was Singapore, now it is Shanghai. There is a perception overseas that Hong Kong risks being overtaken by this rising star of China's economic miracle. I always enjoy answering this one. It provides me with an opportunity to emphasise our uniqueness, which also highlights the realities of 'One Country, Two Systems' at work.

I mention the advantages that we enjoy, such as our tried and trusted legal system, a fully convertible currency, the completely free flow of capital, legally protected property rights, freedom of information, ease of communication, connectivity to the rest of the world, and a worldly-wise, broad and deep pool of professional talent.

HK offers unique advantages

We mirror this line of argument whenever anyone asks us why they need Hong Kong rather than go directly into the Mainland market. I point out that a lot of the impressive developments are happening in Shanghai - indeed, in all the Mainland's biggest cities. But they have been funded by Hong Kong business people.

I also stress the point that we're talking about two completely different economies, in different parts of the country, playing different roles, serving different hinterlands and both with plenty of scope for growth. It's not simply a question of Shanghai's gain, at Hong Kong's expense or the other way around.

There is always tremendous interest in the relationship between the Hong Kong SAR Government and the Central Government. It is absolutely clear to most people I speak with that our ongoing success as Asia's world city depends on playing to our strengths, and maintaining an open, frank, strong and deep relationship with the Central Government.

Central gov't has genuine concern for HK

What I tell them is that, in this regard, there is no divergence of opinion from the Central Government. Our national leaders have a deep-felt and genuine concern for our well being and prosperity. They want us to succeed. They know we are different, with special characteristics found nowhere else in the Mainland.

When the Central Government embarks upon a review or reform of its systems - for example, its legal system or its financial systems - Hong Kong is often the first place they look to. We are a ready-made reservoir of international best practice. We are now part of the same family again, even though we may have grown up in different neighbourhoods.

Before 1997, our potential was hampered by a lack of direct communication with the Mainland. In the first few years after Reunification this process was rather slow as both sides came to grips with the new dynamics of our relationship. However, in the past few years, there has been a much-needed acceleration and broadening of contacts.

Enhanced links maximise HK's potential

This has not been at the expense of 'two systems'. Rather, all these enhanced links are designed to maximise the potential of the two systems within one country, for mutual advantage. It is a natural progression that is gathering pace with such initiatives as CEPA, Pan-Pearl River Delta co-operation and much closer links with Guangdong Province.

Hong Kong's prosperity, stability and relations with the Mainland all hinge on the successful implementation of 'One Country, Two Systems'. This is not a subject that is often written about per se. But, the net effect of international reporting on Hong Kong does leave a lasting impression about how well the concept is being implemented.

When I look at all the overseas coverage on Hong Kong, there is no doubt that the world is watching to see how this story unfolds. It is a fascinating story that correspondents in Hong Kong contribute to every time they sit down at their laptops to tap out an article. And it's a story that I believe will only get better.