These are uncertain times for the global economy. Fortunately, Hong Kong has been spared the worst effects of the fallout from the sub-prime lending problem in the US. Our banking system remains healthy and the financial-services sector is a strong pillar of our economy.

The economic prospects for Asia are good. The region has bounced back strongly from the Asian financial crisis that struck a decade ago.

As for Hong Kong, our economy expanded 6.3% last year, against an average growth of 7.2% in the last four years. We have forecast GDP growth of between 4% and 5% for the whole of this year. Although that would be a little slower than in recent times, it would still be pretty good for us.

What we are aiming for is economic development that is sustainable, and that benefits the entire Hong Kong community. Achieving this aim depends, in no small measure, on our ability to continue providing a reliable, cost-effective and business-friendly platform for trade to and from the Mainland of China.

Since the establishment of the Hong Kong Special Administrative Region 11 years ago, the city has become a much closer partner in the Mainland's reform and opening up process, which, incidentally, is in its 30th anniversary this year.

We already have considerable experience in doing business with our neighbouring provinces across the boundary and we have the world-class soft and hard infrastructure to facilitate trade. We share the same culture and language as our counterparts on the Mainland and we know what it takes to succeed in China.

Today, more than 6,400 overseas and Mainland companies have a presence in Hong Kong. That includes roughly 1,650 firms of EU origin. There is plenty of room for more companies to join them and we will continue to work hard to provide the best business environment.

Our ranking as the world's freest economy for 14 years in a row by the US-based Heritage Foundation is a good reflection of the government's belief in open markets and using a soft touch when it comes to regulating business.

Take our low and simple tax system as an example. It is among the most important issues for people setting up a business in Hong Kong. From the start of this fiscal year on April 1st, we lowered profits tax by one percentage point to 16.5%. Salaries tax was also reduced by one percentage point to 15%.

We have no GST, no VAT, no capital-gains tax and only income sourced in Hong Kong is taxable. Further, we have no inheritance tax, meaning you are able to keep what you earn even after you check in with God.

I should also mention that we have recently reduced duty on wine and beer to zero. Popular as the decision was, it was about more than making our favourite tipples a little more affordable. It was about seeing an opening to develop Hong Kong into a regional hub for wine-related business activities, such as fairs and exhibitions, distribution, storage and transportation. It was about creating jobs and wealth.

When we identify an opportunity we act on it. We also provide a safe and stable environment for business. The rule of law is underpinned by an independent judiciary, we continue to follow the common law legal system, our civil service is clean and efficient, we have a level playing field for business and our Independent Commission Against Corruption is one of the most effective anti-corruption agencies in the world.

We maintain our own stable and freely convertible currency, which has been pegged to the US dollar since 1983. This exchange-rate link has served us well through the years and will continue to do so.

Since reunification with the Mainland of China, Hong Kong people have been running Hong Kong, with a high degree of autonomy. This is an important element of the "One country, two systems" formula for our reunification. Our constitutional document, the Basic Law, guarantees that our way of life and capitalist system shall remain unchanged.

As enshrined in the Basic Law, we now have a clear timetable, as confirmed by the Standing Committee of the National People's Congress in December 2007, for attaining universal suffrage: that for the Chief Executive is 2017 and that for the Legislative Council is 2020.

In the meantime, we will strive to arrive at a consensus on the electoral models to roll forward democracy in 2012 and to pave the way forward for universal suffrage to be attained in 2017 and 2020. That is a pretty fast pace considering that we only introduced direct elections for limited seats to the Legislative Council in 1991.

I will turn now to the "One country", aspect of the "One country, two wystems" formula.

In recent years we have seen a significant deepening and broadening of our relationship with our sovereign power. There can be no bigger or better example of our strong integration within our nation than the Beijing Olympics.

As a co-host city for the 2008 Olympic Games, we have been given a huge responsibility in helping to ensure the success of the Beijing Olympics. Last week, we saw the successful relay of the Olympic Torch. It was smooth, orderly and in an atmosphere of carnival.

In a little over three months from now, Hong Kong will be staging the Olympic Equestrian Events of the Summer Games. It is a once-in-a-lifetime opportunity for Hong Kong to play such an important role at an Olympics. Personally overseeing the organising work for the events, I am confident we will do a good job. We will do just as well for the Paralympic event, as we are committed to place equal importance on Olympics and Paralympics.

Hong Kong has long served as a gateway to China for international trade. When it comes to trade, physical connectivity matters. We are pushing ahead major projects to improve cross-boundary connections and accessibility to areas in the dynamic Pearl River Delta region, which has always been described as the "factory of the world".

This year alone we expect to spend 1.8 billion Euros on infrastructure projects. Many of these projects, when they come on line, will make it more efficient, reliable and cost effective to do business on the Mainland, and for Mainland products to reach their destinations around the world.

Last month, the Guangzhou-Shenzhen-Hong Kong Express Rail Link was given the go-ahead. The 26-kilometre Hong Kong section is expected to take between six and seven years to build costing some 3.2 billion Euros. When completed it will join up with the high-speed national rail network and halve the travelling time between Hong Kong and Guangzhou to 48 minutes. A rail journey to Shanghai will take eight hours instead of the current 20 hours, and it will take just 10 hours to get to Beijing by train. This will radically enhance the Hong Kong-Guangdong relationship. Guangdong will be our metropolitan area.

The biggest project of all, the Hong Kong-Zhuhai-Macau Bridge, is also making good progress in the preparation phase. We have completed a feasibility study and recently the three governments involved agreed on financial arrangements. The bridge will span some 29 kilometres. It is important because it will help to open up the less accessible western parts of the Pearl River Delta.

As well as strengthening our physical cross-boundary connectivity, we are also streamlining procedures and breaking down barriers to trade in our corner of the world.

Our biggest advantage over our rivals in Asia is a landmark free-trade pact with the mainland of China, which was launched in 2004. It is called the Closer Economic Partnership Arrangement, or CEPA for short. CEPA was expanded at the start of this year with the inclusion of another 11 services sectors. Currently 38 services areas are covered by CEPA. These include key areas such as banking, logistics, insurance, tourism, convention and exhibition and professional services.

Through CEPA, companies in Hong Kong have the first-mover advantage and enjoy enhanced access to Mainland markets and preferential terms. CEPA rules are nationality neutral, which allows foreign companies, including Belgian firms, incorporated in Hong Kong to enjoy the same benefits as local firms.

CEPA applies across the whole country, so just imagine what it could do for your business.

Being an international financial and trade centre is not enough. We also have to be clean and green. Pollution is a problem that plagues many developed cities. Hong Kong is no exception, and we have made environmental protection a top priority.

We already have one of the world's best public-transport systems. To further reduce pollution, we are going to expand our public-transport system and encourage more people to use the train or bus. We are providing incentives for people to use more environmentally-friendly vehicles. And we are working with the local power stations to encourage them to use cleaner fuels.

Polluted air knows no boundaries. So we are working with our counterparts in neighbouring provinces to clean up the air. We are making good progress towards our ambitious pollution-reduction targets by 2010. We are also helping Hong Kong factories operating on the Mainland to adopt more environmentally-friendly production techniques. The results have been encouraging.

No major metropolitan city is complete without a rich arts and cultural environment. The West Kowloon Cultural District project - one of the most ambitious arts and cultural facilities envisaged anywhere in the world, will offer 40 hectares of facilities that house a variety of performing arts, galleries and museums, as well as commercial enterprises. Our goal is to enrich Hong Kong people's lives, stimulate our cultural and creative industries, and attract visitors from around the world.

In Hong Kong we like to call ourselves "Asia's world city". I hope you will be able to pay us a visit soon to see why.