Allow me to congratulate the Japan National Press Club on its 40th anniversary this year. Over the past four decades, presidents and prime ministers, business leaders and community organisers from all corners of the globe have graced these hallowed halls. The list includes three former Hong Kong governors and our first Chief Executive Mr Tung Chee Hwa.

Mr Tung was here in 1997, just a few months after our reunification with the Mainland of China. Back then, no one was quite sure how the future would pan out for our city, and there were plenty of doomsayers - including some in the media - who believed Hong Kong had no future at all after the handover.

You may recall that in 1995, Fortune magazine ran a cover story predicting "The Death of Hong Kong". It wasn't until a couple of years ago that the magazine admitted its dire prediction had been way off the mark. In 2007, Fortune said, and I quote: "Oops - 10 years after the handover Hong Kong is far from over, and hardly dead."

Of course, people in Japan are familiar with the Hong Kong success story. Japan is our third largest trading partner. Our bilateral trade last year was worth almost US$54 billion; about 26,000 Japanese people live in Hong Kong and we welcome more than a million Japanese visitors each year.

Probably to the surprise of many, we are also the largest market for Japanese agricultural, forestry and fisheries products, accounting for about 20% of your total exports.

The relationship between Hong Kong and Japan is mature and multifaceted. Over the years we have been working closely with our Japanese counterparts at both the central and local government levels to promote mutual exchange.

Japanese culture is popular in Hong Kong and a vital ingredient in our "East-meets-West" way of life. Japanese films are regularly shown during our film and arts festivals and we have welcomed some of your top musicians, dancers and performers in recent years.

We have just taken another major step to promote cultural exchange. During my meeting with your Foreign Minister Hirofumi Nakasone on Monday, we agreed to introduce a Working Holiday Scheme between Hong Kong and Japan as soon as possible. This will encourage young people from both places to experience more of each other's culture. 

Some of Japan's biggest media organisations have a base in Hong Kong including news agencies, leading Japanese newspapers and TV stations.

Our media also enjoy press freedom - in fact this is one of the many freedoms guaranteed by our constitutional document, the Basic Law. I speak from personal experience when I say our media are as probing and lively as ever.

In recent months, the global financial crisis has provided fertile ground for the media. Today, I will outline our principles and strategies for tackling the crisis. I will also talk about some of the opportunities for deeper relations between Hong Kong and Japan.

It has been clear for many months that economies around the world are in the economic slump together and we will have to climb out of it together.

Despite the temptation to find a quick fix to the problem there is no room for protectionism or inward thinking in our globalised world. What's required now is a recommitment to co-operation between governments and a co-ordinated approach to dealing with the financial crisis.

The day before yesterday, I met with your Prime Minister Taro Aso. We had a positive and constructive discussion on a range of topics, including on how best to overcome the financial crisis.

Although no one knows how long this economic downswing will last or how deep it will go, we do know from past experience - including the Asian financial crisis a decade ago - that recovery will be swifter and less painful if we act together in a spirit of openness and transparency and promote fair competition.

Indeed, in Hong Kong we see an opportunity to further open our door to trade and investment with our neighbours across the boundary in the Mainland of China and with our partners in the region including Japan.

The Central Government in Beijing has put its full weight behind our city's economic recovery. It has also approved last December a blueprint to develop the Pearl River Delta region into one of the world's most competitive regions by 2020.

To realise this goal, Hong Kong, Guangdong and Macau - all part of the PRD region - are working to forge a closer partnership in a wide range of fields to strengthen intra-region connectivity, remove barriers to trade and investment, enhance environmental protection, and promote innovation and technology.

At home, we are moving ahead with 10 infrastructure mega-projects. Some of these are cross-boundary projects that will better connect Hong Kong to our neighbours in the PRD by road and by rail. We anticipate these projects will create about 250,000 jobs and boost our GDP by 7% when completed.

As China's premier international financial centre, we will continue to expand and diversify our business connected with Renminbi - China's currency. Most of our retail banks offer Renminbi services and we are the only place outside the Mainland to have a Renminbi bond market. Given our experience and knowledge, Hong Kong is in a strong position to benefit from the Renminbi's growing importance in the international system. This includes the use of Renminbi for settlement of international trade with the Mainland.

I was particularly encouraged by a recent survey by the Japan Centre for Economic Research based here in Tokyo. Hong Kong was rated number one in the world in the JCER's Potential Competitiveness Ranking 2008. We have remained in first place for four years in a row, so we must be doing something right.

Hong Kong has also been consistently rated as the freest economy in the world by the US-based Heritage Foundation and the Fraser Institute in Canada.

Under the "One country, two systems" formula for our reunification in 1997, we have retained our capitalist system and our own freely convertible currency; our common law legal system is underpinned by an independent judiciary and our civil service is clean and efficient.

Hong Kong has become the location of choice for foreign firms with their sights set on the China market. More than 700 Japanese companies have regional headquarters or regional offices in our city.

In addition to our prime location in the PRD region, these companies can take advantage of our experience in doing business on the Mainland. We also have world-class services and infrastructure as well as a global communications network and a low and simple tax regime.

The great thing about small economies such as ours is that we can react quickly to challenges and opportunities.

Last year, we saw an opportunity to establish Hong Kong as a trading and distribution centre for the wine industry. We already have the right location and expertise to achieve this goal. Last year, we also eliminated wine duties, becoming the only free wine port among major economies.

The result: In 2008, wine imports from Japan rose to more than US$800,000, representing a more than five-fold increase from 2007. Our total wine imports from around the world last year reached US$370 million - a year-on-year increase of almost 80%.

In the past 12 months, we have hosted a series of international wine auctions and wine fairs. We have seen an increase in state-of-the-art wine storage facilities and we have identified old buildings with historical value that may be used for wine functions such as training, wine appreciation and a wine museum.

Now to another important area for us, tourism. Even as the global economic crisis began to bite last year, we saw visitor arrivals rise to more than 29 million. That includes more than 1.3 million visitors from Japan.

This evening we will launch "Japan-Hong Kong Tourism Exchange Year 2009" to promote two-way tourism between us. It will be a timely boost to both our economies during the financial crisis.

Also, earlier today, we unveiled our new "Meetings & Exhibitions Hong Kong" office in Tokyo. This office will serve the meetings, incentive travel, conventions and exhibitions sector - what is often called the MICE sector. It will promote events and provide a one-stop service for anyone organising or attending meetings and exhibitions in Hong Kong.

I hope you will pay us a visit soon. I can assure you that Hong Kong is very much alive and kicking, 12 years after our reunification with the Mainland.

In December, you will also be able to cheer on the Japanese athletes at the East Asian Games in Hong Kong. This will be an extra-special occasion for us following the success of the Beijing Olympics last year when we hosted the Equestrian Events of the Games.

Once again, thank you for the opportunity to talk about the close relations between Hong Kong and Japan and to highlight some of the ways we aim to build even stronger bilateral ties in the months and years ahead.

I look forward to developing our contacts across the board as we tackle the global economic crisis and work toward a more stable and prosperous future for our people, our economies and our region.

Chief Executive Donald Tsang gave this address at the Japan National Press Club in Tokyo.