How things have changed since our first Asian Financial Forum in 2007. The theme of the inaugural event was "Leveraging New Opportunities - Advancing Regional Stability". Then came the full impact of the global financial crisis.

The second forum took place this time last year amid global economic turmoil. Our theme last year, "The Changing Face of Asia", was an appropriate choice.

Today the situation has improved considerably, although it would be premature to say that we are completely out of the woods.

However, many economists agree that there has been a shift in global economic power away from Europe and the US and towards Asia - and in particular China. So this year's Forum is aptly titled: "Asia in the New Economic Order".

Having learned some difficult lessons during the Asian financial crisis a decade ago, our region has been relatively resilient in the face of the recent financial tsunami. Today, the international community expects Asia to rise to the challenge and play a more prominent role in the changing economic landscape.

Each of our economies has a part to play. So today, I want to talk about some of the ways we intend to grasp the opportunities in Hong Kong as well as facilitate Asia's financial and economic progress.

Last month, the Asian Development Bank forecast the 14 economies of emerging East Asia - including Hong Kong and the Mainland of China - to grow by 6.8% this year. That's up from the Bank's previous forecast of 6.5% growth.

This is better than many of us would have dared hope for this time last year. However, we should not become overly optimistic. There are dangers lurking that could stall the recovery process.

Governments around the world, including here in Asia, have spent vast sums of money in shielding their economies from the worst of the global financial crisis. In Hong Kong, we have spent some US$11.2 billion on economic stimulus measures. That is equivalent to about 5.2% of our GDP.

We have taken extraordinary steps to guarantee bank deposits, support small and medium enterprises and provide additional capital to the banking sector if required. Other economies have taken similar action.

Now is the time for Governments to start co-ordinating exit strategies from these stimulus measures. A lack of co-ordination may lead to imbalances and financial instability that could hurt our region. The risk of inflation and fiscal shortfalls as well as changing investment appetites also pose policy challenges for the region.

Against this backdrop we have seen the spirit of co-operation gaining momentum.  Asian economies - individually and collectively - stand to benefit from greater co-operation in managing risks, reinforcing systemic resilience, enhancing productivity and ensuring financial stability.

By working together, we can lay a solid foundation for sustainable economic development. This way Asia can play a more constructive role in re-engineering and reshaping the global financial architecture.

A great example of how we can compete and collaborate at the same time is the China-ASEAN Free Trade Area, which was launched on January 1. The new free trade area rivals the European Union and the North American Free Trade Area in terms of GDP, trade volumes and population. It marks a new milestone in our region's history of collaboration.

Strategically and historically, both the Mainland and ASEAN are our major trading partners. We have a great deal of experience as a conduit for trade, investment and economic integration within our region.

We are a stable and vibrant economy with fundamental strengths that have stood the test of time. These include a simple and low tax regime, high-quality services, and free flow of information and capital with no foreign-exchange controls. We also have a stable and fully convertible currency as well as a free and open economy buttressed by the rule of law and an independent judiciary.

All this has helped to enhance our role in three important areas, namely as a global financial centre in the Asian time zone, as a regional asset-management centre and as an offshore centre for Renminbi business.

What's next? We will continue to build on our strength as an international financial centre and enhance the quality and competitiveness of our market to attract and anchor international talent, capital, financial institutions and products.

Our sound fundamentals have helped to attract investors from all over the world to Hong Kong. We have a broad and deep talent pool that has helped to expand our horizons, generate a vibrant cultural blend of East and West and enhance our city's vitality and vibrancy.

At the same time, we have become a vital testing ground for the liberalisation of our nation's capital account and the regionalisation and internationalisation of the Mainland currency, the renminbi.

In just the past year, we have made great progress in expanding the broad range of renminbi products and services offered in Hong Kong. Perhaps the most significant development was a renminbi trade settlement pilot scheme that came into operation last July.

Also last year, Hong Kong banks on the Mainland were given the green light to issue renminbi bonds in Hong Kong for the first time. Two Mainland subsidiaries of Hong Kong banks, HSBC (China) and the Bank of East Asia (China), issued renminbi bonds earlier this year, raising RMB 3 billion and RMB 4 billion respectively.

And last October, the Central Government also launched the first renminbi sovereign bonds in Hong Kong totalling RMB 6 billion. The represented a huge vote of confidence in Hong Kong as our nation's global financial centre.

We will continue to strengthen Hong Kong's role as the testing ground for the liberalisation of the Mainland currency. This includes developing other renminbi business, such as renminbi financing and promoting direct investment in Hong Kong.

To speed up our financial integration with the Mainland, we will implement new measures with our neighbours in Guangdong Province on an early and pilot basis to enhance the two-way flow of financial institutions, financial products, capital and talent between Hong Kong and the Pearl River Delta region.

Hong Kong will continue to be a major capital-formation centre for Mainland investors. Since the listing of the first H-share enterprise here in the early 1990s, we have been serving as the preferred capital-raising centre for Mainland enterprises. We provide equity listing, bond issuance, international asset management and risk-management services.

More than 480 Mainland enterprises are listed in Hong Kong, together raising a total of $2.3 trillion since 1993. The 10 largest IPOs in our stock market are all from the Mainland. Throughout the global financial crisis, our stock market has operated smoothly and remained one of the most active and successful bourses in the world.

We will also continue to break down barriers to cross-boundary trade and investment under our unique free trade pact with the Mainland, what we call the Closer Economic Partnership Arrangement, or CEPA.  The latest supplement to CEPA came into effect last October. Under CEPA, bank branches established by a Hong Kong bank in Guangdong can now set up "cross-location" sub-branches in Guangdong Province. This helps them expand their business network across the boundary and improves the quality and efficiency of banking services in the region.

Given the Mainland's large and increasingly affluent population, Hong Kong is an ideal - and logical - wealth-management centre for Chinese individuals and institutions.

Hong Kong serves as an effective channel for orderly capital outflows from the Mainland, and Mainland financial institutions can manage their overseas investments through Hong Kong. We will continue to streamline the financial system in Hong Kong to become a more efficient and low-risk corridor for investment into and out of the Mainland.

The multi-currency cross-border payment arrangements between the Mainland and Hong Kong, which cover the Hong Kong dollar, US dollar, Euro and British pound, have been in operation since last March.

This increases the efficiency of cross-border multi-currency payments while reducing risks and costs. It also deepens financial co-operation between the Mainland and Hong Kong.

Through closer financial co-operation, we aim to play an exemplary role in promoting intra-Asia financial collaboration and integration. In particular, we have the experience, expertise and the motivation to better connect our nation with partners in the region and around the world.

Chief Executive Donald Tsang gave this address at the opening of the Asian Financial Forum.