Last week, the task force on economic challenges held its last meeting. It put forward a batch of recommendations that carry important implications for everyone in Hong Kong.

There is no doubt we have yet to emerge from the impact of the financial tsunami. While recent statistics have shown some signs of economic stability returning, there are still many uncertainties in the global market. Last week's sudden and sharp drop in share indices is just one example. It is clear that big challenges still lie ahead.

There is an old saying that "a crisis is a terrible thing to waste." I agree. The Asian financial crisis hit us hard in 1998. Yet we took the opportunity of that crisis to revamp our financial markets and regulatory regimes. This is a major reason why our banking and financial systems have not faced any systemic problems during the current downturn. All of our financial and regulatory regimes remain on a firm footing because of the hard but necessary work done more than a decade ago.

We must tackle the current financial crisis in the same way. That is why I set up the task force on economic challenges last October. The task force did not just look at ways to overcome current difficulties; it also looked for opportunities to further strengthen our economic foundations and competitiveness.

6 priority industries

On this latter point, the task force has identified six priority industries where Hong Kong enjoys clear advantages, and in which we can take both medium and long-term measures to realise their full potential. These industries are: educational services; medical services; testing and certification; innovation and technology; cultural and creative industries; and environmental industries.

Some have dismissed these measures as nothing new, or that similar ideas have been put forward before. But what sets the task force recommendations apart are that they represent a new mindset and approach, a coherent strategy and are the result of in-depth, top-level deliberation.

In identifying these six priority industries, the task force was acutely aware of Hong Kong's competitive edge in these fields, as well as the huge market available to Hong Kong through the ever-increasing integration with our country, and the preferential access enjoyed under our Closer Economic Partnership Arrangement with the Mainland. The task force understood deeply the need to use these advantages to the full.

The task force also advocated new and bold thinking to tackle obstacles that may hinder the further development of these industries. Existing policy considerations need not constrain our thinking or approach. We should be flexible enough to cater for the needs of these industries, for example, on the question of land supply to build new private universities and hospitals.

Some people have criticised us for "picking winners" and departing from our much-praised philosophy of "big market, small government". These are legitimate concerns.

Hong Kong has thrived as a free and open market. This must and will continue.

At the same time, increasing globalisation and regional competition have resulted in a need for a strong government role in facilitating economic development. So, we are not picking winners. Rather, we are providing a more favourable environment for industries to become even bigger winners than they are now.

I became even more convinced of the need for this type of policy support during some industry visits over the past few days.

Last Wednesday, I visited the local media company that created the popular "McMug" and "McDull" cartoon figures. This is a good example of how a successful creative product can lead to huge business opportunities not only locally, but on the Mainland and abroad.

That same afternoon I met the management of a major online game company and some of the young professionals it employs. I learned more about the very high standards of game production that our industry has achieved. But I also could see how further liberalisation under CEPA would help the company to tap into more opportunities in the huge Mainland market.

On Thursday I visited Chu Hai College of Higher Education. I learned about the vision of the school management and students to develop the college into a private university, as well as their enthusiastic response to the task force's proposal to encourage the development of self-financed higher-education programmes.

On Friday afternoon I visited one of the biggest private laboratories in Hong Kong. There is huge potential for this industry to develop, and with it many many new job opportunities.

After that we visited a high-tech integrated circuit design house and a company producing light-emitting diode products. This not only confirmed my belief that Hong Kong companies have the technological expertise to excel. It also underscored the fact that with a little help from the Government they could expand their Mainland market and carry out more R&D to increase their competitiveness.

HK ready to reap new benefits

These visits all reaffirmed my belief that Hong Kong is ready, and our industries are ready, to reap new benefits arising from the new economic environment.

They also prompted me to remember a comment by a long-time expat colleague and friend who left the city a few years ago. He said: "Hong Kong always worries, and therefore it always succeeds." I think he is largely correct.

We do worry quite often, particularly now, when times are tough and international competition is becoming keener by the day. We don't just worry about ourselves, now. We also worry about the sustainability of our economy for future generations.

The good thing is that we don't just stop at worrying. We look for solutions. We innovate. We work hard. We re-invent the winning formula.

That has always been the Hong Kong way.

And I believe the same will happen again as we fight against the current crisis to build a stronger, broader, deeper and more resilient economic foundation for Hong Kong, our home.

Chief Executive Donald Tsang broadcast this "Letter to Hong Kong" on RTHK.