The Hong Kong region, located at the southeastern tip of China, is composed of Hong Kong Island, Kowloon and the New Territories (including 235 islets). Covering an area of 1,092 square km, it has a population of 6.725 million, 95 percent of them being Chinese. Hong Kong is an international metropolis and, as an important center of finance, trade, shipping, tourism and information in the Asia-Pacific region, is known as the "Pearl of the Orient.¡±

On July 1, 1997, Hong Kong smoothly returned to the motherland after 150 years of British colonial rule. Since then, it has entered a new historical period featuring "one country, two systems" and "Hong Kong governed by the Hong Kong people¡± with a high degree of autonomy.

Donald Tsang, Chief Secretary for Administration of the Hong Kong Special Administrative Region, said that over the past four years, the SAR government, with the backing of the Central Government, relying on the firm and persistent spirit of the Hong Kong people and under the leadership of the chief executive, has fulfilled its mission and successfully implemented the policy of "one country, two system.¡±

He said that while accomplishing the historical task, the SAR government has also maintained elements that have bolstered the success of Hong Kong. Such elements include the mode of government by law, the principle of free economy, the team of honest public servants, the environment of equal competition, and the freedom of speech and press. By relying on these advantages, Hong Kong continues to be one of the best places for business operations and many Hong Kong people who have emigrated abroad have returned. All is evidence of the implementation of the "one country, two systems" policy.

Latest statistics show that more than 3,200 overseas companies have set up representative offices in Hong Kong, ranking first in Asia. Over the past two years, 750 companies have established regional headquarters in Hong Kong. The Washington-based Heritage Foundation has selected Hong Kong as the top free economic system in the world for eight years running.

According to data provided by the Hong Kong Monetary Authority, the official foreign exchange reserve assets of Hong Kong by the end of February 2002 were US$111.3 billion. Hong Kong's foreign exchange reserve ranks fourth in the world, following Japan, the Chinese mainland and Taiwan. The US$111.3 billion foreign exchange reserve assets are more than 7 times the region's currency in circulation and account for 44 percent of the money supply in Hong Kong dollars (M3). The ratio is one of the highest around the globe.

At the end of 2001, capitalization of the Hong Kong stock market was 3.95 trillion Hong Kong dollars, the 10th largest stock market in the world and the second in Asia.

Rating of cities in terms of life quality released by an international consulting firm shows that Hong Kong is above average, in 69th place among more than 200 cities worldwide. Among Asian cities, it ranks 10th and among Chinese cities, it is at the top.

The work done by the SAR government also includes: continuing to invest in infrastructure construction, actively developing transportation networks and further improving the overall business environment of Hong Kong; actively optimizing the environment of living and enhancing environmental protection; and keeping educational input and developing the knowledge economy featuring high value added. The SAR government has also consistently been devoted to the protection of human rights and freedom and safeguarding the rule of law.

It has been nearly five years since Hong Kong's return to the motherland. Over this time, Hong Kong has withstood the impact of the Asian financial crisis and consolidated its position as a center of international finance, trade, shipping and information. These achievements, as outstanding as they are, are there for all in the international community to see.

Hong Kong SAR Chief Executive Tung Chee-hwa said that over the past four and a half years, the overwhelming majority of Hong Kong residents have been most concerned about the implementation of the "one country, two systems" formula as well as the Basic Law.

After the Asian financial crisis, Hong Kong encountered severe economic difficulties again in 2001. However, the overall national situation has produced a strongly positive influence on Hong Kong. The Central Government devised and put forward a timely series of measures in support of its economic development. The SAR government headed by Tung Chee-hwa has led Hong Kong compatriots to work with stamina and diligence. Overcoming various difficulties, they have consolidated the position of Hong Kong as a center of international finance, trade and shipping and maintained its prosperity and stability.

In March 2002, Tung Chee-hwa was appointed by the Central Government as the second term chief executive of the Hong Kong SAR. He said he would work hard to be worthy of the trust the Central Government places in him and live up to the expectations of Hong Kong residents.