A. Introduction

1. The year 2004 proved to be good for Hong Kong's economy, with performance surpassing each of the past seven years. We have undergone an unprecedented economic restructuring. Although the process has been painful, it has lowered costs and increased our competitiveness. Most importantly, we have established a clear direction and positioning for future development. Policies and measures adopted by the Government to cope with the rapidly changing situation have started to deliver results. The hard work of our people has paid off, heralding the first stage of economic recovery. My Policy Address today sets out the priorities for this year and the rest of my term, on the basis of experience gained and lessons learnt.