Complementing Our Strengths with Those of the Mainland

26. In addition to the continuing development of those sectors with a competitive edge, Hong Kong's future development hinges on the economic growth momentum in the Mainland. According to the World Bank, the economy of China will become the world's second largest by 2020. It is envisaged that Hong Kong will benefit from such strong growth over the next 20 years.

27. Enhancing co-operation with the Pearl River Delta (PRD) is of particular importance. Over the past two decades, Hong Kong and the PRD have complemented each other, and together developed into a highly productive economic region. With a population of 40 million and many affluent consumers in a number of cities, the PRD is an enormously attractive market. Following China's accession to the World Trade Organisation, co-operation between Hong Kong and Guangdong will rise to new heights. The Government is determined to actively promote economic co-operation between Hong Kong and the PRD region with a view to achieving a 'win-win' situation. This is a key element in our efforts to consolidate and enhance Hong Kong's position as an international centre for finance, trade, transport and logistics, as well as a premier tourist destination.

28. My colleagues and I have established effective communication channels with the leadership of the Guangdong Provincial Government to facilitate co-operation and co-ordinate our long-term development. In addition, next year we will establish an Economic and Trade Office in Guangzhou to strengthen business liaison between Hong Kong and Guangdong, and to provide better support services for Hong Kong businesses in the PRD.