Madam President,

A. Introduction

1. This is the first Policy Address of my second term as Chief Executive of the Hong Kong Special Administrative Region. Over the past five years, we have successfully implemented "One Country, Two Systems" and weathered the Asian financial crisis. At the same time, we have set the broad direction for our future development and for steering Hong Kong out of its economic difficulties. It is clear to me that the success of "One Country, Two Systems" involves maintaining our socio-economic systems and way of life and ensuring Hong Kong's economic growth and social progress. The common goal of our community is to achieve long-term prosperity and stability. The most important task of the Administration is to lead Hong Kong out of the present economic difficulties and restore people's confidence in their future. This is our greatest challenge.

2. Published with my Address today is the "Policy Agenda" - our road map for the way forward in specific policy areas. This was drawn up after extensive consultation and thorough deliberation over the past few months. It is a pragmatic and proactive response from my new team to the expectations and aspirations of the people of Hong Kong. It embraces the views and suggestions of our community. This Policy Agenda also reflects the gradual formation of mainstream thinking in the community about our future development as well as our common values. It forms the basis on which we will organise our work and sets the direction in which the Government and the whole community will strive together.

3. Directors of Bureaux will present the details of the Policy Agenda later. My Policy Address today will focus on the major issues of public concern. These include the background and causes of our present economic difficulties, our plans to expedite economic recovery, decisive resolution of the fiscal deficit, as well as current legislative work on Article 23 of the Basic Law. My theme today is revitalisation of the economy - only sustained economic growth can lay the foundation for improving people's livelihood and help in taking our society forward.