This commentary, titled "One Country, Two Systems" Concept Demonstrates Vitality, Hongkongers Show Talent in "Governing Hong Kong", is a year-end retrospect written by Our Journalist Tao Shi'an. The commentary reads in part as follows:

Recently, good news have kept pouring in from Hong Kong. The local gross output value grew by 4.5 percent in the third quarter, it is estimated that there will be a more ideal growth rate in the fourth quarter. On December 24, an all-time high Hangseng index of 16833 points was created in the Hong Kong stock market. The gross market value reached the high level of HK$4374.4 billion, doubling the lowest value in August last year. Hong Kong's economy is heading for a comprehensive development. The city residents are rejoicing over the correct policy of the HKSAR government and have benefited from the "one country, two systems" principle.

October 1997 is still fresh in people's minds, the newborn HKSAR government was faced with severe tests and a vicious financial storm came head-on. International financial speculators exerted round after round of impacts. The HKSAR government decided to adopt a series of measures. As a result, it quickly set up a defense line and took a firm foothold. In August 1998, international speculators made a comeback and pushed the Hangseng index down to 6000 points, attempting to manipulate the financial market. In an effort to restore the market economic order, the HKSAR government determinedly put foreign exchange funds worth HK$100 billion into the stock market and successfully beat back the international speculators. Then, the Hong Kong Financial Administrative Bureau and the HKSAR government again took a series of measure to perfect the financial mechanism, this has not only helped Hong Kong's economy avoid the calamity of being drowned, but also created a favorable environment for its economic recovery.

The financial storm has caused a slump in Hong Kong's stock market, a sharp drop in housing price, a shrinkage in assets and heavy losses to its economy. The question about where will Hong Kong's economy go has become a major issue to the common concern of the local people and leaders of the HKSAR government and provided them with food for thought.

It is definitely impossible to promote economic growth by following the old path of relying mainly on the added value of real estate and inflation. While adopting a series of measures to stimulate the economy, invigorate the market and stop further economic glide, the HKSAR government also drew upon all useful opinions, engaged in scientific discussion and proof and set about to draw a blueprint for Hong Kong's long- and medium-term development.

The local government relies on science and technology, talents, inventive concepts and realistic input of funds to enhance scientific and technological innovative ability; it also relies on further integration with the hinterland economy to promote the optimization of structure and realize a comprehensive revitalization. That is the new road established by the HKSAR government for Hong Kong's economy. In his first "Administrative Report", Tung Chee Hwa, chief executive of HKSAR, called for resetting Hong Kong's position for its economic development, giving priority development to science and technology and high value added industries. Through practice in 1998, this idea has been further improved. In his second administrative report, Tung more clearly called for taking innovation, science and technology as the main motive force for promoting economic growth and striving to build Hong Kong into a scientific and technological innovative center.

Centered around this goal, the HKSAR government tackled both macro and micro, or "hard" and "soft" problems. In the five years from 1998, the HKSAR government has planned to invest HK$240 billion in the construction of railways, roads and various other large infrastructure facilities to improve the macro environment for development; in the "soft" aspect, the local government has planned to set up the Hong Kong Science Garden and a host of special consultative institutions.

The HKSAR government has a clear train of thought, adopts an active and realistic attitude and has thus quickly boosted people's morale. The need to stress innovative ability, develop high-tech industries has gradually become the common understanding of society. People have quickly restored their confidence in Hong Kong, some giant consortia have vied to invest their money in high-tech and high value-added industries. some large listed companies have put in huge sums of funds to develop internet, and a number of well-known international scientific and technological companies have stepped up formulation and implementation of their plans for investing in Hong Kong. At the end of 1999, the agreement signed with the United States on setting up a Disney Amusement Park has reflected, from one aspect, the fact that international business people look upon the prospect of Hong Kong as promising.

In the face of the tendency of global economic integration, the rapid development of the inland economy, as well as the change brought about by the economic restructuring of Hong Kong itself, the HKSAR government deems it necessary to reset the position of Hong Kong. In his third administrative report, Tung set the position of Hong Kong as follows: In the 21st century, Hong Kong will not only become an important city of China, but also will be built into the world's first-rate metropolis based on knowledge and characterized by a developed economy and a beautiful environment.

Hong Kong enjoys the superiority of convenient fund-raising, developed creditability and easy access to information, it also has the economic strength to achieve this goal. But Hong Kong's greatest deficiency is the lack of scientific and technological personnel. The HKSAR government has decided to solve this problem by absorbing international talents, particularly outstanding personnel from the hinterland of China. At present, its plan to bring in outstanding people from the hinterland is being actively carried out. Meanwhile, the HKSAR government regards the stepped-up training of local outstanding personnel as one of the two major points in its administration. The other main point is to build the world's first-rate living environment, so as to attract more international investors.

The Hong Kong government has consistently abided by the policy of a free economy and supported the development of the private economy. What it is doing is concentrated mainly on the construction of infrastructure facilities and the building of an appropriate framework of standardized management and devoting its efforts to establishing a good investment environment, providing investors with an opportunity for equal competition, and guaranteeing the effective operation of the market.

A deep impression people have got is that the HKSAR government is completely unafraid before danger and difficulties and when the vicious attack makes the market become frenzied, it unhesitatingly makes active and appropriate reaction to it. The HKSAR has been doing so over the past two years. Although Hong Kong's economic recovery has just begun, however, with a clear and correct train of thought, and powerful leadership as the traction force, the day is not far off when Hong Kong will achieve a comprehensive, vigorous development.