Distinguished guests, chamber members, ladies and gentlemen.

I have chosen this date to speak to you because long ago I thought I need to address you in a good mood. Of course I had the foresight to know that this would happen.

Thank you very much for inviting me to speak at this Chamber luncheon today. Believe it or not, this is actually my first opportunity to talk to such a large gathering since the Handover celebrations a month ago.

I am especially glad of this opportunity to share my thoughts with you and I will be equally happy to field some questions afterwards.

It was indeed one of the most significant events for Chinese people -- a new era and a moment of pride for Chinese people all over the world.

The Handover was a solemn, stately and emotional moment for all of those present.

We announced to the world, in our own language, that Hong Kong had entered a new era -- a new era which I hope all of you here today will continue to be part of.

The resumption of the exercise of sovereignty over Hong Kong by China under the 'One Country, Two systems' concept, presents all of us in Hong Kong with a tremendous opportunity to build an even more prosperous society in which to live and work.

It is up to all of us here in Hong Kong to make this work and I, for one, am sure we can and will.

Today is also somewhat of a small milestone for Hong Kong, since it marks the end of the first month of existence of the Hong Kong Special Administrative Region.

This past month has been very important for Hong Kong and its people because it has given us a chance to actually put into practice those concepts about which we have heard so much -- that is, 'One Country, Two Systems' and 'Hong Kong people ruling Hong Kong'.

Before the establishment of the Hong Kong SAR on July First, we could only talk about what we earnestly believed would continue to make Hong Kong a success.

I often spoke about the safeguards for Hong Kong's autonomy contained in the Basic Law. I often spoke about maintaining our lifestyle; about the rule of law being upheld; about a level playing field for all who do business here in Hong Kong.

I often stressed the importance of maintaining and building Hong Kong's role as an international trade and finance centre and pursuing the tried and tested policies of free, open trade unencumbered by unnecessary rules and regulations.

Now, one month after the establishment of the Hong Kong SAR, we are living the Basic Law, we are part of one country with two different social, economic and political systems and we Hong Kong people are, for the first time, masters of our own destiny.

It has been a very busy month for me and one which I think has shown clearly that Hong Kong people have no reservations about openly expressing their views or exercising their rights and freedoms as guaranteed in the Basic Law.

If people ask me: "What has been the biggest change since July First" I would have to say: "There has been no big change. It is business, as usual.

There are demonstrations, as usual. Law suits, as usual. Media scrutiny, as usual. And indeed, this is part of our culture. In fact, it would be unusual if this was not the case, since this is what we know and expect of Hong Kong and its people.

What has changed is that Hong Kong has become a part of China and there is immense pride that this has happened. There is immense confidence, too, that tomorrow will be even better.

I would like to talk about two critical success factors for Hong Kong which also serve to highlight what I have just been saying about 'business as usual'.

The first is the rule of law. Mark my words, the rule of law must be preserved by all means and it will be preserved by all means.

All that I do, all the Government does, must be and will be in accordance with the law because we know that the rule of law is essential to the continued success of Hong Kong.

There are some who cast doubt on this and in this past month we have seen landmark challenges to the legitimacy of the Provisional Legislature and the very legitimacy of Hong Kong's laws themselves.

We are expecting another challenge soon concerning mainland-born children with Hong Kong parents.

All of these challenges have been, and will continue to be, dealt with by our own courts.

Some friends have asked me: "Are you disappointed that the validity of Hong Kong laws, of the Hong Kong provisional legislature have been challenged within these first 30 days?"

The answer is: "No".

Why? Because it shows the people of Hong Kong and those in the rest of the world that the rule of law is of paramount importance in Hong Kong.

It shows that the Hong Kong SAR Government will argue its case in court, and abide by the court's ruling.

These challenges are part and parcel of the Hong Kong legal system, they are part and parcel of the rule of law itself.

Indeed, more challenges may arise. This is only natural given the fact that the Basic Law has been in effect for just a month.

Another critical success factor about which I would like to talk is our free market economy.

In Hong Kong, we practice capitalism to the hilt. We let the market take the lead in setting its own parameters while Government intervention is kept to a minimum.

This approach seems to have worked well, if I may be allowed to understate the obvious.

We are, after all, the world's 7th largest trading economy; we have some of the world's largest foreign currency reserves; we have the busiest container port in the world and the busiest international air freight throughput.

We have an annual GDP per capita higher than many Western nations. We have been consistently rated as the freest economy in the world by the US-based Heritage Foundation.

Now, in any free market economy there will always be a sector of the community which is left behind and I believe we have a duty as a caring and compassionate community to give them a helping hand.

For those who cannot help themselves we clearly have a responsibility to ensure they live a decent and dignified life.

For those who can help themselves, we must provide them with on-the-job training or retraining so they can participate in, and benefit from, the fruits of our success. We must help them to learn new skills to meet the demands of the market.

One of the major reasons for our remarkable economic success is undoubtedly Hong Kong's industrious, flexible and skilled workforce.

This, combined with our entrepreneurial spirit, has enabled a gradual and smooth shift from a manufacturing-based economy to one based on the provision of services.

This transformation of the economy would not have been possible unless employers and employees could react quickly and flexibly to prevailing or emerging market forces.

In fact, employers and employees in Hong Kong have built generally harmonious relations over these past few decades, despite the tremendous changes in the economy. The average number of working days lost through labour disputes in Hong Kong is only half-a-day for every thousand workers. This is certainly one of the lowest rates in the world.

We rarely have serious labour disputes in Hong Kong and there are laws in place to protect employees. The average number of working days lost through labour disputes in Hong Kong is only half-a-day for every thousand workers. This is certainly one of the lowest rates in the world.

Recently, there has been some criticism of the SAR Government's move to freeze several labour laws which were passed in a rush of legislation a few days before the Handover.

I believe these laws were passed hastily, without proper consultation or careful consideration by all the parties concerned.

My main concern is that these laws could hurt our competitiveness by bringing in unduly restrictive employment practices and terms and conditions.

Excessive protection and restrictive employment practices have failed elsewhere in the West and they have no place in Hong Kong.

Such practices will hurt Hong Kong in the long-term and in doing so they will hurt the very labour force they are designed to protect.

While there is no doubt in my mind these laws would have far-reaching implications on Hong Kong's economy, I also believe it is right for the community to make up its own mind by examining and assessing the true extent of their implications.

Yes, there is a need to protect the long-term interests of the workforce.

There is also a need to ensure the long-term competitiveness of Hong Kong's economy.

I am sure that after careful consideration and consultation with all sides, we will be able to find the right way forward in maintaining Hong Kong's economic vitality which in turn will mean more job opportunities for everyone.

I believe in Australia you would say that all we want is a 'fair go' for the economy, for employees and employers.

Another concept which I know strikes a chord with all Australians is that of mateship. I am very please to say that Hong Kong and Australia have been 'mates' for many years now and indeed continue to build on this friendship.

This friendship took a big step forward 10 years ago with the establishment of the Australian Chamber of Commerce in Hong Kong to foster not only closer ties with the business sector but also the rest of the community.

I believe you know you now have over 1,000 members from almost 500 companies which employ some 10,000 staff. Hong Kong is now home to more than or close to 23,000 Australians. All of this paints a picture of a strong bond between Australia and Hong Kong.

But it is not only Australian companies which have flocked to Hong Kong to do business, as you well know. Hong Kong is the regional hub for thousands of international companies.

You can rest assured that we will continue to welcome foreign investors and multi-national companies to Hong Kong where we have a stable economic environment, a solid linked-exchange rate, a level-playing field, low taxes and excellent infrastructure to support you in your endeavours.

You can rest assured, also, that we will continue to look ahead for ways to improve our international appeal by upgrading our information infrastructure, reducing red tape, helping entrepreneurs develop high value-added industries and investing in human resources development.

I am sure many of you are also looking towards the tremendous opportunities which will present themselves in the enormous markets within China.

Since the opening up of China's economy in 1978 there has been remarkable economic growth, unmatched by any other economies in recent history.

If you have travelled to China you will see tremendous vitality and energy and you will begin to understand why, not too far into the 21st Century, China will have to become one of the world's largest economies.

And where else but Hong Kong to make your base? We already have the people, the skills, the management expertise, the knowledge, the language, the cultural and geographical links to provide international corporations with all they need for successful business in China.

So, as I look back over the first month in the life of the Hong Kong SAR, I have many, many reasons to be confident about the future.

Hong Kong has been separated from China for more than 156 years so we are now involved in a steep learning process about our Motherland.

People in Hong Kong are beginning to learn more about our country, about our culture and our history and that is absolutely essential if we are to make a success of the 'One Country, Two Systems' concept.

At the same time, we in Hong Kong remain very much international in our outlook. We accept diversity of culture, we seek out new ideas and new practices.

We take the best of the East and West and blend these ingredients to give us the recipe of success that is Hong Kong.

As I mentioned earlier, this past month has been a very much business as usual month. But in a place such as Hong Kong, what would you expect?

Thank you.