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Updated: 2007-06-28 11:20

Despite some doubts about Hong Kong's future in the lead-up to its return to the motherland a decade ago, the implementation of "one country, two systems" has proven a major success story.

Hong Kong has overcome big challenges and thrived under the principle, paving the way toward a brighter future.

Gao Siren, director of the Liaison Office of the Central People's Government in the Hong Kong Special Administrative Region (HKSAR), is particularly optimistic.

"Now a prosperous and stable Hong Kong has enhanced the confidence of Hong Kong compatriots and the international community towards the concept," Gao said in an interview with China Daily.

Gao said the "two systems", namely capitalism and socialism, have harmoniously existed in Hong Kong and the principle of "high autonomy of Hong Kong people governing Hong Kong" has been fully implemented.

Under the precondition of "one country", Hong Kong's social and economic systems and lifestyle remained unchanged, while its legal system also basically remained unchanged.

Hong Kong residents now enjoy more democratic rights than they did under the British control, Gao said.

"The Hongkongers are now the true master of their hometown, and enjoy wider democracy than the colonial period," Gao said.

The central government has unreservedly supported the governance according to law by the Chief Executive and the government of the Hong Kong Special Administrative Region, and will continue to firmly support the SAR's push for long-term prosperity and stability, Gao said.

"The Hongkongers absolutely have the wisdom, capacity and methodologies to govern, build and develop Hong Kong," Gao said.

Hong Kong has also maintained its competitive edge. With central government support, Hong Kong has successfully weathered the Asian financial crisis and SARS.

Hong Kong's economy is now in its best position for 20 years, enjoying "high growth and low inflation" for the last three consecutive years. It has witnessed an average year on year growth of 4 percent for the past 10 years, and also 7.6 percent for the past three years, following the recession after the Asian financial crisis.

It also remained the freest economy for the past 13 years, and the unemployment rate is at a 3 percent low.

Hong Kong also enjoys a booming stock market and real estate market.

Its relationship with the Chinese mainland is one marked by "all-out support" provided by the central government, Gao said.

In the past 20 years, Hong Kong has been the largest source of overseas investment in the Chinese mainland.

Capital from Hong Kong or from foreign countries via Hong Kong accounted for 41 percent of the mainland's total.

The proportion has been lower in recent years but Hong Kong still remains the number one capital source for the Chinese mainland, with figures still rising.

"In the 11th Five-Year plan (2006-10), the central government reaffirmed Hong Kong's position as a financial, trade and shipping hub," Gao said, dismissing speculation that rapid financial and logistics development on the mainland could eventually cause Hong Kong to become marginalized.

Gao noted that although Hong Kong faced the challenges of readjusting its economic structure, it still has advantages over other cities on the mainland, and that the SAR has a "special role" in aiding the reform and opening up of the mainland economy.

Hong Kong also provides a perfect springboard for inland enterprises to sail into the world market. A total of 367 inland enterprises had listed in Hong Kong by the end of 2006.

"The open economic mechanism, highly mature market performance, international standard economic operation, as well as sound financial and legal environment will also serve as important examples for mainland enterprises," Gao said.

The role of Hong Kong has become more important with the mainland's entry into the WTO.

"The central government wishes Hong Kong to play its role in helping the mainland economy catch up with the world economy," Gao said.

As a giant economy, China's success on the world stage will depend on several economic engines.

"The development of Shanghai, Guangzhou and Shenzhen could never be mutually destructing to the development of Hong Kong. They are complementary, and offer mutual benefits, and all contribute to the whole country," Gao said.