The policy address, titled "Embracing New Challenges," responded to Hong Kong's new challenges, including the current global financial crisis, food safety and environmental pollution.
"New challenges have surfaced since my last policy address," Tsang said in his second annual policy address since he won a second term as HKSAR Chief Executive in March 2007.
"These are uncertain times and we are facing risks to our economy, society and everyday lives," Tsang said in the broadcast live address, vowing to uphold the principle of "Big Market, Small Government" in promoting economic development.
"When the market fails, however, the government should be prepared to intervene in a timely and decisive manner," Tsang said," strong government leadership is the key to stabilizing the economy and helping people regain peace of mind."
According to Tsang's policy address, Hong Kong's economic growth declined noticeably to 4.2 percent in the second quarter and the economy is expected to slow further due to the worsening global credit crisis.
On the global financial crisis, Tsang said the worst is yet to pass as the financial turmoil triggered by the U.S. subprime crisis continues to deteriorate and has spread to Europe.
"Its destructive force is much stronger and more widespread than the Asian financial turmoil in 1997," Tsang said, adding: " The recovery will take longer, be more difficult and certainly cannot be taken lightly.
Although the current financial tsunami has not caused systematic damage to Hong Kong's financial market, Tsang said, he will soon establish and chair a task force to continually monitor and assess the impact of the financial tsunami on local and global markets, and provide timely evaluation of its impact on the local economy and major industries.
