'If we take a macroscopic view and examine the strength, weakness, opportunity and threats we find that Hong Kong has an asset that few cities in the world can match,' Professor Otto says.

'It is called the Pearl River Delta. We are practically within arms' length of each other. We share the same language, dialect, culture, history, family ties. Business wise, we have been working like hand in glove.'

The tri-session discussion forum, formally known as the HKUST Forum On The Future Development Of Hong Kong, draws to a close with the hosting of the final event today at the Island Ballroom, Island Shangri-La Hotel. The forums were held over three months beginning in May. Today's theme will examine the government's role in the economy.

Speaking at today's event are Christine Loh Kung-wai, chief executive of Civic Exchange, Michael Enright, professor of business administration at HKU, Wilfred Wong Ying-wai, vice-chairman of Shui On Holdings, Professor Edward Chen Kwan Yiu, president of Lingnan University.

Leonard Cheng, professor of economics at HKUST, will also take part in the panel discussions. A luncheon presentation will be made by Dr John Chan Cho-chak, chairman of the University Council of HKUST and KMB managing director. The event will be moderated by Francis Lui Ting-ming, professor of economics, HKUST.

The first forum session was devoted to the theme of economic opportunities in the Pearl River Delta; the second forum looked at the issues of innovation and entrepreneurship.

Professor Lin says the forum was put together as a way to discuss important issues and provide valuable insights that could be used to remedy the downturn.

'With unemployment reaching a two decade high of 7.4 per cent, we've got to ask ourselves how can HKUST be more productive in society' he says.

'Certainly it is a very important time in Hong Kong, the Chief Executive has just entered his second term in office, the economy is bad. We are hoping at this time to identify the main issues and come up with several suggestions which the new government might be interested in knowing.'

One answer, says Professor Lin, is to look deeper at the issues and encourage healthy debate among the academic community. This is not a new role for HKUST, but Professor Lin admits that organising a conference was a daunting task because the issues have never had a greater importance for the community. He pointed to the strong turnout during what is normally a holiday period as evidence of the interest in the academic and business communities.

Where some see competition from the mainland in the form of cheaper land, labour, and intellectual capital, Professor Lin sees opportunity. Instead of fearing the economic threat of the mainland, Hong Kong should embrace a closer relationship and look to enhance efficiencies, he says.

The Pearl River Delta recorded a combined gross domestic product of US$88 billion in 2000. When Hong Kong is added, the combined territory ranks as the 18th largest economy in the world, bigger than Russia, Sweden and Turkey.

To leverage these strengths, important steps should be taken, such as opening the border 24 hours and reducing bureaucratic hurdles.

'This is the kind of thing the Hong Kong government should work with the Guangdong government to remedy,' Mr Lin says. 'If this area was more efficient, it would be more competitive relative to Shanghai and the Delta.'

Professor Lin envisages the Pearl River Delta developing into a powerful, albeit high-cost centre, in much the same way that Manhattan is the intellectual centre of New York.