Develop (but not sell) industrial parks. Charge a low rent. Adjust rent annually, up and down, to a reasonable percentage of manufacturers' pre-tax income;

Turn the old Kai Tak airport into the first clean industrial park, and the sooner the better;

Manufacturers will need cost-competitive labour to be competitive regionally and globally. So let mainland workers fill jobs local labour cannot fill;

Build industrial parks at the border so that mainland workers may conveniently commute to work; and

Lower the tax rate on manufacturing to increase tax revenue and accelerate growth.

Multinationals will be drawn to Hong Kong. They will compete with local manufacturers for industrial space because of: (1) the 'cost competitiveness' you create; (2) the benefits from Cepa; (3) cost-competitive workers for factory jobs; (4) an educated and English-speaking workforce to fill high-tech jobs; (5) efficient logistics and infrastructure; and (6) our laws, and a cleaner and more international environment.

Create the access to banks for people to meet their needs for 'risk capital'. Some suggestions:

Create a special programme based on the sale of US government securities by the Monetary Authority with its repurchase agreement to the participating banks;

Provide incentives for bankers to take in euro-dollar inter-bank deposits for relending to applicants, purchase the US government securities for borrowers to pledge as collateral, and hold the collateral pending repurchase by the Monetary Authority upon receipt of loan repayments;

Price the sale of the US securities so that: (1) 40 per cent of loans will buy the securities, giving 60 per cent of proceeds to the borrowers, (2) the US securities will appreciate in value over seven years so that upon their repurchase (by the authority), the proceeds will fully repay bank loans. Thus, 60 per cent of loan proceeds become in effect 'risk capital' for the borrowers; and

Set a price parameter for the euro-dollar loans that will give bankers an attractive spread and borrowers a low and affordable interest rate. Act now when interest rates are the lowest in 45 years. A special rediscount facility on standby to lending bankers will help them to lock in the spread, lend on fixed rate, and refinance the euro-dollar deposits if future rates should appreciate.

A sum of US$11.3 billion (10 per cent of foreign currency reserves) in the sale and repurchase of US securities will support US$18.8 billion in bank loans, and in my calculations, create US$7.5 billion in risk capital for borrowers. Increase bank loans to US$53.2 billion and US$21.3 billion will pay off mortgages with negative equity. Drags on property value will disappear.

This programme will not change our foreign currency reserves, nor require the government to guarantee. The banking sector will be making profitable loans, secured and self-liquidating, with low risks of default, and benefit at the same time from prepayment of non-performing mortgages on account of negative equity. Grass-root consumers and entrepreneurs will benefit from capital they need to improve their livelihood. Many will go back to what they know - manufacturing in their backyards. Some will become tycoons. Jobs will be created. Consumption will rise. Tax revenue will rise, and deficits will fall.

These ideas are in the public arena. Let me acknowledge the following authorship of articles in the South China Morning Post last year: Andy Xie Guozhong, Morgan Stanley economist on China; Ifzal Ali, chief economist of the Asian Development Bank; James Lee, commentator, and Lawrence Lau, Vancouver chartered accountant; Richard Wong, dean of the business and economics faculty and director of the Hong Kong Centre for Economic Research at the University of Hong Kong; Eden Woon Yi-teng, chief executive of the Hong Kong General Chamber of Commerce; Sir Gordon Wu Ying-sheung; industrialist Liu Yongling; SCMP columnist Chris Yeung; and Joseph Cheng Yu-shek, professor of political science, City University.

Act on this economic agenda. Also, invite the central government to send representatives to participate in local consultation on constitutional change. You have the experience to know that direct and interactive dialogue is beneficial on any subjects, and that understanding and constructive resolution are the products of good communication.

Constitutional change is a goal. It will take open-mindedness, wisdom, time, patience and perseverance to get there. Whereas everyone knows that sound economic initiatives improve people's livelihood, solve the urgent plight of the needy, and enhance stability. A growth economy will help Hong Kong as much as China. We are, after all, one country.

Why was Hong Kong returned to China as a special administrative region? And why were you appointed the first chief executive? People in the mainland, Hong Kong and overseas Chinese everywhere had pinned hopes on your appointment. They still hope that you will keep your date with history as a leader who stands for economic and social progress and political enlightenment. We used to sing in Chinese, the English of which would be, 'Don't wait for leisure to whiten your head, to regret in emptiness.' It is time to define your second term, establish your legacy, and to take your place in history. Time is on your side.

RICHARD M. LIU, Pokfulam