We have another important asset: our strong links with our immediate hinterland, the Pearl River Delta. This is one of the most affluent and fastest-growing regions in China. It is within a 160-km radius of Hong Kong. The greater Pearl River Delta, including Hong Kong and Macau, has a combined population of nearly 50 million. It accounts for 20 per cent of China's total gross domestic product. The Pearl River Delta's GDP is 40 per cent larger than that of the Yangtze River Delta.

Over the past two decades, our two economies have become ever more complementary. Together, we have developed into a highly productive economic region bound by ties of geography, family, culture, language and a common goal of achieving greater prosperity.

Perhaps an even greater opportunity for Hong Kong is the growth of the mainland's domestic market. Since the opening up of China nearly 30 years ago, the size of its economy has grown exponentially. Last year, GDP reached US$1.3 trillion. This growth has created considerable wealth, and a strong domestic economy is taking shape. Membership of the WTO and the development of the western region are likely to accelerate this.

As our country navigates the tide of economic change from a planned economy to a more market-oriented one, Hong Kong is the indispensable pilot boat in front. We will continue to be China's window on the rest of the world, providing investments, professional and managerial know-how, financing, a whole array of support services and the ready access to world markets that will help our country become a truly international player.

We live in a very uncertain world in which integrated financial markets, terrorism, and the spread of infectious and communicable diseases can all create economic and social upheavals with long-term consequences for our communities. More than ever, we need good, strong, caring and ethical leaders, locally, nationally and internationally. Leadership is not simply about excellence in a chosen field or a particular career. Nor is it about making pots of money. It is about creating a vision and a sense of community. It is about fostering commitment to core values and a culture of service. It is about providing inspiration and hope, the promise of a better tomorrow even when things look their darkest.

In my view, the most successful, respected and admired leaders of the 21st century will be those who have a vision and mission to chart a course for tomorrow and not just for today; to share and express the values that hold a society together, in other words, those who lead with strong ideals of integrity, honesty, fairness and openness, and who make it their business to instil these ideals throughout their organisations. They will have the courage to take risks and try new things, coupled with the humility to admit mistakes and failures, and the stamina to overcome any failures; have the self-confidence to surround themselves with the best talent, encourage healthy dissent and value those who are brave enough to say no; and demonstrate care for their stakeholders, whether they be clients, the general public or staff.

Politics and economics are part of a whole. One influences the other. Business opportunities are as much affected by the economy as by the political climate, governance and the constitutional framework within which all social and economic activities occur. September's Legislative Council election marks an important step forward in reaching the ultimate goal of universal suffrage enshrined in the Basic Law. From recent public comments, and the peaceful and orderly demonstration on July 1, it is clear that there is considerable disappointment that universal suffrage has been ruled out in 2007 and 2008. The prospects for reversing this decision are not good.

In the circumstances, I believe that we should now concentrate on the issue of how best to prepare the ground for universal suffrage. Are political parties the way to go? If so, how do we provide a firm foundation for the mature and responsible development of political parties? How do we encourage the community to take them seriously and to participate?

Opinion polls indicate that currently, political parties generally are not held in high regard. Too often, their members are seen to be preoccupied with point scoring, partisan political ambitions and prejudices. The community expects our legislators to engage in reasoned debate and to be prepared to set aside their differences, having regard for the wider interests of the community as a whole. It cannot be denied that some in our community, and indeed in the central government, question the agenda and motives of individual political parties. It is futile to dismiss these concerns as groundless. They have to be addressed through dialogue and, more importantly, through action. At the end of the day, we need to reach a consensus on the best way forward in achieving our ultimate aim of universal suffrage.

We welcome recent attempts on the part of both the central government and the SAR government to reach out to the pro-democracy lawmakers. We trust that this is the beginning of a real dialogue. It is particularly important for the chief executive to work closely with all political parties in the new Legco. An inclusive approach should build trust, and trust should lead to better co-operation between the executive and the legislature.

In the coming months, we should direct our energies to examining these issues, discussing the options available and addressing the specific concerns of the central government so that a way can be found to move ahead.

The next important signpost would be the method of electing the chief executive in 2007, followed by the Legco election in 2008. A great deal of careful thought needs to be given to how we can realistically make the election of the chief executive more broadly based, open and transparent.

If you care about the quality of life here, and the business environment in which you operate, then you should take an interest in the development of representative government. Hong Kong people ruling Hong Kong means Hong Kong people getting out to vote in September. It means Hong Kong people discussing, debating and agreeing which democratic model best serves Hong Kong's long-term interests, under the umbrella of 'one country, two systems'.

And finally, it means active participation in the political process so that collectively we can safeguard the rights and freedoms we enjoy under the Basic Law, and preserve and enhance those qualities that have turned Hong Kong into an important international financial and services centre, as well as a transport and communications hub. This role is crucial to Hong Kong's long-term survival and prosperity.

Anson Chan Fang On-sang is a former chief secretary. This is an excerpt from a speech delivered at the Life Underwriters Association Convention yesterday