'At a time when Hong Kong needs to respond swiftly to our country's rapid economic growth and changes in global business, I am confident that Mr So, with his wealth of experience in marketing Hong Kong around the world, is exceedingly well equipped to lead the TDC in the demanding task in the next two years,' Chief Executive Donald Tsang Yam-kuen said.

The challenges facing Mr So include helping Hong Kong-invested factories engaged in the processing trade across the border - which have been hit by new central government rules and by the recalls by US toymakers of millions of mainland-made toys - and fighting off competition from Macau for exhibitions and conventions.

Secretary for Commerce and Industry Frederick Ma Si-hang said last week that competition in the exhibitions and conventions industry had heated up since the recent opening of several new venues in Macau.

Last week the Venetian Macao casino resort opened, providing 1.2 million sq ft of convention space.

A TDC source said its strategy for promoting Hong Kong business, products and services might be changed under Mr So's chairmanship to handle the 'complicated situation'.

The government spokesman said Mr So, formerly MTR Corp chairman and chief executive and deputy chairman and managing director of PCCW, was highly regarded by the local and international business sectors and had an excellent record of trade promotion and public service, having served as the council's executive director from 1985 to 1992.

Mr So is the chairman of the Film Development Council and a non-executive director of HSBC. He was recently appointed an adviser to China Netcom.

Mr So has reportedly been approached by the central government to stand for election as a Hong Kong deputy to the National People's Congress in March. As an alternative, he may be offered an appointment as a delegate to the Chinese People's Political Consultative Conference.

A source close to Mr So said that he might prefer accepting a CPPCC seat to running in the NPC election, though he had not decided.

In a statement, Mr So cited his experience in private companies and knowledge of the TDC, and said: 'I will be able to help the TDC team create further opportunities for Hong Kong companies and identify the future direction for Hong Kong's business with our trading partners worldwide.'

Mr Woo said his successor was no stranger to the TDC and was an excellent choice for the chairmanship. Mr Woo, who has been chairman of the TDC since 2000, is seen by some as a possible candidate to succeed Mr Tsang as chief executive in 2012. He challenged Tung Chee-hwa in the first chief executive election in 1996.

Yesterday Mr Tsang praised Mr Woo for having effectively promoted Hong Kong as a business springboard to the mainland and raised Hong Kong's business image internationally.

Mr Woo, the chairman of Wheelock, is a member of the standing committee of the CPPCC. He is also the chairman of the Hong Kong-United States Business Council's Hong Kong section.