THE BIG PICTURE 'Although our economy is back on an upswing and the fiscal position of the government has improved, we are still faced with many challenges. Being highly externally-oriented, our economy is very sensitive to outside factors such as oil prices, fluctuations in US dollar exchange and interest rates, the pace of the mainland's economic growth and changes in its policies. The development of the mainland has also emerged as a strong competitive force for Hong Kong, threatening even some of our industries which had long had an edge over our competitors, such as logistics. Furthermore, increasing globalisation has a continuous impact on our strengths. There are also potential problems in the local economy. For example, unemployment in certain industries remains high, our economy is undergoing adjustment and the problem of the structural deficit has yet to be resolved. On the other hand, as our economy continues to improve, we must assiduously monitor inflation and property price movement, so as to avoid a major increase in business costs. In the face of these challenges, we cannot afford to let our guard down. Instead, we should constantly try to innovate and seize every opportunity. For the government's part, we will uphold the principle of 'market leads, government facilitates' and actively promote economic growth by facilitating the development of the market and providing a favourable platform for the business community.'