Competitiveness is a slippery concept, despite the many attempts to define it. As Hong Kong frets about falling behind, the best way of sizing up the qualities that keep us ahead might be to reflect on how, time and again, we have pulled ourselves out of adversity. Ten years ago, on the eve of our reunification with China, few would have confidently predicted that we would be doing so well. Despite our polluted air, problems with education, and a port that is losing its leading position - issues this newspaper has explored in an in-depth series over the past week - Hong Kong remains a vibrant economy ranked as one of the freest and most competitive in the world. Our current state is all the more miraculous, considering what we have gone through. No sooner had Hong Kong entered a new era under Chinese sovereignty in July 1997 than the Asian financial crisis struck. As our financial markets were battered by panic selling, bird flu struck twice in 1997 and 1998. Then Sars attacked with enormous ferocity in 2003. The administration's clumsy handling of some of these emergencies often made them worse. From one crisis to another, however, the population stayed put, in the firm belief that the institutions that prescribe order in our daily life and protect our well-being would remain intact. Though real estate values shrank, no one had to worry that our hard-earned wealth would evaporate because of institutional blunders. Indeed, the absence of bank failures during the financial turmoil is a little-remarked testament to the strength of Hong Kong's financial system. At the height of the Sars outbreak, none of our health-care workers shirked their responsibilities. When we felt aghast at our government, we knew we could vent our feelings through an unfettered media. The constant stream of bad news was unnerving, but we relished in not being drowned by a false sense of insecurity, as was the case on the mainland where the authorities had a policy of covering up. The integrity of our institutions has emerged as our greatest strength and the source of our competitiveness. Hong Kong has remained an ideal business centre, as the free flow of information allows people to make informed decisions and the rule of law protects their fundamental rights. This soft infrastructure is more important than the fancy hardware, be it soaring skyscrapers or modern ports, that countries in the region like to boast is their competitive advantage. Cleaning up our filthy air, raising the quality of our workforce and maintaining the integrity of our legal system and free flow of information are critical if Hong Kong is to stay ahead. Government and politicians must also maintain our business-friendly environment by restraining increasingly interventionist sentiments. Above all, Hong Kong needs to face up to the challenges posed by an emerging mainland, through deft management of the flow of people, goods and capital across our border with the mainland - a border that is both a blessing and a curse under the policy of 'one country, two systems' that makes us a special part of China. We want the best brains from the mainland to boost the quality of our workforce, but not poorly educated peasants who would pull down wages for our unskilled workers. We want mainland exports to come through our port, without abandoning our status as a separate customs territory. We want our rich mainland compatriots to invest their money in our markets, but we do not want those with no money to come here to become a drag on our welfare regime. By and large, the current state of the border enables us to enjoy the best of both worlds. But that won't last forever. When the barricades are removed, we will have nothing to shield us from competition from the north, except the intangible institutions that distinguish us from other parts of the nation. Enhancing them must be our first priority in playing the competitiveness game.