Donald Tsang Yam-kuen yesterday declared the end of 'positive non- intervention', a policy that has previously been hailed as a pillar of Hong Kong's economic success. The chief executive sealed the nail in the coffin of the policy at a question-and-answer session at the end of the high-level summit held to discuss how Hong Kong could seize opportunities from the mainland's 11th five-year plan (2006-2010). 'Everybody says Hong Kong has a 'positive non-intervention policy'. The policy was put forward a long time ago by a financial secretary, Sir Philip Haddon-Cave. All along, we have never said we'd made it a blueprint for our economic development,' Mr Tsang said in response to a question on whether the administration had adjusted the policy. 'What we have done in practice - and if you remember the direction outlined by former financial secretaries - is adhere to the principles of 'big market, small government'. The government will try our best to meet the market's needs.' Asked why the policy was still taught in schools, Mr Tsang said: 'They teach it wrong.' The chief executive then cited assistance to industries and special arrangements on land uses as measures indicating the government's departure from the policy. Introduced by Sir Philip, financial secretary from 1971 to 1981, the policy of 'positive non-intervention' has been the ideological foundation for the city's laissez-faire economic approach. The policy limited the government's role to responding only when industries with social obligations ran into trouble and when an institution needed regulation to prevent inequitable practices. Mr Tsang did not specify when the policy founded by Sir Philip, whom he once called his idol, ceased to exist. But since the handover, government officials have tried hard to convince the international community of Hong Kong's determination to uphold the policy, particularly after its intervention in the stock market during the 1998 Asian financial crisis. In his 1998-99 budget speech, Mr Tsang himself made reference to the importance of the policy. He said a review of the currency defences after the Asian financial crisis had 'reinforced our conviction that we must maintain sound macroeconomic fundamentals in terms of a consistent monetary policy, prudent fiscal discipline and a non-interventionist economic philosophy'. The International Monetary Fund has also underlined the importance of the policy to the city several times in its post-handover reports. Since the handover, the government has been under pressure, particularly from politicians closely affiliated with Beijing, to abandon the policy and adopt a more hands-on approach, such as reviving Hong Kong's declining industrial sectors. Later in last night's briefing, Mr Tsang said the government would follow the principle of 'small government' but would not simply adhere to established rules. 'But, of course, our resources are limited. We are very mindful of the fact that the SAR government cannot compete with the business sector in the market place,' he said.