It has been a tough 10 years since the handover for former governor Chris Patten's favourite egg tart shop. The Tai Cheong Bakery weathered the Asian financial crisis and Sars epidemic only to be forced out of its Lyndhurst Terrace premises in 2005 amid a wave of severe rent increases triggered by the economic recovery. Owner Au Yeung Tin-yun closed the shop when new landlords raised the rent by more than 100 per cent at a stroke but fought back to reopen four months later in cheaper premises across the road. The reborn Tai Cheong has a sharp new management team - including its own PR and marketing manager - has set up a branch in Macau and foiled a bid by film director Alfred Cheung Kin-ting to take over its famous name. But Mr Au is far from confident his shop will still be in business come the 20th anniversary of Hong Kong's return to China. 'If the rents keep on rising like this and we can't buy our own premises, I will have to retire,' said Mr Au. 'It is affecting all the shop owners and small businesses and shops like mine won't be able to survive. 'My shop is only selling very basic necessities - bread and egg tarts - and I can't increase the price because no one will buy them. In Mid-Levels, only pubs and offices will be left. And only the chain stores will be able to run shops.' The fate of the Tai Cheong Bakery highlights a key challenge for Hong Kong: how to rein back high land and property costs that bring complaints from businesspeople and stifle the city's entrepreneurial culture - without jeopardising economic growth. Former chief executive Tung Chee-hwa tried to curtail soaring property prices in 1997 by announcing a target of 85,000 new flats a year and removing anti-speculative controls. But the measures instead triggered a spectacular property market crash that only heightened the impact of the Asian financial crisis on Hong Kong. Mr Tung went on to do a U-turn as the recession took hold in 2002 and introduced measures to tighten the supply of new properties. Today, with supply still tight and property prices at little over half of 1997 values, the question of how to strike a balance remains largely unanswered. But economists and business leaders insist that Hong Kong's economy is nevertheless poised to remain competitive - both within China and globally. Anthony Wu Ting-yuk, of the Bauhinia Foundation Research Centre, which studies economic competitiveness, said: 'I am optimistic about Hong Kong's economic developments in the next 10 years. 'We are still very competitive in many ways, and we have got most of our business conditions right: our legal and regulatory frameworks, tax regime, openness, market-oriented developments and economic freedom.' Mr Wu, who also is chairman of the Hospital Authority, said the economic rise of the mainland also had created enormous opportunities for different sectors of Hong Kong. 'To maintain our edge in this keenly competitive environment, we must do all we can to excel in our financial services market, which is the most important pillar of Hong Kong's economy.' Last year saw the launch of the first long-haul budget airline from Hong Kong. Despite acute teething problems, Oasis Hong Kong has stepped up the frequency of flights to London and has just launched a second route to Vancouver. Chief executive Stephen Miller admits to being a fanatical supporter of Hong Kong because of its resilience and the can-do attitude of Hong Kong people in the face of challenges such as the handover and Sars. 'I think Hong Kong has proven its role as not only the gateway to China but also the major hub of Asia,' he said. 'It takes a long time to build up this sort of extraordinary connectivity not only with the rest of the world, not only with Asia, but also bringing it into China. I think we are blessed with our geographical location and that's not going to go away. That location in itself safeguards our future.' Allan Zeman, chairman of Ocean Park and the Lan Kwai Fong Association, said: 'I think obviously Hong Kong and China are tied at the hip. Internationally, I think the world is now coming to China. Everyone who hasn't been there wants to be there. And it's working in two ways. China is now going out to the rest of the world as well.' This had created a role for Hong Kong as a channel between the mainland and the world because people felt comfortable doing business here and a lot passed through Hong Kong. 'Because of our legal system, because of our independent judiciary, because of our brand, the world trusts Hong Kong,' he said. 'I mean, 'one country, two systems' has really, really worked. We can see that, 10 years on, everything in Hong Kong is as free as it's ever been before. We have to continue to just stay one step ahead of everyone.' So Hong Kong's economy may be competitive in 2017, but will it also be a better place to live? For Douglas Young, co-founder of designer lifestyle store G.O.D. - the initials are a phonetic match with the Cantonese for 'to live better' - the short answer is: 'Yes.' 'I am an optimist,' he said. 'And one thing that is going to be increasingly significant is the awakening of Hong Kong's cultural identity. I think we have reached a maturity as a society because we are free from the shackles of colonialism and we have enjoyed decades of prosperity. 'I think what we've been seeing with young people these days is sort of interest in our own identity. They don't feel so ashamed of their Chinese heritage. Look at the fight for the Star Ferry clock tower.' Mr Young says that as Hong Kong's identity developed it also would become part of one giant mega-city stretching all the way up the Pearl River Delta to Guangzhou by 2017. 'I don't see Hong Kong being separated from cities like Shenzhen and Guangzhou,' he said. 'It will all become one big metropolis - maybe even all the way to Macau.' He also says 'it's just a matter of time' before universal suffrage comes to Hong Kong because the question 'will just simply not go away'. 'I hope that will come because I think a lot of the problems that the government is facing at the moment stem - maybe at a subconscious level - from the fact that we don't have universal suffrage. 'In Hong Kong there's this mentality of just victimising people, of just blaming the government - even for things that aren't their fault. Because they aren't elected by the general public, we tend to blame them. If it were the reverse, perhaps we wouldn't blame them, because we put them into power.' Fashion designer William Tang Tat-chi said young people trying to get established in fashion and other creative industries faced an array of problems and it was now very difficult to develop a new business. 'When we don't have young and new creative industries, the city can become quite boring, it will just be a city of big brands,' he said. 'When you look at what happens in Korea or in Japan, they really do give so much support to the young designers or creative people, so if Hong Kong wants to be a so-called design city or a creative city, we really have to do something to promote and to help our young talents.' Mr Tang said Hong Kong has a special advantage in fashion design because for at least 35 years the mainland had been 'disconnected with the rest of the world for fashion'. 'We are the only Chinese place that has this tradition and we have a greater variety of fabric than anywhere else in China,' he said. 'So I believe that we should have a museum of fashion and it would be a landmark.' Mr Tang said he would like to see the museum set up in Sham Shui Po, the traditional centre of the cloth trade, and the area to be conserved, enhanced and made more accessible for visitors. When it comes to Hong Kong's quality of life in 2017, no one has a bad word to say - apart from the need to improve air quality. Mr Tang said it was so easy to get about to neighbouring cities and we had the sun, the sea and the hills as well. 'I find Hong Kong is really incredible and is a better and better place to live. I don't see any city in the world where you can enjoy a metropolitan life as much.' Mr Zeman said: 'I think in 2017, as today, Hong Kong needs to be known in the world as one of those great romantic cities. It's a great place to do business, it's a great place to live and it's very vibrant. It's really an entrepreneur's dream.' But will ordinary Hongkongers be able to share in that dream, if the city cannot sustain its greatest egg tart shop? Mr Au does believe things are looking up now under Chief Executive Donald Tsang Yam-kuen and he still has a tiny shred of hope left - despite his fears about rising rents. 'If Mr Tsang can keep this going and the economy improves, maybe my shop will be maintained,' he said. 'I hope that it will still be standing in Lyndhurst Terrace. In the year 2017, the press can come over and see if Tai Cheong Bakery is still here.' 1 Shrinking harbour Only last year, retired High Court judge Simon Li Fook-sean predicted we would soon be able to walk from Hong Kong Island to Kowloon. Will this be the case by 2017? The government says this will not happen. But harbour activists fear the administration's insatiable appetite for reclamation will persist until it leads to the slimming down of Victoria Harbour - the city's most prized asset. 'As [Chief Executive] Donald Tsang [Yam-kuen] pledges to develop Hong Kong as an international commercial centre, waterfront land in Central is undoubtedly the government's target,' said Hong Kong Institute of Planners vice-president Pong Yuen-yee. 'To achieve this development goal, the government may reclaim more land and build more offices in Central, the most valuable land in Hong Kong,' Ms Pong said. Legislator Alan Leong Kah-kit said the government's never-ending demand for reclaimed land was not right. Since land reclamation began in 1851, the harbour has shrunk to half its original size. More than 7,000 hectares of land, or 7 per cent of Hong Kong's total land area, have been added to the waterfront for various developments, including Two IFC and the Hong Kong Convention and Exhibition Centre. 'If you go to The Peak and look down, Victoria Harbour is already a river and our harbourfront is known as the ugliest in the world,' said Christine Loh Kung-wai, head of the think-tank Civic Exchange. A Planning Department spokesman said the government agrees that Victoria Harbour should be protected. 'The government will abide by the Protection of the Harbour Ordinance and the Court of Final Appeal's judgment,' he said. Despite a 2004 Court of Final Appeal ruling against further reclamation, the Civil Engineering and Development Department last August submitted a proposal to the Town Planning Board to build a bypass involving 15 hectares of reclaimed land between Central and North Point, to be completed by 2015. 2 Breathing easier With mounting concern over worsening air quality, will Hongkongers need to wear masks by 2017 as we did during the Sars epidemic in 2003? This is the worry of Green Student Council chairman Angus Ho Hon-wai, who predicts that purified air will be sold on the streets in the near future. 'We fear that pollution won't reduce, as the track record shows progress on improving air quality was very slow in the past,' Mr Ho said. Friends of the Earth released figures two weeks ago showing that haze blanketed the city on more than twice as many days last year than in 1997. Director Edwin Lau Che-feng said low visibility was recorded once every nine days on average in 1997, but the frequency of low visibility climbed to once every three days last year. A key source of much of the smog has been traced to industrial areas near Shenzhen. The Hong Kong government last year launched a high-profile environmental campaign, Action Blue Sky, and pledged to cut emissions in the Pearl River Delta in co-operation with the Guangdong government. Despite these efforts, the latest official report from the Guangdong environmental protection bureau said air quality in the province had continued to worsen. Legislator Choy So-yuk and Greenpeace campaigner Gloria Chang Wan-ki nevertheless are optimistic the pollution problem can be turned around. 'We have sufficient time to improve the air quality in the next 10 years,' Ms Choy said. Ms Chang said there had been a unanimous outcry from the business sector, academics and civil society to improve air quality. 'The government has no excuse to turn a blind eye,' she said. 'As a leader of responsible government, Chief Executive Donald Tsang [Yam-kuen] must face the air pollution problem and fix it in his term.' Both Ms Choy and Ms Chang believe the burning of coal as well as the use of polluting vehicles will probably be phased out by 2017 owing to advances in technology. 'We expect roads will be free of polluting vehicles,' Ms Chang said. 3 Grey power Hongkongers are among the most long-lived people in the world and, in 10 years' time, they will be living even longer. The life expectancy of men is set to rise from 78 to 80 while that of women will increase from 84 to 86, according to the Census and Statistics Department. The ranks of elderly people - aged 60 and older - will grow more than 50 per cent by 2017 from 1.1 million to 1.7 million as a demographic bulge works its way up through the generations. But Christine Fang Meng-sang, chairman of the Hong Kong Council of Social Service fears that rather than prospering as they live longer, a growing number of elderly people will fall into poverty. 'We are worried about the issue of elderly poverty that will worsen in 10 years time with a growing number of aged people who do not have the resources to prepare for old age and don't have a pension scheme to protect them,' she said. The council predicts the number of elderly people receiving the Comprehensive Social Service Allowance will rise from 187,140 to 345,000 by 2017, increasing the burden on the government to HK$14.5 billion a year from HK$7.9 billion. Anthony Hedley, chair professor of community medicine at the University of Hong Kong's School of Public Health, said elderly people also would face more health problems by 2017 and should be allowed to work longer so they remained active and could continue earning. 'I think the retirement age will be at least 65 by 2017,' he said. While the city's marriage and fertility rates are declining, an estimated one in four women are expected to remain permanently single. Paul Yip, of the University of Hong Kong, said declining fertility, rising health-care costs and migration posed a three-fold challenge to Hong Kong's economic prospects. Dr Yip said Hong Kong's ability to compete depended upon its ability to transcend protectionist sentiment and encourage positive inward migration, while it also needed to retain highly educated residents. Ms Fang said: 'The growth of grey power and the silver market are global trends. With their years of experience and wisdom, elderly people are an asset in the community.' 4 Medical cover All Hongkongers will be covered by medical insurance in 10 years' time, according to medical experts. And the majority of the city's doctors will be female. 'By then, about 60 to 70 per cent of doctors will be female,' said Louis Shih Tai-cho, vice-president of Hong Kong Medical Association. Dr Shih said more than 50 per cent of medical students at Chinese University were female, compared with less than 20 per cent about 30 years ago. Hong Kong University figures also indicate an increase in the ratio of women medical students. After decades of debate, Chief Executive Donald Tsang Yam-kuen pledged that medical reform would be the first priority in his new five-year term. This would include investigating the suitability of a contributory medical savings scheme for individuals. 'In 10 years, the medical financing plan will be put in place,' Dr Shih said. Most Hongkongers would be covered by insurance and the cost of accident and emergency services would be more than HK$500 a visit, he said. The cost of medical care would keep rising because of the ageing population and technological advances. Dr Shih said residents could not rely on the public health system to provide heavily subsidised medical services in the future. A Hospital Authority spokesman agreed medical costs would rise and that everyone would be covered by some form of medical insurance by 2017. Patients' rights advocate Tim Pang Hung-cheong worried that the quality of health care would fall, especially for the poor, as a result. 'Facing the rising medical costs, the government has capped medical expenditure to a certain percentage of the budget. More and more people will share that money because of the ageing population. The quality of health may be compromised,' he said. 'Hongkongers will live longer but not healthier as they will expose themselves to more health risk.' 5 Class action Class sizes will be smaller by 2017 - at least in the senior secondary years, one leading school principal predicts. But it will be more a side effect than a direct result of the government's education reform programmes, according to Sister Margaret Wong Kam-lin, principal of St Paul's Convent in Causeway Bay. Schools will recruit extra teachers for a 'double-cohort' of students in 2012, when they will have to accommodate both the last Form Seven students taking A-levels and a much larger Form Six group taking Hong Kong's new school-leaving diploma. Some of the extra teachers will still be needed the following year, but others will not because Form Seven classes will cease. The principal said the government would take advantage of the extra teachers - along with falling school rolls due to the declining birth rate - to gradually cut class sizes in senior secondary classes. Classes currently average 38 students in Form Five and 30 in Form Six and Form Seven. The first university students to complete their studies under the new system will graduate in 2016. She said they would be 'more well-rounded, flexible, skilled individuals' who would be ready to adapt to 'the fast-changing, knowledge-based society of the future'. Peter Hill, secretary-general of the Hong Kong Examinations and Assessment Authority, said students would face less exam pressure by 2017 because there would be more university and college places and students would be allowed to defer entry into subjects like medicine and law. 'Learning in schools will become a more dynamic activity with greater emphasis on thinking, problem solving, communicating and researching issues,' he said. 'The curriculum also will become more international in flavour and less subject-based than it is currently. Many students will study overseas for a period of time and all students will have their own personal computer linked to the internet.' 6 Property premium As Hong Kong's rich get richer and poor get poorer, top-end property prices are set to soar far above those of the mass residential market in the next decade. Gordon Tse Tze-man, corporate development director at Midland Realty, expects Hong Kong to attract more highly skilled professionals, increasing demand for flats in places such as Mid-Levels and West Kowloon. 'I guess we are likely to see the prices in those areas outperform the mass residential market,' he said. It all comes down to supply and demand. 'Looking forward, I think the housing prices for the top-end sector could see further growth, because one thing is the scarcity of supply,' said Simon Lo Wing-fai, director of research and consultancy at Colliers International. For those who can afford them, said Mr Tse, more spacious apartments will be in demand by 2017. 'In Hong Kong, the area occupied by a single person increased by nearly 23 per cent over the past 20 years,' he said, adding that if the trend continues, that number could increase by a further 10 per cent over the next decade. But Mr Lo says rising prices in the property market might do just the opposite for the average consumer by 2017. 'For the average Hong Kong household, I think if property prices go up further, the demand for smaller units will see a substantial increase.' And of course in this property-driven town, a booming market means more prosperity for the likes of Li Ka-Shing (pictured). If the government were to relax height regulations, Hong Kong could see apartment buildings between 60 and 80 storeys high in 10 years, says Mr Tse. Yet problems would remain. 'The government may have to consider the height of a building because if it is too tall, it will block the view of the other residents. It also creates an environmental problem with airflow.' Yet for consumers seeking a home in the Mid-Levels in 2017, a key problem may be affordability. 'It will become less affordable for the general public. It will be the market for wealthy people,' Mr Tse said. And if Hongkongers can't afford the high property prices in 2017? Go to the government for help, or go to Shenzhen,' Mr Lo said. 7 Language lessons Whether it becomes the language of Hong Kong politics, business or everyday conversation, one thing is certain: Putonghua is the language of tomorrow and in 2017, more Hongkongers will be speaking it than ever. 'By that time, probably, people will be even more able or proud of using Putonghua,' says Chan Shui-duen, head of the Department of Chinese and Bilingual Studies at Polytechnic University. 'In fact, the drive comes from the business sector,' she said, adding that many of the university's graduates work or live on the mainland. The result, says Professor Chan, has been full Putonghua classrooms at the university and more and more students, even primary youngsters, sitting for Putonghua tests. Mandarin instructor Lunlun Zou, founder of private language school Mandarin Master, says more parents than ever understand the value of Putonghua for their children. 'In the future, I think that young people [will] need to know more Putonghua so they can travel to places in China, and to know and understand China,' she said. By 2017, Ms Zou predicts that more children and teenagers will start learning Putonghua, more adults will be able to speak it, and more foreigners will have the opportunity to practice it in Hong Kong. At the university level, Professor Chan says there will be more grade A Putonghua students entering higher education. 'I would predict that most of the university students will be able to communicate in Putonghua at least in simple conversation, for essential daily communication.' On a global scale, Putonghua is set to get tongues wagging. Like Spanish and English, Professor Chan has predicted that Putonghua will become an international language. And its world status by 2017? 'I think it will be among the most important languages,' she said. 8 That vote Some Hongkongers may have been waiting for more than two decades for universal suffrage, but pro-Beijing politicians will tell you the issue will still be a 'work in progress' by 2017. Ask pan-democrat politicians and they will assure you with confidence that the ultimate goal can be achieved by then, even though they have had a number of setbacks since 1997. 'By 2017, we will have our long-awaited universal suffrage, both for the chief executive and Legislative Council,' said veteran democracy campaigner Martin Lee Chu-ming, who is now pushing for full democracy in 2012 with his allies. 'Hongkongers have been waiting for so many years. Even one day's delay is too long.' Civic Party legislator Alan Leong Kah-kit, who stood in the chief executive election earlier this year, is confident, too. 'We will see our second run of a Legislative Council election, in 2017, with universal suffrage,' he said. Chief Executive Donald Tsang Yam-kuen has pledged to resolve the issue in his new term which ends in 2012, but has not offered any timetable on when full democracy would be introduced. Choy So-yuk, lawmaker from the Democratic Alliance for the Betterment and Progress of Hong Kong, believes the chief executive will be elected by 2017. 'But I believe the chance of a fully elected Legislative Council is rather low,' she said. Christine Loh Kung-wai, the head of think-tank Civic Exchange, said there would be progress if the mainland leadership decided to use Hong Kong as an experiment to test universal suffrage in 2017 for the chief executive and to reduce the trade-based functional constituencies in 2016. Popular opinion seems to be that we can expect to see progress towards democracy, but it won't be the end of this marathon campaign. 9 Currency question Ten years ago, 100 yuan was worth anything from HK$90 to HK$93, says Loida Serote, a cashier who has worked at Chequepoint since before the handover in 1997. Today, 100 yuan will buy nearly HK$103, and Ms Serote predicts that in 2017, you might even get HK$110. 'I think renminbi is going to be really strong compared to the Hong Kong dollar in 2017,' she said. The power of the yuan is a boon for mainlanders, but the future may not be so lucrative for Hong Kong residents. 'Because China is still doing very, very well in international trade and has big trade surpluses, the renminbi will just continue to appreciate for quite a while,' said Francis Lui Ting-ming, professor of economics at the Hong Kong University of Science and Technology. Professor Lui felt HK$1.60 to 1 yuan was a 'pretty good estimate' for the currency ratio in 2017, though he said making a 10-year forecast was a tall order. Though the 26.2 billion in yuan deposits in Hong Kong is just a drop in the bucket of total foreign currency deposits, he says yuan holdings will increase as Beijing relaxes its caps on deposits. 'After five or even 10 years, it could be more than 10 times the amount of today.' That amount of money talks and Hong Kong residents are likely to take note and cash in by 2017. 'Maybe they're thinking that later on the value of the renminbi will still be rising,' said Ms Serote, addressing the likelihood of Hongkongers opting to hold yuan deposits. 'So it's really a good investment for them.' In the meantime, the Hong Kong dollar's peg to the US currency will stay, said Professor Lui. 'If it is desirable to peg the Hong Kong dollar to the renminbi, we need the renminbi to be fully convertible internationally, and at the same time, the management of the renminbi must be credible,' he said, adding that 10 years might be too soon for this to have happened. As Chief Executive Donald Tsang Yam-kuen has said, there are no plans to change the US dollar peg, and according to Professor Lui, any change is unlikely even after 2012. 'Even for the next chief executive, I believe that in all likelihood, it will be the same thing,' he said. 10 Gold standard With the Beijing Games approaching, Hong Kong is awash with Olympic spirit, but will its own talented sportspeople cycle, volley, or windsurf their way to a gold medal by 2017? Lee Lai-shan, windsurfing queen and Hong Kong's first and only Olympic gold medallist, is certain her own medal won't be Hong Kong's last glimpse of gold. 'There will be more in coming years,' she said. The 2008 Games may be Hong Kong athletes' best chance for a medal, according to San San, with Beijing like a 'half-home town' - a place where Hong Kong athletes can feel the rush of local support. 'It's like you're competing at home,' she said. Timothy Fok Tsun-ting, president of the Hong Kong Sports Federation and Olympic Committee, also has high hopes for Olympic success in the coming decade. 'Certainly, I hope by 2017 we will do very well, but then I'm very focused at the moment,' he said. 'And next year we're going to have the Olympics in our national capital. And I think we will give our girls and boys the greatest support.' Sportspeople everywhere were firmly focused on the 2008 Olympics, said Chan Chi-choi, head coach of the Hong Kong badminton team. 'To get a medal is our target,' he said. 'It's our goal. Now we will try our best. I believe the Hong Kong delegation will get a medal, I can't guess the colour.' Future gold medals hinge on keeping the best and brightest athletes, Chan says, adding that more sports money from the government is helping - and is likely to continue. But San San says it is not enough to just throw money at the problem. Athletes need retirement funding plans and flexible education options, so parents won't see a career in sports as a dead end for their children. 'I can see there are a lot of hurdles to getting new people into sports,' she said. Whether athletes are able to soar past these hurdles by 2017 will come down to how much effort the government puts into addressing these issues, she said.