A decade on, Hong Kong is in good shape. We remain a vibrant cosmopolitan city, stable and prosperous. Our way of life has been maintained and continues to evolve. Our resilience has been tested by challenges the doomsayers did not predict. But we have emerged stronger for having met them. And we have a vision of our place in the world as a new economic order emerges from the rise of China. Our uniqueness as an international city and centre of trade and finance has remained one of our key strengths. Our city still has an international character, although its composition has changed. What we have lost in the number of westerners is compensated for by an influx of expatriates of more diverse origins. The local population, too, has been enriched by a growing number of returnees and people who have furthered their education overseas. The 'one country, two systems' concept can therefore be declared a success, although there have been times when tensions have arisen between the two systems. It is easy, 10 years on, to forget all the doubts and uncertainties that existed before the handover. They included predictions of a widespread crackdown on our freedoms. Some warned that the PLA would crush demonstrations. There would be no more June 4 vigils to commemorate the Tiananmen Square victims. Others said political parties would be shut down and freedom of expression and a free press curbed. Expatriates would leave, it was feared, turning Hong Kong into just another Chinese city. Core values intact Despite all the controversy and heated debate surrounding the handover, Hong Kong's core values have remained intact. The rule of law, free speech, freedom of association and free markets have all survived. To be sure, half a million took to the streets on July 1, 2003, to protest against proposed national security legislation. But their voices were heard and the bill shelved. We also had a constitutional crisis over a landmark human-rights case in 1999 in which our top court ruled against the government on the right of abode. The government sought an interpretation from Beijing on relevant parts of the Basic Law, raising concerns about the integrity of our legal system and the rule of law. The interpretation reversed some of the court's core rulings, but restraint on both sides has since prevented a similar crisis from arising again. Although there have been two further interpretations, a consensus appears to be emerging that Beijing should only use this power in exceptional circumstances. While we continue to enjoy our fundamental rights and freedoms, there has been little progress towards universal suffrage. Political reform has been stalled by Beijing's interpretation of the Basic Law in 2004, followed by the democrats' rejection of modest reform proposals the following year. And we have recently been reminded that the extent of the high degree of autonomy guaranteed in the Basic Law is subject to the central government's approval. Looking ahead, there is a need for Hong Kong to try to forge a consensus on the road map and timetable for attaining full democracy, so that the ultimate goal of universal suffrage, provided for by the Basic Law, can be achieved. The main aim of 'one country, two systems' was to preserve Hong Kong's capitalist system. That sounds ironic today. With the economic reforms on the mainland over the past 20 years, it can be argued there is only 'one system' now - capitalism and globalisation. Hong Kong may be rated the world's freest economy by many think-tanks, but the new frontier of capitalism is to be found on the mainland, with its unbridled worship of money. As China continues to emerge as one of the world's dominant economic powers, Hong Kong's future is closely linked to how well it integrates with the mainland and plays a key role in the nation's development. Fresh challenges Chief Executive Donald Tsang Yam-kuen has outlined a vision of a city with a population of 10 million, compared with 7 million now, capable of matching New York and London as a global financial centre. While he might have erred in putting the emphasis on boosting numbers, he is right to note that Hong Kong needs to be able to draw on a much bigger talent pool from the mainland as well as overseas. Hong Kong was propelled into the ranks of world cities by the hard work, self-reliance, enterprise and optimism of its people. After the handover, these qualities stood the city in good stead as it overcame unexpected difficulties, such as a prolonged economic downturn and a severe public health crisis during the Sars outbreak. Talk of Hong Kong being marginalised by the mainland's growth cannot be dismissed too lightly, however. Continuous efforts are needed to ensure our city remains competitive and an attractive place in which to live and work. Ten years ago, the focus was on ensuring the characteristics that made Hong Kong successful would continue after the handover. Now, as we look ahead, the emphasis has changed. While sustained efforts are needed to keep our core values firmly in place, fresh challenges are on the horizon. Building on what has been achieved over the past decade, Hong Kong must act decisively to enhance its status in a rapidly changing world.