After a promising start, world trade took a dive in 2001/02. Hong Kong SME exporters already hurting from falling worldwide economies were affected even more as the September 11 terrorist attacks accelerated the US into recession, sent Europe skidding and rolled back economic recovery in Asia. Year on year, Hong Kong's exports declined by 5.8 per cent in 2001. Our total trade declined by 5.6 per cent, though we anticipate a return to modest growth in 2002.

In this distressed global business environment, China's expanding market and WTO entry offered the best news - and prospects - for Hong Kong's traders. The granting of permanent normal trade status to China by the US as part of the WTO process was an additional boost, bringing greater certainty to future trade with our two biggest trading partners.

With China's WTO entry, Hong Kong has unprecedented opportunities to interact with the mainland economy and act as a catalyst for China's accelerated integration with the global economy. As the Chairman has said in his message on page 2, Hong Kong is the strongest link in the global supply chain between the world's largest manufacturing basin for light consumer products, the Pearl River Delta, and the world's largest consumer markets. We are also the service platform for the world to enter China's markets, and vice versa.