Hong Kong's economy has undergone a remarkable transformation in the past two decades. There has been a rapid expansion in the services sector. By the end of 1995, this sector generated over 80% of the territory's Gross Domestic Product (GDP). (Even without the public sector, services still accounted for about 73% of GDP.) There has also been a restructuring of the manufacturing industry, as firms move their low value-added work out of Hong Kong and concentrate on high-value, technology-based markets. This restructuring has given Hong Kong both the incentive and the resources to expand its role as a world-class services centre for the next century.

Under business leadership, market forces have driven this profound restructuring of the economy. What dictate the pace and direction of the transformation have been the response of business men and women to changing market conditions and the willingness of the business community to meet new challenges and to seize new opportunities. At the same time, the business community has successfully secured the co-operation of the workforce in moving out of lower value-added manufacturing and into service and technology-based jobs. This combination of business enterprise and workforce co-operation explains why Hong Kong has accomplished the transformation so smoothly and so rapidly.

The Hong Kong Government understands very well that it is not its task to dictate business decisions or to second-guess markets. The Government's role is to keep bureaucratic interference to a minimum and to provide the maximum level of support for business consistent with Hong Kong's long-established and successful free market economic philosophy.

What this means in practice is that the Government must ensure that its policies and programmes are as business-friendly as possible and that it does nothing to hinder enterprise and everything to promote it. The Government has a good track record in its support for manufacturing. But it has paid less attention to the services sector. The Government now needs to review its approach to the services sector to ensure that the right policies and programmes are in place to facilitate its growth and development.

In August last year, the Government established a Task Force on Services Promotion. Its objective was to frame initiatives to ensure that the Hong Kong Government offers the policies and programmes necessary to support the territory's continued success as a major global and regional services centre. This exercise has involved a review of the impact of existing policies and programmes, as well as the identification of new approaches to help the services sector realise its full potential. At the same time, the Task Force has encouraged the private sector to undertake a number of initiatives to reinforce Hong Kong's long term competitiveness.

This document describes the preliminary results of the Task Force's work. The Task Force has produced "Action Agendas" for 14 leading service industries. Each "Action Agenda" records the current standards of the industry's performance. It sets out, where appropriate, key comparisons with the industry's principal competitors overseas. It then summarises the Government's existing level of commitment to the industry, as well as the Government's goals and options for future action in support of the industry. Finally, each "Action Agenda" identifies the longer term issues which our community must tackle together.

There are two vital points about these "Action Agendas".

• First, they act as a basis for dialogue between the Government and the services sector. They are not the end of our work but the start of a closer relationship between the Government and business. The proposals they contain are intended for public discussion. The Task Force will refine and develop them in response to the reaction from the Legislative Council and the business community in particular.

• Second, in updating our support for all sectors of business, the Government remains committed to market mechanisms and to competition. Its economic policies are intended to enable markets to work more efficiently and for Hong Kong businesses to compete more effectively.