The outpouring of public discontent which alarmed Chief Executive Tung Chee-hwa and his administration on July 1st may prove to be one of the most decisive events in Hong Kong's history. It gives us an opportunity to put the past behind us, and focus on our common goal - economic recovery.

Once that is underway, we can concentrate on other vital issues that helped to make this city the financial powerhouse it used to be. That reputation grew because - alone in South Asia - ours is a free society, protected by the common law, with a diverse press, offering the unimpeded flow of information vital to the business community, and where people of opposing views can argue vehemently about policy without falling out or disturbing the social order.

If Mr Tung faithfully honours his pledge to be more sensitive to his people's wishes, he will undoubtedly find his job a lot easier, and his public image improved.

But he must first recognise that all the members of his legislature share the same aim - to help their city back to prosperity, even if they have opposing views on how to go about it. Lawmakers are representatives of the electorate, and if they are sidelined, their supporters feel similarly ignored. No government can make progress like that. But opposing parties must also try to be more supportive, instead of trying to be an opposition party all the time.

Key to Hong Kong's woes is the collapse of the property market. It continues to fall, in spite of Secretary for Housing, Planning and Lands Mr Michael Suen's nine measures. Further action is needed. Both MTR and KCRC must be stopped from building flats until the market has recovered. Developers must be allowed greater flexibility in releasing property for sale, so that they can respond to free market forces. There should be an end to land sales until prices recover. Government should also expand the immigration and investor scheme, currently set at HK$6.5 million for foreigners only, to include Mainland residents.

I have urged these moves for months, but the hallmark of government policy is either too much caution when the situation cries out for decisive action, or a heavy-handed approach trying to impose deeply unpopular policies upon a hostile public.

In my view, it was often the approach itself, rather than government planning, which caused discord. Many actions were perfectly sound. If Mr Tung and his inner circle spent less time in discussion, and allowed policy secretaries more time for public consultation and selling their proposals so they had a better chance to explain the government's intentions, they could perhaps get citizens on their side, conflict might be avoided.

Article 23 is a case in point. Trying to rush such a contentious law through the legislature when many moderate voices were warning that it would result in a badly drafted bill was a serious mistake. But it is one which promises to have a positive outcome. With his undertaking that there will be ample time to explain to the public and to iron out any anomalies in the bill next time, Mr Tung should be able to set minds at rest, and convince citizens that their fiercely guarded freedoms are not under threat.

But Mr. Tung's most immediate task is to replace the officials who had resigned. He must choose people of known ability and integrity who have the confidence of the people, and who in turn respect the legislators and citizens they serve. They must have excellent public relations skills, and patience and understanding in dealing with the natural anxieties of politicians and media. Above all, they should be in touch with public opinion, and not afraid to give frank advice, even when at odds with government's preferred policy. The best advice is not always the advice that leaders wish to hear.

If Mr. Tung is willing to fill these posts with individuals of high standing, he will have won the first battle to regain public support. The Financial Secretary's job can be filled from the private sector, because experienced professionals understand the complexity of the real market perhaps better than civil servants. But the job of Secretary for Security would be better filled from within the civil service, since it involves handling extremely delicate security material that needed absolute confidentiality.

There are still many challenges ahead. However, things will start to improve if the economy picks up. In his Beijing meeting with President Hu Jintao and Premier Wen Jiaboa, Mr Tung won support for extra concessions under CEPA, to help sustain the modest recovery now underway. China's economy is booming, and while the mainland flourishes, Hong Kong can surely share in the benefits. If other concessions come into force, such as allowing banks a trial run in dealing with personal yuan business, our economy will be given a real shot in the arm.

Backed by Beijing's support, and through closer co-operation with Guangdong - which is also thriving - it should not be too difficult to restore our position as the cosmopolitan city and financial centre of China and Asia.

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