Ladies and Gentlemen, I am very honoured to have the opportunity to address such a distinguished audience of university presidents, vice-chancellors and accomplished scholars from around the world. I must congratulate theAssociation of University Presidents of China on its achievements since its establishment in 1997. [TONE]∥[TONE] It is the first association of its kind, and it will be a strong force for enhancing academic cooperationbetween Hong Kong and the mainland and between China and the world. I also applaud the Associationfor organising this meaningful event which draws together so many top brains from around the world. Thesynergy it generates will point the way for the development of the global tertiary education sector into thenext century. [TONE]∥[TONE] Today, whilst innovation and technology are the driving force of the world and fuel its engine, it is thepeople that make the engines work. We wish to see in our younger generation an all-round developmentcovering ethics, intellect, physique, social skills and aesthetics. We wish to see in our younger generations theability to assimilate modern technology and ideas. [TONE]∥[TONE] We wish to see in our younger generation creativity, critical thinking and a global outlook. We wishto see in our younger generation a strength of character, a spirit of enterprise, the desire for continuousimprovement and the versatility to cope with the changing needs of our community. And we wish to see inour younger generation a sense of responsibility towards one's own family, one's own community, one's owncountry and indeed the world. [TONE]∥[TONE] In Hong Kong we strongly believe education enables us to cultivate these noble qualities in our nextgeneration. Education also creates and expands the pool of talents to maintain Hong Kong's economicdevelopment and international competitiveness. That is why education is always one of our top priorities and continues to be the single biggest item of the Government's budget, accounting for 19% of our total public recurrent expenditure. Despite the economic downturn, public expenditure on education will have about 8%growth in real terms in this fiscal year. [TONE]∥[TONE] Our best universities are among the top ten in the region, and our best students are among the best in theworld. However, the success ofHong Kong lies in our flexibility to respond to changes and our determinationfor improvement. We have to inject new life into the whole education sector. To achieve this, we areundergoing major reforms in our education system, our examination system, our education regulators, ourschools, our teachers and, above all, our attitude towards education. [TONE]∥[TONE] Education is a continuum. The inputs into the tertiary sector are the outputs from the school sector. Wehope that several years down the road, the tertiary sector is able to reap the benefits from our reforms in thebasic education sector which we are now embarking on. But universities cannot simply wait. They have toensure that their current outputs, that is, their graduates and their research work, meet the aspirations of thecommunity. [TONE]∥[TONE]