Hong Kong enjoys favorable factors to turn crises into opportunities, despite the downturn of its economy resulting from the financial tsunami, a senior central government official said on Wednesday.

"For Hong Kong, the basis for a stable economy is still solid," said Gao Siren, director of the Liaison Office of the Central People's Government in the Hong Kong Special Administrative Region (HKSAR), at a reception to celebrate the Chinese Lunar New Year.

The reception was attended by more than 4,000 people, including HKSAR Chief Executive Tsang Yam-kuen and foreign diplomats in Hong Kong.

Since the second half of last year, the financial tsunami has cropped up and spread quickly, severely affecting the world financial system and real economy. Hong Kong, as an international financial hub and a highly open economy, has been inevitably affected with its stock and real estate markets going down and unemployment rate rising.

"It's not hard to forecast that the year 2009 will witness severe challenges the country and Hong Kong face in their development and that it will be a year for us to trudge along amid crises," said Gao.

However, the director pointed to the fact that the HKSAR government has greatly improved its awareness, expertise and capability in terms of coping with financial risks since the Asian financial crisis in 1997.

With sufficient fiscal and foreign reserves, an expanded bank capital volume, an overall stable finance, and an improving cooperative mechanism with the mainland in co-dealing with crises, Hong Kong enjoys much better risk-resisting advantages, both internally and externally, he said.

More importantly, Hong Kong enjoys the system advantage of "One country, two systems" and always has the strong support from the motherland in overcoming various difficulties and hardships, Gao noted.