However, I think changes in the e-direction are absolutely necessary and beneficial to Hong Kong. There are some very strong e-investors out there with clear long-term visions and sound corporate strategies that should ensure ultimate success. But to ensure the process of change is effectively managed. I realise the Administration has a lot of work to do. I also earnestly hope the HKSA can lead the changes rather than standing back and observing the changes that are already occurring. There is much to gain if we adapt quickly.

The e-revolution is so important that I consider it part of the 'millennium shift' that is happening. It was also a central theme in my recent budget speech. Notwithstanding, I have devoted substantial amount of time to working with members of our Information Technology (IT) Interest Group and WebTrust Committee to get the Electronic Transactions Ordinance drafted in time for the launch of our WebTrust Scheme.

I also wrote two article in leading Chinese newspaper in March to urge the Government to establish proper corporate governance reforms and manage the obvious risks of emerging IT stocks - I shall be instigating a motion debate on the subject on 3 May 2000, which will be highly publicised.

In terms of e-commerce, it is useful to take a slightly wider perspective of Hong Kong when considering it for a platform from which to conduct e-business. We should try to capitalise on our existing strengths and also remind ourselves of the many weaknesses that must be overcome.

It is a common fallacy to assume that the start up of e-commerce is simple and that it requires little capital. True enough, some small shops with bright ideas do sometimes make it to the big time. But for a city such as Hong Kong to compete successful as an e-commerce centre, it takes careful planning and huge infrastructure investments.

In promoting e-commerce, we need to develop electronic communication systems that deliver and receive data in a safe and secure manner; we need to update legislation to include the e-commerce environment; there has to be comprehensive coverage of the banking system with easily accessible credit facilities (e.g. credit cards); a highly efficient and accessible transportation systems; sufficient and well-placed warehouses with fast, low-cost delivery services to replace the numerous retail outlets we now have; professional IT investors and a volatile, high-volume GEM market; and an IT-skilled workforce to invest, create, manage, promote, market and handle the data processing of e-services and e-products. We need the right propositions of all of these ingredients for e-commerce to really flourish.

Hong Kong's strength lies in its abundant financial resources and well-developed financial markets. We also have the necessary management skills to organise and manage the change needed to satisfy fidgety markets.

Our weaknesses, however, include our slow response in rationalising our infrastructure, the physical limitations of our e-commerce markets (unless we can penetrate the PRC market as well) and our severe lack of skilled IT technicians.

These weaknesses require bold and conscientious government policies if we are to overcome them. We must not underestimate the importance of management and capital because even highly advanced economies like the US's still depend heavily on foreign scientists and technicians. With a good legal system to protect proprietary rights, it will always be the investors and managers who ultimately reap the lion's share of the created wealth.

Notwithstanding these long-term visions. Hong Kong has more financial resources than technological ones. This imbalance is already filling our stock markets with 'conceptual' IT stocks as a frantic pace.

The risks must, therefore, be higher than those encountered in other more mature markets. As such, accountants have a dominant role to play in acting as front-line guardians of financial accounts.

In a way, higher risks are unavoidable in any highly competitive emerging market. The ideal management culture ensures that corporations with growth potential are not being fettered. However, we should also leave room for the weaker corporation to be eliminated to avoid any sudden market collapse.

As we explore a new market order for e-commerce and IT stocks, the accountancy profession needs to take a lead in establishing a corporate governance structure where management is held accountable in reasonable and transparent manner, due diligence is closely monitored and the endless risk factors associated with IT shares are updated regularly to give investors important advance warning.

I also hope accountants will be keen to adopt accounting and auditing standards which help avoid possible disputes. The Government should also give direction in regulating share valuations and aggressive valuer, as well as providing investors with more objective and regular market information on e-commerce.

It is only then that the responsibilities, risks and rewards for all e-commerce investors, both large and small, as well as for professional intermediaries (such as accountants), will be well balanced.