HONG KONG - Hong Kong should adapt to the new environment of co-operation and competition, identifying new roles to play and new functions to perform, Chief Executive CY Leung said Tuesday.

Leung made the speech when he officiated at the flag-raising ceremony to celebrate the 64th anniversary of the founding of the People's Republic of China at Golden Bauhinia Square, and the National Day reception at the Convention & Exhibition Center.

With the support of the Central Government and the co-operation of mainland provinces and municipalities, he said Hong Kong has developed and contributed to the progress of the country and people.

"We have continued to preserve the integrity of 'One Country' while giving play to the characteristics of 'Two Systems'. We have also maintained our status as a highly open and international city, while safeguarding the sovereignty of our country and the interests of Hong Kong."

Leung continued that the Hong Kong government and society should capitalize on the advantages of both "One Country" and "Two Systems", and make contributions to the co-development of Hong Kong and the Mainland through links with the international community and with other parts of the country.

He quoted that the World Bank ranked Hong Kong the second- easiest place to do business in the world last October, while the Heritage Foundation rated Hong Kong the world's freest economy for the 19th year in a row early this year.

In the Global Competitiveness Report released by the World Economic Forum last month, Hong Kong moved up two places to the seventh in the world and second in Asia. He said these are affirmations of Hong Kong's international status and competitiveness.

Hong Kong's competitiveness stems from the efforts of Hong Kong people, and the country's support and international influence, he said, adding the current-term government not only attaches great importance to co-operation with Mainland provinces and municipalities, but plans to expand the scope and raise the level of co-operation in future.

According to him, the ties between Hong Kong and the Mainland are getting closer. As at the end of June, 154 branches of Hong Kong banks were set up in Guangdong, while six Hong Kong banks had opened 58 cross-location sub-branches there.

Supplement X to the Closer Economic Partnership Arrangement signed in August brings the number of liberalization measures for trade in services to 403, he said, with operations reaching an all- time high of 7,250.

The growing social ties between Hong Kong and the Mainland are also reflected in the number of cross-boundary marriages, which accounted for about 35 percent of all marriages registered in Hong Kong in 2012.

A survey conducted in 2011 by the city's Census & Statistics Department found there were 115,500 Hong Kong people aged 60 or above residing on the Mainland.

On education, some institutions have exempted Hong Kong students from taking the Joint Entrance Examination for Universities on the Mainland, and 70 others joined the scheme this year, admitting 1,200 students from Hong Kong.

Leung concluded that Hong Kong should make contributions to the development of the country while maintaining its own prosperity and stability.