In the survey which questioned 168 CEOs whose companies employ 250,000 residents, 97 per cent of British businesses said they were confident about the Hong Kong economy over the next five years, compared to 82 per cent last year.

Chamber executive director Christopher Hammerbeck said British companies had not been so optimistic since the "golden years" of 1995/1996. He commented: 'Following the handover, British companies were in a state of semi-self-denial....but Hong Kong hasn't turned into the gulag some people feared. World Trade Organisation accession [for China] is around the corner, bringing with it tremendous opportunities, and Hong Kong is growing in its status as a regional centre.'

Mr Hammerbeck does, however, have some concerns. He said 'The CEOs interviewed had major concerns about human resources. More than half of Chamber members said it was difficult to get high-quality staff. There are not enough skilled people here, and when they are available, they are not available at a competitive price.' There is undoubtedly a problem getting enough English-speaking staff and, said Mr Hammerbeck, 'companies find it very difficult to get capable staff to fill low-wage positions.'

The companies surveyed praise Hong Kong for its political stability and social security, but criticise the age-old problems of high rents and poor air quality. Almost three quarters of businesses found rental costs too high and, Mr Hammerbeck said, the high property prices were a real thorn in the side of small businesses: 'Big companies can accept the high fixed costs needed to live here. But smaller service companies find the high costs make them regionally uncompetitive,' he said.

The survey comes just days after a report by the Hong Kong General Chamber of Commerce revealed that high property prices were driving foreign investors away. Its chief economist Ian Perkin said property prices did affect the SAR's competitiveness, but that on the whole, businesses were optimistic about the future of businesses in a region with countless opportunities.