In 2002-03, the University has faced events which have both called on our collective strength and enhanced our spirit of endeavor and cohesion.

Funding cuts and institutional integration

Our aim at HKUST has always been to forge a great university and we are certainly on our way. In HKUST's short history, which began with the founding of the University 12 years ago, we have already made remarkable progress in gaining international recognition, helping to build a research culture in Hong Kong and, through our teaching and learning, making the wider community aware of the importance of science, technology and management to economic development.

To create a great university, we need excellent students and teachers. We must provide them with a conducive environment to excel further, and to do this requires resources. At the same time, along with all the universities in Hong Kong, we face cuts in central funding.

This report covers the second year of the 2001-04 triennium, also the fifth year since the start of the 10% unit cost reduction mandated by the Government. It means that for the past 12 months we have had to consolidate, to be more focused. In the years to come, we will also have to do more with less; to expand our resources and at the same time make more efficient use of what we already have.

Lord Sutherland's report on Higher Education in Hong Kong, released earlier in 2002, proposed that universities set clear missions and strategically focus on their areas of strength in order to compete at international levels. Mission differentiation is a concept we fully support. It works only with cost differentiation. We have to be selective to make the most of our resources. Given the financial situation, it is not possible for all universities to do everything.

In Autumn 2002, the idea of institutional integration between HKUST and the Chinese University of Hong Kong was put forward by the Secretary for Education and Manpower. This has sparked a great deal of debate both within and outside the University. It is a very complicated issue that has yet to take on clear definition. I believe we must retain an open mind and do what is best for HKUST and Hong Kong. Any proposition that cannot sustain HKUST's quest for excellence is not acceptable.