In 2003-04, directions were laid down for Hong Kong's university sector as a whole, with the University Grants Committee (UGC) placing fresh emphasis on nurturing excellence through role differentiation among tertiary institutions. This is something HKUST has always supported. Since our founding day, HKUST's role has been clearly defined by our mission and this year our focus was given unequivocal backing in the UGC report 'Hong Kong Higher Education: To Make A Difference, To Move with the Times', released in January.

The Role Statement given to the University to "assist the economic and social development of Hong Kong by nurturing the scientific, technological and entrepreneurial talents who will lead the transformation of traditional industries and fuel the growth of new high-value-added industries for the region", and the UGC's reaffirmation of our mission in research and postgraduate education, provided welcome recognition of our unique status in Hong Kong's tertiary sector.

In respect of the future development of higher education in Hong Kong, we see the UGC Working Party on Institutional Integration's recommendation that the UGC should facilitate and encourage deep collaboration among tertiary institutions as a significant, positive move. HKUST, the Chinese University of Hong Kong and the University of Hong Kong have already taken steps to advance such collaboration in teaching and research over the year. Indeed, collaboration, be it with other universities, industry or the community at large, is a constant feature of the HKUST way of life, as we highlight in this report.

Meanwhile, the special contribution that HKUST makes globally, nationally and locally, advanced further over the year. On the international front, our researchers' exciting discovery of the fifth gene linked to schizophrenia gives new hope of treatments for millions of sufferers; there was world recognition of our faculty's first-rate caliber when Prof Nancy Ip, Head of Biochemistry, became the first Hong Kong scientist to receive the L'Oréal-UNESCO for Women in Science Award 2004; and there was acclaim for the high quality of our programs with the ranking of our Executive MBA at number 9 in the world by the Financial Times.

Nationally, we stepped up our presence and in April 2004, my colleagues and I visited a number of institutions and government agencies in Beijing, resulting in several important agreements being signed. These included one between HKUST, Finance Street Holding Co Ltd and Beijing International Finance Training Centre that paves the way for the first internationally recognized joint-venture education institute on Finance Street. Our faculty's outstanding work brought two State Natural Science Awards, the highest national honor in the field. The year also saw the setting up of the Zhejiang Advanced Manufacturing Institute of HKUST to boost design and technology in the province, the first such university collaboration by a Hong Kong institution in Zhejiang.

In Hong Kong it has been a fulfilling year, with HKUST's role in the city's future development becoming more fully acknowledged by the community. This is amply demonstrated by the great response the University received for its fund-raising drives, in particular the collective effort made for the government's Matching Grant Scheme. Under the Scheme, HKUST raised over HK$140 million and received a further HK$130 million in government matching funds. This income will be wisely spent, helping us to retain our fine faculty, improve our teaching and research, and recruit more top students.

I would like to add a personal note of thanks here to the many members of HKUST whose work helped produce such impressive fund-raising results, and of course to the large number of donors, both internal and external, who generously supported the University's development.

It is particularly rewarding to see our abilities and knowledge gaining recognition in Hong Kong. In the early years of the University's life, HKUST stirred the world by rapidly establishing its presence, but remained a largely hidden treasure at home. The light that has always burned at HKUST is now being seen more clearly throughout Hong Kong. This opens the way to significant progress for both the University and the people of Hong Kong, auguring well for all our futures.