Hong Kong Chief Executive C Y Leung said Wednesday that the industrial, commercial and professional sectors have great potential for development in Hong Kong, the Mainland and overseas, but may come across obstacles that cannot be removed without government assistance.

Speaking at the Legislative Council on Wednesday, Leung said examples include the difficulties encountered in tapping the preferential arrangements offered in the Mainland-Hong Kong Closer Economic Partnership Arrangement, and other schemes.

Those difficulties can only be resolved through collaboration between the Hong Kong Government and central or local authorities -- a government to government approach.

Leung said the market is not perfect and there are many examples of its failure. As Hong Kong presents both opportunities and obstacles, it needs an appropriately proactive government that seeks changes while maintaining overall stability.

He noted that the positive non-interventionism that Hong Kong attempted over the years is a vague and contradictory concept. The concept of "big market, small Government" that replaced positive non-interventionism can not meet Hong Kong's needs today, he stressed.

In view of globalization and the Mainland's rapid development, Hong Kong must cooperate, coordinate and compete with other parts of the world, including Mainland cities, to maintain its existing advantages and build up new ones to increase its competitiveness.

The government will exercise its public powers carefully, conduct relevant surveys and studies, and nurture talented people, he added.

Talking about the relationship between Hong Kong and the Mainland, Leung said the Government must be proactive and prudent in developing it, as the social and economic ties between both places have become inseparably close.

Leung said the actions of some Mainlanders in Hong Kong, such as giving birth or acting as couriers, have caused both positive and negative impacts to varying degrees to Hong Kong people in different districts and industries. The government is concerned about the issue and has taken appropriate measures.

Meanwhile, the city's chief announced his decision to shelve his government reorganization proposal to concentrate efforts on other key areas.

He said the revamp plan's aim had been to enhance coordination among different bureaus. However, the reorganization plan had not been put to a vote by the council, and doing so could result in prolonged debate.

To avoid this, he would not re-submit the plan in the near future, but focus on other important areas.