Hong Kong's economic growth has made a dramatic come back in the period from 2002 to 2005, and the outlook for 2006 also appears bright, the World Trade Organization (WTO) said in its latest report.

Hong Kong, a special administrative region of China, has seen its economic growth making a come back from under 2 percent in 2002 to over 7 percent in 2005, according to the report, said the Geneva-based trade body in its fifth routine trade policy review of Hong Kong.

The review, which is held every four years, started on Wednesday and will be concluded on Friday.

According to the WTO, Hong Kong's economy will continue a relatively strong growth in 2006. "The outlook for 2006 appears bright as the economy is expected to gradually settle back to a more sustainable growth rate of 4 to 5 percent."

Underlying Hong Kong's economic performance is the openness of its economy to trade and foreign investment as well as the favorable external environment, judicious macroeconomic policies and structural reforms, said the report.

Hong Kong has also benefited much from the strong growth in the Chinese Mainland and the confidence-building effects of the Closer Economic Partnership Arrangement (CEPA) with the Mainland, it added.

"As a result of its growing integration with the Chinese Mainland through the CEPA and its participation in the Pan-Pearl River Delta Initiative, the Hong Kong Special Administrative Region's structural transformation from a manufacturing to a services-based economy has continued."

According to the report, the sole notable change in Hong Kong's trade and investment patterns since 2002 is the rise of the Chinese Mainland's shares in its foreign trade as well as inbound and outbound investment.

Textiles and clothing remains the largest category of Hong Kong's exports, and the Chinese Mainland its largest market, the report said.

The report noted that Hong Kong's institutional and policy framework has remained largely unchanged during the period under review.

In accordance with the principle of "one country, two systems," the Basic Law, the main constitutional document governing Hong Kong, "grants the Territory a high degree of autonomy in the conduct of foreign trade relations," the report said.

According to the report, as from 2004, a continuous bilateral trade liberalization process between Hong Kong and the Mainland has been launched under CEPA.

Furthermore, the Pan-Pearl River Delta Initiative is expected to strengthen cooperation among nine Chinese provinces and the special administrative regions of Macao and Hong Kong in 10 trade-related areas.