To mark the July 1 anniversary on Monday, authorities, operators and businesses encouraged locals and visitors alike to make the most of free rides for children on trains and for everyone on trams, free admission to museums, discounts at select restaurants and other festivities capped off by a drone show in Tsuen Wan at night.

Hong Kong’s leader himself began the third year of his five-year term as he hosted top officials, representatives of the central government and other VIPs at the traditional reception at the Convention and Exhibition Centre in Wan Chai.

“Hong Kong will soon welcome two new family members: a pair of giant pandas,” Lee said in a surprise announcement that delighted the gathering.

“I am deeply grateful to the central government for its care and support, and for considering my proposal of sending us a pair of giant pandas.

“We will start the preparation work immediately. The giant pandas will arrive in Hong Kong in a few months, bringing us laughter and joy.”

The national treasures would be cared for by Ocean Park, the government explained later, and arrangements were being discussed with the Hong Kong and Macau Affairs Office of the State Council and the National Forestry and Grassland Administration.

Separately, Ocean Park chairman Paulo Pong Kin-yee said the gift from Beijing was “tremendously significant” as the pandas would enhance Hong Kong’s tourism appeal and “expand the breadth and depth of Ocean Park’s conservation and education work”.

Hong Kong Tourism Board chairman Pang Yiu-kai welcomed the pending arrival of the pandas as “valuable tourism assets” that would help with the “mission of sharing joy with both locals and visitors”.

Hong Kong’s first pair of pandas – An An and Jia Jia – were gifted by Beijing on the second anniversary of the return to Chinese sovereignty in 1999. They were the oldest giant pandas in captivity at the time of their deaths in 2022 and 2016, respectively.

A second pair, Ying Ying and Le Le, arrived in 2007. Both are 18 years old, equivalent to 54 human years, and have not produced any offspring.

At around the same time that Lee concluded his keynote speech at the anniversary event, Chinese state media reported that the National Immigration Administration would introduce a new type of travel permit that would be valid for five years and allow permanent residents of non-Chinese nationalities in Hong Kong and Macau to make unlimited trips to the mainland. Applications would open on July 10, it was announced.

As of June, Hong Kong had about 270,000 permanent residents of non-Chinese nationalities, excluding children under 11 years who had not applied for ID cards, the Immigration Department said.

In a statement later, Lee welcomed the initiative, saying it “greatly helps the city maintain its international character and diversity” and would provide a “significant incentive” for companies and talent to set up base in Hong Kong.

“Foreign talent working in Hong Kong are particularly keen to better seize the historic opportunities of our country’s rapid development … We firmly believe that international talent of Hong Kong companies can enjoy the long-awaited clearance convenience for northbound travel with this card,” he said.

In a separate announcement, Lee’s government said it had substantially concluded its consultations with the Ministry of Commerce for further liberalisation of trade in services under Cepa.

No details were provided, except that the new liberalisation measures “target service sectors that Hong Kong enjoys competitive advantages in”, giving the city’s enterprises and professionals more preferential treatment to explore the mainland market.

Hong Kong and the mainland signed the first Cepa agreement on services trade in 2015. Under the current framework, the mainland has fully or partially opened up 153 service industries to the city, allowing companies to develop their business across the border with preferential treatment.

In his 14-minute keynote speech at the anniversary event, Lee took stock of the progress made by his “results-oriented” governing team over the past two years under his leadership, from the introduction of a domestic national security law to tackling housing and livelihood issues and developing the economy.

“With concerted and collective efforts of all concerned, many policies launched by the current term of the government are delivering results,” he said, referring to instructions laid down by President Xi Jinping during a visit to Hong Kong in 2022 as the basis for moving forward.

Facing considerable challenges ahead and under pressure to deliver, Lee outlined three areas of focus for future policymaking, the first of which would be to pursue economic growth and improve livelihoods.

“My goal is to make Hong Kong a better place for all – for everyone to enjoy a better living environment, for young people to realise their potential, for our elderly to be well taken care of,” he said.

On reinforcing Hong Kong’s competitive edge and exploring new growth potential – his second focus – Lee said the city should develop a “headquarters economy” and give full play to the advantages of financial services to enhance interconnectivity with the mainland market.

Lee listed his third area of focus as leveraging on opportunities offered by the mainland and wider world. A key example would be aligning with national development strategies to seize opportunities by using Hong Kong’s Northern Metropolis mega development project as “the new engine for growth” and adopting an industry-oriented approach, he said.

“No less important, Hong Kong will reinforce its advantages as a global city, maintaining its high degree of internationalisation,” Lee added, pledging to explore markets in the Association of Southeast Asian Nations and the Middle East.

He also highlighted the importance of forging ties with Europe and other Western markets to create new opportunities and fresh momentum.

In a separate, much lengthier statement, Lee said Hong Kong would prevail in the face of challenges presented by the geopolitical struggle between China and the US-led Western alliance seeking to contain the country’s rise.

“Facts have proved that no matter how uncertain the world is, no matter how the United States and some Western countries bully and curb our country’s peaceful development, and no matter how many difficulties and obstacles we have encountered, with the staunch support from our country and the concerted efforts of all citizens, Hong Kong has gone from strength to strength,” he said.

“Hong Kong has effectively retained its key features as an international city; the prospects for Hong Kong’s advancement from stability to prosperity have become brighter, and the development scope and opportunities for social, economic and livelihood issues are considerable and varied.”