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Capitalising on the Mainland/Hong Kong Closer Economic Partnership Arrangement

12.      The signing of CEPA is the best embodiment of the "market leads and government facilitates" principle. It is also a prime example of how "One Country, Two Systems" benefits Hong Kong. In the Mainland, the demand for quality goods and services from enterprises and individuals alike has surged following years of rapid economic growth. At this crucial juncture, CEPA has ushered in a new phase of comprehensive economic co-operation between Hong Kong and the Mainland. Apart from generating unlimited "win-win" opportunities, CEPA also gives overseas multinational enterprises the chance to use Hong Kong to access the Mainland market. Our position as a two-way platform for business and trade will be greatly enhanced. This will inject new impetus into our economy and, at the same time, facilitate our economic restructuring and increase employment opportunities.

13.      Currently, 374 Hong Kong-made products can be exported to the Mainland tariff-free. Other Hong Kong products will also enjoy zero-tariff treatment by 1 January 2006 at the latest. In the short span of two months since CEPA came into operation, over 300 CEPA certificates of origin have been issued, with the value of products enjoying preferential treatment at around $150 million.

14.      The zero-tariff treatment gives Hong Kong products the edge over overseas products in penetration of the Mainland market. This will provide an added incentive for the manufacturers of brand name products and products with high added-value and significant intellectual property content to locate their production lines in Hong Kong. This will encourage the structural adjustment of our industries towards further diversification and high-value-added and high-tech production.

15.      CEPA provides 18 major service sectors, including the professions, banking and finance, retail and distribution, communications and audio-visual and logistics, with market access that is far more favourable than under China's commitments to the WTO. This enables professionals and companies in Hong Kong to enjoy the advantage of preferential access to the vast Mainland market. It also helps Hong Kong attract inward investment, thus further reinforcing the status of Hong Kong as a major business and service centre in the Asia-Pacific region. In addition, Hong Kong permanent residents of Chinese nationality may operate individually-owned retail businesses in Guangdong.

16.      The conference on professional services held in Beijing last month made good progress in many areas, including mutual recognition of professional qualifications and practising requirements. We will continue to hold discussions with the Mainland authorities on the mutual recognition of professional qualifications and the entry threshold for different sectors in order to enable Hong Kong's service providers to play fully to their strengths in the Mainland market.

17.      The Government attaches much importance to the successful implementation of CEPA and will spare no effort to provide the necessary support for this. We may encounter some difficulties in the initial phase of implementation. We invite the business sector to report to us immediately any bottlenecks or administrative obstacles encountered in any particular area. The Mainland and Hong Kong authorities will take swift action to tackle them. We will continue to discuss with the sectors concerned how to formulate policies and measures to enable businesses in Hong Kong to reap the maximum benefit from CEPA.

18.      CEPA is an ever-developing platform. We will continue our efforts to reinforce and expand it in order to provide more favourable market access conditions for our businesses. The CEPA platform has unlimited horizons. But blazing a successful trail will require the various sectors to take their opportunities and make the most of them.

19.      We envisage that CEPA will speed up our economic co-operation with the Mainland, particularly with the Pearl River Delta (PRD). The 15 expert groups established under the Hong Kong/Guangdong Co-operation Joint Conference have started work in their different areas. In order to enhance the competitiveness of the Greater PRD, we will strive to improve the economic infrastructure of the region. The Shenzhen Western Corridor and the new cross-boundary vehicular bridge at the Lok Ma Chau/Huanggang Control Point, both of which are already under construction, will further facilitate the flow of people and goods between Hong Kong and Guangdong. The Hong Kong-Zhuhai-Macao Bridge, which is now under planning, will draw us closer to our hinterland. Better access to western Guangdong will also help us tap the new business opportunities over there. The economic co-operation between Hong Kong and Guangdong represents the alliance of a strong manufacturing base with a centre of international finance, trade, shipping, logistics and high value-added services. The strengths of the Greater PRD region are all-embracing and unique. With its world-class potential, Hong Kong can play a key role as a business platform. Our primary task is to seize the opportunities for development that CEPA brings.

20.      Such opportunities are not confined to Guangdong alone. We convened the first meeting of the Hong Kong/Shanghai Economic and Trade Co-operation Conference in October last year with a view to reinforcing our economic ties with Shanghai and creating business opportunities together within the framework of CEPA. There is already a strong friendship between the people of Hong Kong and Shanghai. I believe that, as we complement each other's strengths, the co-operation and understanding between our two cities will definitely be enhanced. We will also continue to increase our economic and trade co-operation with other provinces and cities for our mutual benefit.

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2003 | Important notices
Last revision date : 10 March, 2004