The Hong Kong Special Administrative Region Government (HKSARG) recently welcomed the January 8 release of the “Framework for Development and Reform Planning for Pearl River Delta (PRD) Region.”
The National Development and Reform Commission document reaffirms Hong Kong’s status as a financial center and supports the expansion of cooperation areas that can be decided among Hong Kong, Guangdong and Macao under the guidance of the relevant central authorities.
An HKSARG spokesman said strengthening cooperation between Hong Kong and Guangdong has become increasingly important, and the three most important tasks in the pilot implementation, on a trial basis, are:
- To further development of the Hong Kong services industry in the PRD and Guangdong. Under the Framework and the Closer Economic Partnership Arrangement (CEPA), more liberalization measures will be implemented in Guangdong on a pilot basis. Lessons learned in Guangdong can help encourage the services industry to explore new ground and develop in other parts of the Mainland.
- To work closely with the PRD to ensure clear division of work, reasonable layout and complementarities in development of ports and airports, with a view to maintaining Hong Kong’s status as an important port and civil aviation hub in Asia.
- To continue to play the role of international financial center, to promote the further development of the Hong Kong financial industry and to assist in exploring development opportunities on the Mainland.
“We will actively take forward the suggestion of the Framework to encourage the PRD Region to make regional cooperation planning with Hong Kong and Macao jointly under the premise of agreements among all parties,” the spokesman said. “We will discuss with Guangdong on the follow-up action soon.”
With regard to the implementation of CEPA and the Guangdong pilot measures, Hong Kong has been Guangdong Province’s largest trade partner. In 2007, the import and export trade between the two regions reached US$140 billion. The total direct investment of Hong Kong in Guangdong had accumulated to more than US$120 billion by end-2007. Cumulatively, more than 99,000 Hong Kong-invested enterprises have been established in Guangdong.
More than US$2.05 billion worth of goods had entered the Mainland market by December under CEPA’s zero-tariff preferential treatment. Of that amount, 65% was exported to Guangdong. As for trade in services, more than 2,000 Certificates of Hong Kong Service Suppliers have been issued. These certificate holders enjoy CEPA benefits when investing in relevant service industries on the Mainland. Approximately 40% of the investments have gone to Guangdong.
Taiwan-invested enterprises in Guangdong also may soon be able to enjoy CEPA’s preferential treatment, provided they fulfill the definition and related requirements of Hong Kong service suppliers. Meanwhile, more than 30 million trips were made by Mainland visitors to Hong Kong under the Individual Visit Scheme, with approximately 80% of the applications coming from Guangdong.
The Framework supports the listing of PRD enterprises in the Hong Kong stock market so that the status of Hong Kong as a financial center can be fully demonstrated. As of October 2008, 66 Guangdong enterprises were listed in Hong Kong with a market value of more than US$28.2 billion. In 2008, more than 220 Mainland companies had set up regional headquarters and regional offices in the territory, many of which come from Guangdong.
To enhance closer cooperation within the PRD, both Hong Kong and Guangdong have made efforts to improve cross-boundary infrastructural facilities and efficiency in passenger flow, to implement 24-hour operations at the Lok Ma Chau/Huanggang Control Point and to commission the Shenzhen Bay Control Point and Lok Ma Chau Spur Line. It is expected that the construction of the Hong Kong-Zhuhai-Macao Bridge will commence no later than 2010, and work on the Guangzhou-Shenzhen-Hong Kong Express Rail Link will commence this year. A preliminary study of a rail link between the airports of Hong Kong and Shenzhen has just been completed, and both Hong Kong and Shenzhen have agreed to commence the development of a new border-control point at Liantang/Heung Yuen Wai. At present, there are six land border-control points, two of which are connected by rail. In 2007, there were more than 13 million man-trips per month via the land border-control points between the two places, and the number of vehicle-trips was more than 1.3 million. There were more than 160 million man-trips that year.
The Greater PRD region has the world’s busiest container ports. In 2007, the container throughputs in Hong Kong and Shenzhen ranked third and fourth in the world, respectively. Taking together the major ports in Greater PRD, including those in Shenzhen, Guangzhou, Hong Kong and Macao, the total container throughput reached 54.5 million TEUs in 2007. It is estimated that approximately 74% of the Mainland container cargoes handled by Hong Kong in 2007 were from Guangdong. In 2006, Hong Kong International Airport handled 3.6 million metric tons of air freight cargo, of which approximately 70% originated in the PRD. In the same year, Guangzhou Baiyun International Airport and Shenzhen International Airport handled 0.7 million metric tons and 0.6 million metric tons of air freight cargo, respectively.
“If Hong Kong and Guangdong can reaffirm the division of work and the complementarities under the Framework, greater synergies can be generated, resulting in win-win situations,” the HKSARG spokesman said.
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