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| Hong Kong Chief Executive Donald Tsang said the new package of CEPA liberalization would deepen economic and trade cooperation between Hong Kong and Guangdong, and open up more opportunities for Hong Kong traders who wish to enter the Mainland market. |
On July 29, the Hong Kong Special Administrative Region Government and the Central People’s Government (CPG) agreed on further services liberalization under the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA).
With the approval of the CPG, Hong Kong and Guangdong will also implement a package of liberalization and facilitation measures on an early and pilot basis to enhance mutual economic and trade cooperation.
Witnessed by Hong Kong Chief Executive Donald Tsang, and other guests, Hong Kong Financial Secretary John C. Tsang and China’s Vice-Minister of Commerce Jiang Zengwei signed Supplement V to the CEPA.
The Chief Executive said the new package of CEPA liberalization measures and the measures to deepen economic and trade cooperation between Hong Kong and Guangdong will open up more opportunities for Hong Kong traders who wished to enter the mainland China market, capitalize on Hong Kong’s advantages in tapping the Mainland market and support the development of service industries on the Mainland in response to the National 11th Five-year Plan. These measures will not only bring about mutual economic benefits but will also create a solid platform for enhancing economic integration between the two places.
“The current CEPA package and the Guangdong pilot measures will offer new business opportunities on the Mainland for Hong Kong businesses and service suppliers, making Hong Kong even more attractive to overseas investors,” the Chief Executive said. He believes that the Guangdong pilot measures will, in the long-run, foster closer economic integration and further facilitate economic development in the two places.
Under Supplement V to CEPA, the Mainland will introduce 29 liberalization measures covering 17 services sectors, including existing sectors such as conventions and exhibitions, banking, construction and related engineering services, social services, tourism, accounting, and medical and dental services, as well as two new sectors: services incidental to mining, and related scientific and technical consulting services. The total number of services sectors covered by CEPA will be expanded from 38 to 40.
In conventions and exhibitions, enterprises set up by Hong Kong service suppliers (HKSS) on a wholly-owned, equity joint venture or contractual joint venture basis in Beijing, Tianjin, Chongqing and Zhejiang will be allowed to organize overseas exhibitions on a pilot basis (this being an extension of the 2007 liberalization measure which covers Guangdong and Shanghai).
In banking, any Mainland-incorporated banking institution established by a Hong Kong bank will be allowed to locate its data centre in Hong Kong, subject to fulfillment of certain requirements.
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Hong Kong Chief Executive Donald Tsang (center), witnesses the signing of Supplement V to the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) by Hong Kong Financial Secretary John C. Tsang (second from left) and Vice-Minister of Commerce Jiang Zengwei (fourth from left) on July 29. Also present at the ceremony are: Hong Kong Secretary for Commerce and Economic Development Rita Lau (far left) and Deputy Director of Hong Kong and Macao Affairs Office of the State Council Zhou Bo. |
In construction and related engineering services, Hong Kong professionals obtaining the Mainland’s registered Urban Planner or Supervision Engineer qualification will be allowed to register/practice in Guangdong regardless of whether they are registered practitioners in Hong Kong. Restrictions on the proportion of the total capital contributed by the Mainland partners in setting up construction and engineering design enterprises in the form of an equity joint venture or contractual joint venture on the Mainland will be removed.
In relation to social services, HKSS will be allowed to operate welfare agencies for persons with disabilities in the form of wholly-owned private non-enterprises in Guangdong on a pilot basis (this being an extension of the 2007 liberalization measure that covers only elderly services in Guangdong).
In tourism, Guangdong will be delegated the authority to approve applications submitted by HKSS for setting up travel agents on a wholly-owned, equity joint venture or contractual joint venture basis in Guangdong. Hong Kong permanent residents with Chinese citizenship will be allowed to take the “Mainland Qualification Examination for Tourist Guide.” Those who have passed the examination can obtain the “Mainland Tourist Guide Certificate” in accordance with the relevant requirements.
In accounting, the validity period of the “Provisional License to Perform Audit-related Services,” applied for by Hong Kong accounting firms for auditing business on a temporary basis on the Mainland, will be extended from two years to five years. Dedicated examination centers in Hong Kong, Shenzhen and Dongguan will be set up for Hong Kong residents to take the Mainland’s accounting qualification examinations.
In medical and dental, HKSS will be allowed to set up wholly-owned outpatient clinics in Guangdong. There will be no total investment requirement in setting up outpatient clinics by HKSS in Guangdong. In addition, there will be no restriction on the ratio of capital investment between HKSS and Mainland service suppliers in setting up outpatient clinics in equity joint ventures or contractual joint ventures in Guangdong. The health administrative department in Guangdong will be responsible for the project establishment and approval procedures for setting up outpatient clinics by HKSS. Qualified Hong Kong permanent residents with Chinese citizenship and with specialist doctor qualifications will be allowed to apply for and obtain the Mainland's Medical Practitioner’s Qualification Certificate through accreditation.
Supplement V to CEPA also opens up the Mainland market in two new service sectors. HKSS will be allowed to provide services incidental to mining on a contractual joint venture basis (confined to exploration of oil and natural gas only), and related scientific and technical consulting services (prospecting and surveying services for iron, copper and manganese) on a wholly owned, equity joint venture or contractual joint venture basis.
All the service liberalization measures will come into force on January 1, 2009.
As a further step to deepen Hong Kong-Guangdong economic and trade co-operation, the governments of Guangdong and Hong Kong will implement 25 liberalization and facilitation measures for early and pilot implementation in Guangdong, covering accounting, construction and related engineering, medical and dental, placement and supply services of personnel, environment, social services, tourism, education, maritime transport, road transport and individually-owned stores. Seventeen of the measures are included under CEPA. Some of the other early and pilot measures cover education and tourism.
In education, Guangdong will be delegated with approval authority on applications submitted by Hong Kong institutions to set up schools for Hong Kong children. A joint approval mechanism by the Ministry of Education and the Guangdong authorities will be set up to jointly assess and approve education institutions and projects operated jointly by Guangdong and Hong Kong.
In tourism, the coverage of “simplified entry arrangement for a period of 144 hours" will be extended to the whole of Guangdong. Mainland-authorized Hong Kong travel enterprises will be allowed to organize group tours to Hong Kong Disneyland for non-Guangdong residents who have resided and worked in Shenzhen for more than one year. Guangdong’s pilot program for a wholesale tourism reform, including strengthening of Guangdong-Hong Kong tourism cooperation, will be supported.
The two sides also agreed to enhance cooperation in branding, trademark, e-commerce in the area of trade and investment facilitation, and to continue work on mutual recognition of professional qualifications in accounting and construction. In this regard, an agreement on trademark cooperation and two agreements on accounting were signed in conjunction with the signing of Supplement V.
CEPA was first signed in June 2003. Under CEPA, the Mainland agrees to give all products of Hong Kong origin tariff-free treatment if they meet CEPA rules of origin. On trade in services, the Mainland has already allowed preferential treatment to Hong Kong service suppliers in 38 service sectors. Details on CEPA including the newly agreed liberalization and cooperation measures are available on the Trade and Industry Department’ CEPA dedicated website [www.tid.gov.hk/english/cepa/index.html].
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