Xinhuanet | 06-18-2007
Mainland trade pact with HK expanded
The mainland is poised to expand its free trade pact with Hong Kong in a bid to link the two economies more closely.
The fourth supplement to the Closer Economic Partnership Agreement, or CEPA, will be released by the end of this month to mark the 10th anniversary of Hong Kong’s return to the motherland, Ministry of Commerce spokesman Yao Shenhong said at a press conference yesterday.
The new supplementary agreement will mainly cover service industries, such as the finance sector, Yao said, without elaborating. He said the two sides are now finalizing the text.
The mainland signed the first CEPA agreements with Hong Kong in 2003. Three supplements have been added to the basic agreement since then. Under CEPA, products originating from Hong Kong do not face tariffs when they enter the mainland, and Hong Kong-based companies are granted greater access to mainland markets.
"The agreements will play a part in boosting the economic and trade exchanges between the mainland and Hong Kong as well as promote economic growth in Hong Kong," Yao said. According to a study released by the government of the Hong Kong Special Administrative Region, the CEPA has boosted Hong Kong’s economy by increasing trade, creating jobs, attracting investment and unleashing tourism.
By the end of last month, more than 23,000 certificates of origin had been issued, involving HK$8.3 billion ($1.06 billion) worth of exports.
CEPA also helped create 36,000 new jobs in Hong Kong from 2004 to 2006, and the government forecasts another 3,600 jobs will be created this year.
Of the 2,600 enterprises taking part in the government study, 89 percent said the CEPA has benefited the economy, and 77 percent said the preferential trade arrangement was beneficial to the manufacturing sector.
CEPA brought HK$305 million worth of investment to the manufacturing industry in 2005 and 2006, and further HK$239 million is expected for this year.
The agreement allowed for the injection of HK$4.8 billion worth of investment into the services sector last year, representing a rise of 380 percent over 2004.
The number for this year is expected to be HK$2.4 billion.