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| No.5 May, 2010 |
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HK, Mainland augment trade pact |
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 Hong Kong and the Mainland have signed a supplement to the Closer Economic Partnership Arrangement to further liberalise trade in services and enhance co-operation in trade and investment facilitation.
Financial Secretary John Tsang and Vice-Minister of Commerce Jiang Zengwei signed Supplement VII, witnessed by Chief Executive Donald Tsang on May 27, 2010.
The agreement provides for 35 market liberalisation and trade and investment facilitation measures in 19 sectors. Of them, 27 are liberalisation measures in 14 service sectors, of which eight are measures for "early and pilot implementation". |
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 It further relaxes market access conditions in 14 service sectors, which include two new sectors - "technical testing, analysis and product testing" and "specialty design" - bringing the total number of liberalised service sectors under the arrangement from 42 to 44.All the measures will take effect from January 1, 2011.
 Medical sector
Under the pact, Hong Kong medical service suppliers can establish wholly owned hospitals in Shanghai, Chongqing, Guangdong, Fujian and Hainan. They can also establish convalescent hospitals in the form of wholly owned, equity joint venture or contractual joint venture in Guangdong.
There is no restriction on the ratio of capital investment between Hong Kong and Mainland partners in establishing hospitals in the form of equity or contractual joint venture. No requirement is imposed on the total investment in those hospitals established on an equity joint venture or contractual joint venture basis in Guangdong.
Twelve categories of statutory healthcare professionals registered to practice in Hong Kong can provide short-term services in the Mainland. They are medical practitioners, Chinese medicine practitioners, dentists, pharmacists, nurses, midwives, medical laboratory technologists, occupational therapists, optometrists, radiographers, physiotherapists and chiropractors.
Commercial front
Hong Kong travel agents established on a wholly owned or joint venture basis in Beijing and Shanghai can apply to operate, on a pilot basis, group tours to Hong Kong and Macau for residents registered with permanent residence in the two municipalities.
A Hong Kong bank which has maintained a Mainland representative office for more than one year can apply to establish a wholly foreign-funded bank or a foreign bank branch. If a Hong Kong bank's Mainland operating institution has been operating for more than two years and profitable for one year prior to the application, it can apply to conduct renminbi business. Foreign banking institutions established in the Mainland by Hong Kong banks can establish specialised institutions to provide financial services to small enterprises.
On securities, the Mainland and Hong Kong will deepen co-operation in financial services and product development, and ETF - open-end index-tracking exchange-traded funds - constituted by Hong Kong-listed stocks will be launched in the Mainland at an appropriate time.
Professional services
On construction, Hong Kong professionals with the Mainland's class one registered architect qualification or class one registered structural engineer qualification can act as partners to form construction and engineering design offices on the Mainland. Should their qualification be obtained through mutual recognition, they can also register and practice in Guangdong.
Sales agencies formed by Hong Kong service suppliers on the Mainland in the form of wholly-owned enterprises, equity joint venture or contractual joint venture, can operate air transport sales agency services on the domestic routes on the Mainland. They can also operate aircraft repair and maintenance services on the Mainland in the form of wholly-owned enterprises or with majority shareholding in the enterprises.
Hong Kong service suppliers can establish distribution enterprises to sell books published in Hong Kong; or enterprises on a wholly owned, equity joint venture or contractual joint venture basis to produce video and sound recording products; or wholly owned enterprises to provide specialty design services.
On technical testing, analysis and product testing, testing organisations accredited in Hong Kong can co-operate with designated Mainland organisations to undertake testing of products under the China Compulsory Certification System on a pilot basis, in respect of selected products listed in the system catalogue and processed in Hong Kong.
Small businesses
Measures in the supplement will also benefit individuals and small businesses, such as allowing registered healthcare professionals to provide short-term services on the Mainland, allowing local permanent residents to take the Mainland qualification examination for real estate valuer, and allowing local people with Chinese citizenship to establish individually-owned stores on the Mainland to provide marriage services, renting and leasing of comics books, and pet clinics.
Besides enhancing trade and investment facilitation, the two sides also agreed on co-operation in cultural and environmental industries, and innovation and technology industry.
They will progressively involve local research institutes and enterprises in the national innovation system, encourage Hong Kong research personnel and organisations to join national science and technology projects, and boost exchanges and co-operation in high technology research, development and application, and fundamental scientific research.
Other areas
Both sides agreed to support the Mainland's education institutions and Hong Kong's higher education institutions to jointly provide education programmes, to establish joint research facilities and to nurture talent at undergraduate level or above in the Mainland.
They will bolster co-operation between the testing and certification authorities of both sides, and the Mainland will help Hong Kong's testing laboratories to be recognised under the international multilateral systems on mutual recognition of testing and certification that are open to national member bodies.
Economic benefits
Chief Executive Donald Tsang said from 2004 to last year, cumulative business receipts obtained by service companies in Hong Kong due to the arrangement from Mainland-related business reached HK$61.6 billion.
Business receipts obtained by operations established by local service suppliers on the Mainland induced by the arrangement amounted to HK$198.5 billion in 2007-09. During the same period, local companies obtained additional business receipts totalling HK$55.1 billion.
Under the arrangement, the Individual Visit Scheme has been extended to 49 Mainland cities and more than 49 million Mainland visitors had come to the city by March. In cumulative terms, these visitors brought about extra spending of more than HK$84.8 billion during 2004-09.
Up to last year, 54,700 and 40,600 jobs were created in Hong Kong and the Mainland due to liberalisation of trade in services and the scheme under the arrangement. |
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