Hong Kong and mainland China broaden trade agreement to support local firms’ expansion across border
Hong Kong Free Press
Hong Kong has broadened a trade agreement with China, a move that will help local firms in sectors such as tourism and banking expand into the mainland market.
Financial Secretary Paul Chan and China’s Ministry of Commerce representative Li Yongjie signed an agreement on Wednesday to expand a trade services deal under the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA).
The expansion introduces “new liberalisation measures” such as relaxing qualification requirements for Hong Kong professionals, as well as easing restrictions on the export of services to the mainland Chinese market.
The measures cover around half a dozen sectors including financial services, telecommunications, television and tourism, and come as Hong Kong’s economy continues to lag behind the pre-pandemic era.
“The further liberalisation measures under the CEPA Amendment Agreement will enable Hong Kong firms and professional sectors to go into the mainland market a lot easier,” Chan told reporters after the signing ceremony.
Business are keen to expand into the mainland, Chan said, adding that the agreement would create a “very positive impact on Hong Kong.”
Under the expanded arrangement, which will come into effect next March, television dramas produced in Hong Kong can be broadcast during prime time in mainland China upon approval. In the financial services sector, Hong Kong financial institutions will no longer have to meet the asset requirement of US$2 billion before investing in shares of insurance companies across the border.
‘Breakthroughs’
Signed in 2003, free trade deal CEPA aimed at promoting joint economic prosperity in Hong Kong and mainland China through strengthening trade cooperation across industries. An agreement on the trading of services was made in 2016.
Under CEPA, Hong Kong and mainland China do not apply tariffs to each other’s exports of services. They also encourage mutual recognition of professional qualifications and promote the exchange of talent.
Before the latest amendment, the most recent modifications were made in 2019, when authorities on both sides agreed to liberalisation measures in sectors such as financial services, legal services and film.
Wednesday’s announcement on the further expansion was welcomed by industry groups and political parties, who said it would give Hong Kong firms greater access to the mainland market.
“The amendment not only provides greater development opportunity for Hong Kong’s strategic service industries but also further integrates the Greater Bay Area,” the Federation of Hong Kong Industries’ chairperson Steve Chuang said in a statement.
Regina Ip, the chairperson of the pro-Beijing New People’s Party, said there were several “breakthroughs” in the amendment. She highlighted the scrapping of a rule requiring companies to have at least three years of experience to qualify for benefits under CEPA, as well as the lifting of restrictions for Hong Kong films.
The new amendment will significantly benefit Hong Kong’s role as a financial, commercial and professional services centre, the party’s statement read.
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