China And Hong Kong Agree To Further Trade Liberalisation Under CEPA

by Mary Swire, Tax-News.com, Hong Kong

31 August 2004

The Hong Kong Special Administrative Region Government and the Central People's Government on Friday reached an agreement to apply further liberalisation measures on trade in goods and services under the second phase of the Mainland and Hong Kong Closer Economic Partnership Arrangement.

Under CEPA II, the Mainland will apply zero tariffs to products under 713 Mainland 2004 tariff codes, which are on top of the 374 products that have been enjoying zero import tariff status since January 1, 2004.

For trade in services, the Mainland has agreed to grant preferential treatment in eight new areas, and to broaden liberalisation in 11 of the 18 services sectors to which preferential treatment has already been provided under CEPA.

Products under 529 of the tariff codes currently used by Hong Kong manufacturers will enjoy zero tariff status starting from January 1, 2005. For the remaining 184 product types, the Mainland will apply zero tariffs from January 1 of the following year upon confirmation by both sides that the products have come into production in Hong Kong.

The eight new service areas in which the Mainland has agreed to grant preferential treatment are: airport services; information technology services; patent agency services; trademark agency services; job referral agencies; cultural and entertainment services; job intermediaries; and professional and technical qualification examinations.

The 11 sectors in which the Mainland has agreed to broaden liberalisation are: legal services; construction services; distribution services; transport services (including road passengers transportation and maritime transport); freight forwarding agency services; medical services; audio-visual services; accounting services; banking services; securities and futures services; and individually owned stores.

"Since the implementation of CEPA on January 1, 2004, the CPG and the HKSAR have held a series of high level and senior official meetings with a view to broadening the scope of CEPA,” explained Hong Kong Financial Secretary, Henry Tang.

"The HKSAR shall spare no effort in encouraging the local business sector to make full use of the preference under CEPA. We will also underline the many business opportunities offered by CEPA in our promotion work to attract more foreign investment to Hong Kong,” Mr Tang added.

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