Removal Of Export Tariffs On HK Products Unlikely This Year, Says Chinese Official

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

19 June 2002

According to media reports, Hong Kong's exemption from tariffs on products being sold to the Chinese mainland is unlikely to come about this year.

Speaking to the China Daily newspaper on Monday, Li Guanghui, Deputy Director of the Trade Academy's Asia and Africa Department under the Ministry of Foreign Trade and Economic Cooperation declined to give an exact date for the introduction of the exemption, but promised that it would be put in place soon, in order to demonstrate that the mainland government has a special concern for the economic welfare of the SAR.

The zero-tax plan forms part of the Closer Economic Partnership Arrangement (CEPA) designed to offer Hong Kong businesses easier access to mainland markets in the wake of China's World Trade Organisation accession.

Mr Li denied earlier this week that there were still disagreements between the various government departments in Beijing over the granting of special tax treatment to the SAR, revealing that an agreement has been reached on that issue.

However, he told China Daily, a key sticking point has emerged in the definition of 'made in Hong Kong' products, and the mainland authorities fear a rush of foreign exports flooding the Chinese markets through Hong Kong.

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