In the opinion of the Hong Kong General Chamber of Commerce, the proposal by our Chief Executive, C H Tung, to the Central Government to consider a free trade agreement (FTA) between China and the Hong Kong SAR is one of the most significant ideas for Hong Kong's future economic well-being.

As many of you know, the HKGCC had been pushing this concept for almost two years now, and even as recently as mid-November we pressed the SAR Government once more to make this proposal to the Central Government. This concept was conceived by our members, when they were helping the Chamber produce the report: "China's WTO Entry and Its Impact on Hong Kong Business." You can imagine how delighted we were when we heard that indeed Mr Tung proceeded to propose to the Central Government this free trade agreement idea, and that Beijing had responded to this proposal positively.

What now? You will find in this issue an Op-Ed on page 40, which was published in many Hong Kong newspapers in December, listing HKGCC's thoughts on what a FTA with China might look like. Throughout January we will be holding several sectoral focus group meetings to compile feasible "wish lists" and to identify possible quid pro quo for a future FTA. We have promised the government we will provide them this business community's view, along with our analysis, on the contents of a future FTA by Chinese New Year. What we are hoping for is that meanwhile, the government begins contact with the Central Government on the general parameters of such an agreement, so that what is feasible and what is not feasible may be discussed first before the technical details are addressed.

If a FTA can be in place by the end of 2002, Hong Kong companies can get an early head start into China, especially in several service sectors. This first mover advantage for many Hong Kong companies, if they capture it, would accelerate economic integration between China and Hong Kong, and change the shape of China business for Hong Kong for years to come.