A 50-member Chamber delegation recently returned from Beijing following a very fruitful mission to the nation's capital.

Led by Chamber China Committee Chairman Stanley Hui, with Chamber Vice Chairman Dr Lily Chiang as the "honorary" leader, the delegation called on government officials in Beijing on January 31 and February 1 to learn first-hand about the details of China's trade and investment policies that will be affected by the WTO. Members also discussed with Olympic Committee officials business opportunities related to the Beijing 2008 Olympic Games.

Ministry of Foreign Trade and Economic Cooperation (MOFTEC) Assistant Minister An Min brought members up to date on discussions between the Central and the Hong Kong SAR governments on the proposed "Closer Economic Partnership Arrangement" (CEPA). An Min is charged with co-ordinating CEPA consultations and other Central Government departments -- the General Administration of Customs, State Development Planning Commission, etc, -- will join the consultation process at an appropriate time.

The common objective of both the Central Government and the Hong Kong SAR Government is to achieve an arrangement that will be mutually beneficial to the economic development in the two areas. Both sides hope that such an arrangement can be implemented as soon as possible, but they realise that it is unrealistic to come to a conclusion so early in the negotiations.

Vice Minister An emphasised that the setting up of the CEPA is a complicated matter, which has is no precedent, and as such no existing model to follow. However, both sides are committed to investigating all possibilities to arrive at an arrangement that is WTO compliant. He assured the delegation that the Central Government is committed to achieving results from the ongoing consultation.

He also commended the Hong Kong General Chamber of Commerce for producing its report "China's Entry into the WTO and the Impact on Hong Kong Business," in which he said he found many useful opinions.

The delegation also called on the Head of the Trade and Market Bureau of the State Economic and Trade Commission Huang Hai, and Director General Yang Weimin of the Development Planning Department of the State Development Planning Commission. Both officials said they welcomed the consultations on the CEPA.

Huang Hai told the delegation that the development of China's consumer market would focus on development of the logistics sector, further opening of the market, and perfecting regulations to control market order. He also told the delegation that the Market and Trade Bureau welcomed the idea of early liberalisation of Hong Kong companies under the proposed CEPA as this would help Mainland companies increase their competitiveness, as long as it is within WTO rules -- which MOFTEC is looking at.

During the meeting, Director General of the International Taxation Department of the State Administration of Taxation Zhang Zhiyong told members that his administration is working on a draft proposal to unify profits tax for local and foreign enterprises. The contents of the draft is now being reviewed by other departments, and once a final draft has been written, it will be submitted to the State Council and then to the National People's Congress for final approval.

Mr Zhang said it was unlikely that a final draft would be ready for the NPC meeting in March 2002, and because the 2003 NPC meeting will focus on the Central Government re-election, he was unsure whether the draft could be presented at the 2003 NPC meeting. But he pointed out that even if it were presented at the 2003 meeting, implementation of the new law would not take effect until January 2004. As such, Mr Zhang said it was unlikely that local and foreign enterprises profits tax would be unified within the next two years.

The delegation also met with the Beijing 2008 Olympic Committee. Executive Deputy Chairman of the Committee, Beijing Vice Mayor Liu Jingmin, explained in great detail the preparatory work being done for the Beijing 2008 Olympic Games.

He said preparatory work has been divided into three major areas: preparation for the games, city infrastructure development, and sports development.

Planning work will be conducted from now until June 2003, while construction work will take place from June 2003 to June 2006. The two years leading up to 2008 will be used for refining facilities and services, he said.

Beijing will invest RMB25.2 billion in the construction of stadiums and an Olympic Green park for the games. In terms of city infrastructure, three railroads are under construction, two more subway lines will be built, Beijing's telecommunications network will be beefed up and projects to improve the air quality in the capital will be implemented.

All these projects will call for international tenders in the second or third quarter of 2002 and foreign companies interested in bidding for the infrastructure development projects can contact the Beijing Planning Commission for details.

The Beijing Olympic Committee and the International Olympic Committee are expected to reach an agreement in July 2002 over sponsorship arrangements. Companies interested in sponsoring the Olympic Games or using the Olympic logo on merchandise should contact the Olympic Committee's Market Development Department for details.

Eight detailed reports on environmental protection, transportation networks, stadium construction, funding, security, cultural development, communications, and technology are being prepared and will be released for consultation. Details on the reports can be found at the Beijing Olympics' Web site, www.beijing-2008.org

The China Committee collected a great deal of useful business information during its trip to Beijing. For details, members can visit the Chamber Web site or contact the Chamber's Assistant Manager for China Frances Huang at 28231299, or email frances@chamber.org.hk.