Circulars

2003/06/30

The latest development of CEPA

You know by now that the central government and the SAR government signed the Mainland-Hong Kong Closer Economic Partnership Arrangement (CEPA) on June 29th. This is great news for Hong Kong, and great news for the Chamber members. Many of you know that it was the Hong Kong General Chamber of Commerce which first proposed this to Mr. C H Tung back in early 2000 when we published our report: "China's Entry into the WTO and the Impact on Hong Kong Businesses". Then we re-submitted this idea to Mr. Tung in November 2001, which resulted in the formal proposal by Mr. Tung to the central government in December of that year. Beijing immediately agreed to this concept. Now, 18 months later, the negotiations concluded successfully. During the interim, your chamber submitted 13 sets-with one totaling 70 pages-of suggestions, views, and business wishes to the SAR government. You no doubt have also noticed in the press all during this time the Chamber's continuous push for this agreement.

The Chamber is very pleased that many of our ideas have found their way into the agreement. From zero tariff, to lowering barriers for retail and banking, to early liberalization for distribution, to allowing our professionals to practice in China, to further liberalization for exhibition, for example. These were all submitted by us to the government during this long period of negotiation. So was our insistence that the "Hong Kong Company" definition must include the many foreign invested firms that do substantive business here, and the definition they came up with seem to be fair.

I encourage each of you to look carefully at the agreement, which can be viewed on our website www.chamber.org.hk. You can then analyze how your business can take advantage either of the zero-tariff provision, or early liberalization of some service sectors, or the lowering of some thresholds of entry, or the facilitation of certification of professionals in some sectors. It is up to each of you to use this agreement. The stage has been set, and Hong Kong's entrepreneurial spirit needs to take over now. I hope you do, since I have heard envious comments from quite a few foreign countries which would love to have such a free trade agreement with China. To help you start the analysis, we have a series of CEPA workshops in July for you, starting with a general assessment seminar on July 7 (English) and July 8 (Cantonese).

Finally, I hope you agree that this project has been one of the most fruitful that the Chamber has undertaken on your behalf. The Chamber's work is not done since there are still details in this agreement, and there may be future revisions to CEPA also. You can be sure that the Chamber will continue to monitor CEPA and work for you. Thank you for giving us your views on CEPA all through the past three years, and we hope we can count on your continuous support of the Chamber!

Regards,

Eden Y Woon
CEO

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