The Hong Kong General Chamber of Commerce welcomes the signing of the Annexes of the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) with the central government.
The Chamber CEO, Dr Eden Y Woon said: "The Chamber is happy to see that many details which the business community has been asking for in the past three months are now filled in, and now we can see the full picture of an excellent WTO-compliant free trade agreement that can truly benefit many businesses in Hong Kong and also in the Mainland. The Chamber encourages businesses to seriously study the provisions and take steps to use CEPA quickly, since many benefits of CEPA are time-related."
The Chamber feels that the Rules of Origin for "Made in Hong Kong" goods are favorable to Hong Kong. Most have adhered closely to the current principles which Hong Kong uses to determine origin of products. For the goods using 30% value-added as criteria, the good news is that design, research and development costs will now be taken into account in the determination of rules of origin. The Chamber feels that "zero tariff" can stimulate some manufacturing here in Hong Kong, and with zero tariff available for all products two years later, the benefits for manufacturing and investment in Hong Kong would be even more extensive.
On services, the Chamber welcomes the addition of the telecommunication sector to the original 17 which will enjoy some kind of liberalization and once again urges businesses to take immediate steps to take advantage of CEPA. "Telecom is an important business in Hong Kong. Significantly, it is the first sector where Hong Kong businesses will get a time advantage in China,” said Dr Woon, referring to the October effective date of the telecom commitment.
"Our operators in value-added telecom services now have a time-advantage to bring experience and know-how into China to help China prepare for future foreign competition," Dr Woon added.
"We fully understand the reason behind some new clarifications in the definition of 'Hong Kong companies' due to change of majority ownership, but we feel that it is an acceptable compromise that will still be able to encourage potential investment activity in Hong Kong due to CEPA,” said Dr Woon.
"All in all," Dr Woon concluded, "although not everyone may benefit from CEPA, and although we need to continue to work on Phase II of CEPA, the current CEPA does usher in a new age of "middleman platform" for Hong Kong. This is a phenomenon which has already been recognized not only within Hong Kong, but also by foreign businesses and Mainland provinces, cities, and enterprises. It is now up to businesses to use CEPA in their own way quickly. The Chamber will now concentrate on helping businesses with the implementation stage in the next few months."
For media inquiries, please contact Dr Eden Woon, CEO, HKGCC at 2823-1211