The Hong Kong General Chamber of Commerce submitted a 10-page paper to the Hong Kong SAR government last week detailing more than 50 outstanding issues and clarifications which the business sectors deem necessary on the CEPA provisions.
Chamber CEO Dr Eden Woon said: "During our recent dialogues with members and with some local and overseas companies on CEPA, and based on our own CEPA workshops, many questions have arisen. Some are on gaps that still need to be filled; some are for clarification of existing provisions; and others are regarding points not mentioned in the present text. We collected these questions and prepared this paper for the government."
"We also welcome the Chief Executive's remarks last Friday about possible enhancements of CEPA. The areas of concern that the Chief Executive mentioned had been reflected in the Chamber's question list," Dr Woon added.
On trade in goods, the Chamber would like to support the government's intention to maintain, as much as possible, the status quo in determining Rules of Origin (ROO). Questions like if flexibility can be built to use 25% value added as an alternative to the current "principal processes" regulations, whether a "binding" COO determination for both the 273 items now and any further items can be sought, and whether a "Combined ROO" which takes into account the Mainland content of the product can be considered, were asked.
On definition of Hong Kong companies, the Chamber feels that there is some confusion between CEPA and the GATS provisions that requires clarification. In addition, further elaboration may be needed on defining "similar business" and the criteria of employment – for example, whether other forms of employment like part-time workers, interns, contract workers, etc are counted.
In addition, there are questions in some individual service sectors which vary from industry to industry. A 'wish list' on sectors that may have further liberalization were also submitted to the SAR government to consider proposing to the central government.
The Chamber believes that the "Trade and Investment Facilitation" section could be the most significant section of CEPA in the long run if it can deal with the numerous problems of "investment climate" in China, ranging from cumbersome procedures, to non-transparency, to rampant fee collection, to customs problems, to commercial disputes, that plague almost all Hong Kong investments in China. The Chamber asked a series of questions to seek clarifications on how provisions in this section can ease the practical problems faced by many Hong Kong investors in China.
"We believe that if these questions in our letter can be addressed as quickly as possible, many businesses will be in a better position to decide whether they can take advantage of CEPA or not. January 1, 2004 is five months away, but businesses need a long lead-time in order to make a business plan and investment decisions. We are glad to see the government's initiative to move forward the CEPA agenda to include other liberalizations, and welcome the decision that the rules of origin consultation could reach consensus in September. The earlier these questions can be answered, the more useful CEPA is to Hong Kong," Dr Woon concluded.
For inquiries, please contact Dr Eden Woon, CEO, HKGCC at 2823-1211
>> For full text of the Chamber submission, please click here