A Chinese mainland official said last week that zero tariffs on
all products originating from Hong Kong will be implemented from
January 1 next year.
Wang Liaoping, director of the Ministry of Commerce's
Taiwan, Hong Kong and Macao Affairs Department, said that under the
third phase of the Closer Economic Partnership Arrangement (CEPA),
an additional 300 categories of products, ranging from textile
products, garments, and food to electrical products and machinery,
would be covered.
Wang said both sides had reached an accord over the standards of
origin of watches and clocks, a market in which Hong Kong is
advanced, so that watch and clock products processed in Hong Kong
would enjoy "qualified tariff-free treatment."
As for the service sector, the mainland is also to open more
industries to Hong Kong investors in addition to the existing 26,
such as logistics, distribution, advertising and tourism, already
available.
According to a survey conducted by Hong Kong authorities, its
manufacturers, taking advantage of the CEPA, are expected to double
their exports to the mainland this year.
Bilateral trade volume reached a record high last year after the
arrangement was launched.
The mainland's imports from Hong Kong reached US$4.0 billion in
the first four months of 2005, an increase of 14.3 percent
year-on-year. Exports to Hong Kong stood at US$33.7 billion, up
24.5 percent.
Since the implementation of the CEPA in January 2004, more than
3,000 certificates of origin have been issued to Hong Kong
companies, covering products with a total value of US$150 million,
ensuring their tariff-free treatment when entering the
mainland.
The CEPA has not only facilitated trade flow but also promoted
bilateral investment, experts said.
Hong Kong investors are increasing their investment in the
mainland as they are allowed to tap industries ahead of foreign
rivals.
During the CEPA's first 12 months, 19 Hong Kong enterprises
applied to invest in mainland industries, compared to just 18 in
the previous 11 years, according to the Ministry of Commerce.
(China Daily July 19, 2005)