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Press Release

Jia Qinglin officiates at Mainland, HK and Macao Trade and Economic Co-operation Forum
Thursday, June 29, 2006

The Chairman of the Chinese People's Political Consultative Conference, Mr Jia Qinglin, officiated at the opening ceremony of the "Mainland, Hong Kong and Macao Trade and Economic Co-operation Forum" this morning (June 29) and delivered a keynote speech.

The forum was jointly organised by the Ministry of Commerce and the Hong Kong Special Administrative Region Government, and co-organised by Hong Kong Trade Development Council and the China International Center for Economic and Technical Exchanges to mark the third anniversary of the signing of the Closer Economic Partnership Arrangement (CEPA).

The Chief Executive of the Hong Kong SAR, Mr Donald Tsang; the Chief Executive of the Macao SAR, Mr Edmund Ho; and the Minister of Commerce, Mr Bo Xilai, also addressed the forum which was attended by 600 guests from the Mainland, Hong Kong and Macao, including those senior officials from the Central and provincial governments.

Mr Jia said the signing and implementation of CEPA had promoted multi-level and wide-ranging business co-operation between the Mainland, Hong Kong and Macao and boosted the all-round growth of the economies in Hong Kong and Macao as well as helping the Mainland become more open and improve its economic structure.

"CEPA has proved to serve as a platform and powerful engine for strengthening economic and trade ties between the Mainland, Hong Kong and Macao as it speeds up the free flow of goods and services, accelerates regional economic integration and enhances complementarity, mutual benefit and common development of the three economies," the chairman said.

He added that the new CEPA measures and the new policies being studied by the State Council on expanding renminbi business announced today would bring about faster and better economic development of the three regions and instil strong vitality into economic ties and co-operation between the Mainland and Hong Kong and Macao.

Mr Tsang said Hong Kong was strategically located to "leverage the Mainland and engage ourselves globally". One of the key areas of our economic development, he said, was to create a win-win situation through strengthening economic and trade co-operation with the Mainland and complementing each other's strengths.

He said that Hong Kong's economy had now fully recovered. Along with the efforts of Hong Kong people, the implementation of CEPA had been important in precipitating the rapid recovery. "We estimate that in its first two years of implementation, CEPA has created 29,000 jobs and generated $5.4 billion in services receipts and $5.5 billion in capital investment for Hong Kong."

Since the signing of CEPA between the Mainland and Hong Kong on June 29, 2003, the two sides had been working closely with a view to broadening the scope and coverage of the arrangement. Agreements on further liberalisation under the second and third phases of CEPA were reached in 2004 and 2005.

To thrash out further liberalisation measures under CEPA, the Financial Secretary, Mr Henry Tang, and the Vice-Minister of Commerce, Mr Liao Xiaoqi, co-chaired the High Level Meeting of the CEPA Steering Committee on June 27.

The two sides signed the Supplement of CEPA on further liberalisation of trade in services in the Mainland for Hong Kong and strengthening co-operation in area of trade and investment.

On trade in services, under the supplement, from January 1, 2007, the Mainland would further relax market access conditions in the 10 areas of legal, construction, information technology, convention and exhibition, audiovisual, distribution, tourism, air transport, road transport and individually owned stores.

As regards liberalisation measures in respect of the legal services, the Mainland agreed to -

- Waive the requirement on the number of full-time lawyers employed by Mainland law firms that operate in association with Hong Kong law firms (offices),
- Waive the residency requirement on the Mainland for representatives stationed in representative offices of Hong Kong law firms (offices) on the Mainland,
- Allow Hong Kong residents who have acquired Mainland lawyer qualifications to engage in activities as agents in matrimonial and succession cases relating to Hong Kong in the capacity of Mainland lawyers,
- Allow Hong Kong barristers to act as agents in civil litigation cases on the Mainland in the capacity of citizens, and
- Allow Hong Kong residents who have acquired Mainland lawyer qualifications or legal professional qualifications to undergo internship in a branch office of a Mainland law firm set up in Hong Kong in accordance with the Outline for Practical Training and the Guidelines on Practical Training as required on the Mainland.

On tourism services, Hong Kong travel agents in Guangdong Province will be allowed to apply for the operation on a pilot basis of group tours to Hong Kong and Macao for residents of Guangdong Province (residents registered with permanent residence in Guangdong Province).

The supplement also allows Hong Kong air transport sales agencies to set up wholly-owned air transport sales agencies on the Mainland. The registered capital requirement will be the same as that for the Mainland enterprises. Hong Kong service suppliers are also allowed to set up wholly-owned construction engineering cost consulting enterprises on the Mainland. When applying for qualification, the performance of the Hong Kong service suppliers in both Hong Kong and the Mainland is taken into account in assessing their qualification on the Mainland.

On trade and investment facilitation, to promote co-operation in the area of protection of intellectual property between the two places, the two sides agree to add protection of intellectual property into the area of trade and investment facilitation under CEPA.

The two sides recognise that strengthening intellectual property protection plays an important role in advancing economic development and promoting economic and trade exchanges and co-operation between the two places. Both sides also agree to strengthen co-operation in the area of intellectual property protection through the setting up in Hong Kong the Intellectual Property Protection Co-ordination Centre to exchange and communicate information relating to intellectual property protection of the two places.

On top of the new liberalisation measures under CEPA, the State Council is earnestly studying the scope for further expansion of renminbi business in Hong Kong, which includes allowing Hong Kong importers to settle direct import trade from the Mainland in renminbi, and allowing financial institutions on the Mainland to issue renminbi financial bonds in Hong Kong on a pilot basis. This is a major policy initiated by the Central People's Government in support of the consolidation and development of Hong Kong's status as an international financial centre. The HKSAR Government will maintain close liaison with the Mainland authorities to expedite the preparatory work for an early launch of these two types of new business.

Under CEPA, the Mainland has agreed to give all products of Hong Kong origin and meeting CEPA rules of origin tariff free treatment. On trade in services, since the implementation of CEPA the Mainland has also agreed to provide preferential treatment to Hong Kong service suppliers in 27 service areas. Details of further liberalisation measures under the Supplement and the relevant annexes have been promulgated in the Trade and Industry Department's website at http://www.tid.gov.hk/english/cepa/index.html

At today's forum, two panel discussions were held on regional economic co-operation. The theme of the first discussion is the trend of regional economic cooperation - finance, tourism and logistics. Hosted by the Financial Secretary, guest speakers of the session were Liao Xiaoqi; the Deputy Director of the China National Development and Reform Commission, Mr Bi Jingquan, the Deputy Governor of the People's Bank of China, Ms Hu Xiaolian; and the Chairman of the China National Tourism Administration, Mr Shao Qiwei.

The moderator of the second panel discussion was the Dean of Business and Management of the Hong Kong University of Science and Technology, Professor K C Chan. Guest speakers of the session exchanged their views on the prospect of co-operation among Mainland, Hong Kong and Macao under CEPA. They were the Deputy Director of Economic and Trade Commission of Guangdong Province, Mr Liu Xiaojie; the Executive Director of the Hong Kong Trade Development Council, Mr Frederick Lam; and the Vice President of Macao Chamber of Commerce, Mr Ho Iat-seng.



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