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Trade and Industry Department The Government of the Hong Kong Special Administrative Region
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Press Release 2008

Further liberalisation under CEPA and deepening economic and trade co-operation with Guangdong Province
Tuesday, July 29, 2008

The Hong Kong Special Administrative Region Government and the Central People's Government (CPG) today (July 29) agreed on further services liberalisation under the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA). 

With the approval of the CPG, Hong Kong and Guangdong will also implement a package of liberalisation and facilitation measures on an early and pilot basis to enhance mutual economic and trade co-operation. 

Witnessed by the Chief Executive, Mr Donald Tsang, and other guests, the Financial Secretary, Mr John C Tsang, and the Vice-Minister of Commerce, Mr Jiang Zengwei, signed the Supplement V to the CEPA today. 

The Chief Executive said that the new package of CEPA liberalisation measures and the measures to deepen economic and trade co-operation between Hong Kong and Guangdong would open up more opportunities for Hong Kong traders who wish to enter the Mainland market, capitalise on Hong Kong's advantages in tapping the Mainland market, and support the development of service industries in the Mainland in response to the National 11th Five-year Plan. These measures would not only bring about mutual economic benefits, but would also create a solid platform for enhancing economic integration between the two places.

"The current CEPA package and the Guangdong pilot measures will offer new business opportunities on the Mainland for Hong Kong businesses and service suppliers, making Hong Kong even more attractive to overseas investors," said the Chief Executive. He said he believed that the Guangdong pilot measures would foster closer economic integration and further facilitate economic development in the two places in the long run.

Under Supplement V to the CEPA, the Mainland will introduce 29 liberalisation measures covering 17 services sectors, including existing sectors such as conventions and exhibitions, banking, construction and related engineering services, social services, tourism, accounting, and medical and dental services, as well as two new sectors, namely services incidental to mining, and related scientific and technical consulting services. The total number of services sectors covered by CEPA will be expanded from 38 to 40. 

In conventions and exhibitions, enterprises set up by Hong Kong service suppliers (HKSS) on a wholly-owned, equity joint venture or contractual joint venture basis in Beijing, Tianjin, Chongqing and Zhejiang will be allowed to organise overseas exhibitions on a pilot basis (this being an extension of the 2007 liberalisation measure which covers Guangdong and Shanghai).

In banking, any Mainland-incorporated banking institution established by a Hong Kong bank will be allowed to locate its data centre in Hong Kong, subject to fulfilment of certain requirements.

In construction and related engineering services, Hong Kong professionals obtaining the Mainland's registered Urban Planner or Supervision Engineer qualification will be allowed to register/practise in Guangdong regardless of whether they are registered practitioners in Hong Kong or not. Restrictions on the proportion of the total capital contributed by the Mainland partners in setting up construction and engineering design enterprises in the form of an equity joint venture or contractual joint venture on the Mainland will be removed.

In relation to social services, HKSS will be allowed to operate welfare agencies for persons with disabilities in the form of wholly-owned private non-enterprises in Guangdong on a pilot basis (this being an extension of the 2007 liberalisation measure which covers only elderly services in Guangdong).

In tourism, Guangdong will be delegated the authority to approve applications submitted by HKSS for setting up travel agents on a wholly-owned, equity joint venture or contractual joint venture basis in Guangdong. Hong Kong permanent residents with Chinese citizenship will be allowed to take the "Mainland Qualification Examination for Tourist Guide". Those who have passed the examination can obtain the "Mainland Tourist Guide Certificate" in accordance with the relevant requirements.

In accounting, the validity period of the "Provisional Licence to Perform Audit-related Services", applied for by Hong Kong accounting firms for the purpose of conducting auditing business on a temporary basis on the Mainland, will be extended from two years to five years. Dedicated examination centres in Hong Kong, Shenzhen and Dongguan will be set up for Hong Kong residents to sit the Mainland's accounting qualification examinations. 

In medical and dental, HKSS will be allowed to set up wholly-owned outpatient clinics in Guangdong. There will be no total investment requirement in setting up outpatient clinics by HKSS in Guangdong. In addition, there will be no restriction on the ratio of capital investment between HKSS and Mainland service suppliers in setting up outpatient clinics in the form of equity joint ventures or contractual joint ventures in Guangdong. The health administrative department in Guangdong will be responsible for the project establishment and approval procedures for setting up outpatient clinics by HKSS. Qualified Hong Kong permanent residents with Chinese citizenship and with specialist doctor qualifications will be allowed to apply for and obtain the Mainland's "medical practitioner's qualification certificate" through accreditation.

Supplement V to the CEPA also opens up the Mainland market in two new services sectors. HKSS will be allowed to provide services incidental to mining on a contractual joint venture basis (confined to exploration of oil and natural gas only), and related scientific and technical consulting services (prospecting and surveying services for iron, copper and manganese) on a wholly owned, equity joint venture or contractual joint venture basis. 

All the services liberalisation measures will come into force on January 1, 2009. 

As a further step to deepen Hong Kong-Guangdong economic and trade co-operation, the Governments of Guangdong and Hong Kong will implement a total of 25 liberalisation and facilitation measures for early and pilot implementation in Guangdong, covering accounting, construction and related engineering, medical and dental, placement and supply services of personnel, environment, social services, tourism, education, maritime transport, road transport, and individually-owned stores. Seventeen of the measures are included under CEPA. Some of the other early and pilot measures cover education and tourism. 

In education, Guangdong will be delegated with approval authority on applications submitted by Hong Kong institutions to set up schools for Hong Kong people's children. A joint approval mechanism by the Ministry of Education and the Guangdong authorities will be set up to jointly assess and approve education institutions and projects operated jointly by Guangdong and Hong Kong.

Regarding tourism, the coverage of "simplified entry arrangement for a period of 144 hours" will be extended to the whole of Guangdong. Mainland-authorised Hong Kong travel enterprises will be allowed to organise group tours to Hong Kong Disneyland for non-Guangdong residents who have resided and worked in Shenzhen for over one year. Guangdong' s pilot programme for a wholesale tourism reform including strengthening of Guangdong-Hong Kong tourism co-operation will be supported.

The two sides also agreed to enhance co-operation in branding, trademark, e-commerce in the area of trade and investment facilitation, and to continue work on mutual recognition of professional qualifications in accounting and construction. In this regard, an agreement on trademark co-operation and two agreements on accounting were signed in conjunction with the signing of the Supplement V today.

The CEPA was first signed in June 2003. Under CEPA, the Mainland agrees to give all products of Hong Kong origin tariff free treatment if they meet the CEPA rules of origin. On trade in services, the Mainland has already allowed preferential treatment to Hong Kong service suppliers in 38 service sectors. Details on CEPA including the newly agreed liberalisation and co-operation measures are available on the Trade and Industry Department's CEPA dedicated website at www.tid.gov.hk/english/cepa/index.html.

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