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Trade and Industry Department The Government of the Hong Kong Special Administrative Region
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Press Release 2009

Further services liberalisation under CEPA
Saturday, May 9, 2009

The Hong Kong Special Administrative Region Government and the Central People's Government today (May 9) agreed on further services liberalisation and trade co-operation under the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA). 

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 VI to CEPA today.  

Under Supplement VI to the CEPA, the Mainland will introduce 29 liberalisation measures covering 20 service sectors, including two new sectors (research and development, and rail transport).  Thus, the total number of service sectors covered by CEPA will be expanded from 40 to 42. Among them, the noteworthy liberalisation measures are:

On tourism, Mainland travel agents authorised to operate group tours to Taiwan can organise group tours for Mainland residents, who hold a valid exit/entry permit for travelling to and from Taiwan and travel endorsement, to enter and remain in Hong Kong in transit. This measure aims to facilitate the travel trade in the Mainland and Hong Kong to develop multi-destination tour products.  Moreover, Hong Kong permanent residents with Chinese citizenship can obtain Mainland outbound tour escort credentials. They can be employed by Mainland international travel agents authorised to operate outbound group tours for Mainland residents, as well as by Hong Kong and Macau travel agents authorised to operate group tours to Hong Kong and Macao for Mainland residents.

On banking, branches established by a Hong Kong bank in Guangdong Province can set up "cross-location" sub-branches within Guangdong Province.  In other words, Hong Kong commercial banks can establish service points in other administrative areas without first establishing branches there. This will enable the banks to expand their business network, and improve the quality and efficiency of banking services provided to enterprises (including Hong Kong-invested enterprises in Guangdong Province).

On securities services, qualified Hong Kong securities companies and Mainland securities companies which satisfy the requirements for establishing subsidiaries can set up in Guangdong Province joint venture securities investment advisory companies, with the scope of business focusing specifically on securities investment advisory services.  The percentage of shareholding of the Hong Kong securities company could, at a maximum, reach 1/3 of the total shareholding of such a joint venture securities investment advisory company.  This will allow Hong Kong securities companies to participate in the development of the Mainland's securities market.

On audio-visual services, Hong Kong service suppliers (HKSS) can provide videos and sound recording (including motion picture products) distribution services on the Mainland in the form of wholly-owned operations. In addition, the post-production of domestic films (including co-productions) is allowed to be processed in Hong Kong after obtaining the approval of the State Administration of Radio, Film and Television.

On telecommunications services, HKSS can distribute in Guangdong Province fixed/mobile telephone service cards which can only be used in Hong Kong.

In relation to legal services, the Mainland will allow Hong Kong legal practitioners who have at least five years' experience in legal practice and who have passed the National Judicial Examination to undergo intensive training offered by lawyers associations on the Mainland that lasts for at least one month in accordance with the relevant Mainland rules. Upon completion of the training and passing of the assessment, they can apply to practise as lawyers on the Mainland. Moreover, the Mainland will also allow Hong Kong law firms which have set up representative offices on the Mainland to operate in association with Mainland law firms in Guangdong Province; the Mainland law firms shall have been established for one year or more, with at least one person who established the firm having been in legal practice for five years or more.

On convention and exhibition, HKSS can organise exhibitions, in the form of cross-border supply, in Beijing Municipality, Tianjin Municipality, Chongqing Municipality, Zhejiang Province, Jiangsu Province and Fujian Province on a pilot basis. Furthermore, enterprises set up by HKSS on a wholly-owned, equity joint venture or contractual joint venture basis in the provinces and autonomous regions of Guangxi, Hunan, Hainan, Fujian, Jiangxi, Yunnan, Guizhou and Sichuan can organise overseas exhibitions on a pilot basis.  Participating enterprises should be registered enterprises in that province or autonomous region.  These liberalisation measures represent further geographical extension of the 2007 measure on cross-border supply of services and the 2008 measure on allowing HKSS to organise overseas exhibitions on a pilot basis.

On transportation services, HKSS can construct, operate and manage the Shenzhen Metro Line 4 project in Shenzhen in the form of wholly-owned operations. This is a newly added service sector. In addition, HKSS can set up wholly-owned shipping companies on the Mainland to provide regular business services such as shipping undertaking, issuance of bills of lading, settlement of freight rates, signing of service contracts, etc. for the shipping transport between Hong Kong and Class B ports in Guangdong operated by HKSS using chartered Mainland vessels.

On printing and publishing services, HKSS can establish typesetting and production services companies on a wholly-owned, equity joint venture or contractual joint venture basis on the Mainland to provide pre-press services such as proof-reading, design and typesetting for books.

Regarding research and development services, which is also a newly added sector, HKSS can set up wholly-owned enterprises on the Mainland to provide research and experimental development services in the natural sciences and engineering.

Following on the building block approach in further liberalisation, Supplement VI to the CEPA also includes nine measures for early and pilot implementation in Guangdong Province, covering sectors which include legal, convention and exhibition, public utility, telecommunications, banking, securities, maritime transport and rail transport.  These measures can enhance the co-operation of the services industry between Guangdong and Hong Kong.

All the services liberalisation measures will take effect from October 1, 2009. To allow the trade to enjoy the benefits earlier, the effective date is three months ahead of the usual schedule which falls on the first day of following year.

Apart from service liberalisation, the two sides have also agreed to enhance financial co-operation and take forward the work on mutual recognition of professional qualifications.

To enhance financial co-operation, qualified Mainland securities companies approved by the China Securities Regulatory Commission can set up subsidiaries in Hong Kong in accordance with the relevant requirements.  Furthermore, the Mainland will also actively explore the introduction on the Mainland of “open-end index-tracking exchange-traded fund”, the portfolios of which are constituted by Hong Kong listed stocks.

Regarding mutual recognition of professional qualifications, Supplement VI to CEPA also includes a number of measures to encourage mutual recognition of professional qualifications as well as technical exchange work among professionals from the accounting, construction, real estate and printing sectors.  On medical and dental services, Hong Kong pharmacists can sit for examination and register on the Mainland. These measures will provide greater business opportunities for the trade and facilitate the upgrading of the professional standards of the two places.

On the whole, the new measures can help enhance HKSS' competitiveness in the Mainland.  Such measures will not only help enterprises overcome the current financial crisis, but will also promote the long-term economic development of both sides.

Details on CEPA including the newly agreed liberalisation and co-operation measures will be uploaded to the Trade and Industry Department's CEPA website: www.tid.gov.hk/english/cepa/index.html

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