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Trade and Industry Department The Government of the Hong Kong Special Administrative Region
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Mainland and Hong Kong Closer Economic Partnership Arrangement ( CEPA )

Air Transport Services

Liberalisation Measures under CEPA

The Agreement on Trade in Services covers and consolidates commitments relating to liberalisation of trade in services provided in CEPA and its Supplements and also the Agreement between the Mainland and Hong Kong on Achieving Basic Liberalisation of Trade in Services in Guangdong.
 
Agreement on Trade in Services
Liberalisation Measures under Cross-border Services ( Positive List )
Sectors or
Sub-sectors
  • 11. Transport services
     C. Air transport services
         - Airport operation services ( excl. cargo handling ) ( CPC74610 )
         - Other supporting services for air transport ( CPC74690 )
         - Computer reservation system ( CRS ) services
         - Sales and marketing services for air transport
Specific
commitments
  1. To allow Hong Kong service suppliers to provide, in the mode of cross-border supply, contract management services for small and medium airports. The period of validity of the contract should not exceed 20 years. 1
  2. To allow Hong Kong service suppliers to provide, in the mode of cross-border supply or consumption abroad, airport management training and consultation services. 2
  3. To allow Hong Kong service suppliers to provide, in the mode of cross-border supply, sales agency services for international flights or regional flights between Hong Kong, Macao and Taiwan for the Mainland. 3
  4. To allow Hong Kong airlines to sell air tickets and hotel packages in their offices in the Mainland or through their official websites, without engaging Mainland sales agents. 4
  5. To allow contractual service providers employed by Hong Kong service suppliers to provide sales and marketing services for air transport ( limited to air transport sales agencies ) in the Mainland, except that providers not eligible for the statutory operating body qualification shall not engage in such services activities5.
Reserved Restrictive Measures under Commercial Presence ( Negative List )
Sector
1. Business services
Sub-sector E. Rental/Leasing Services without Operators
b.    Rental/leasing services relating to aircraft ( CPC83104 )
Obligations concerned National Treatment
Reserved Restrictive
Measures
Commercial Presence
Apply national treatment.
   
Sector
11. Transport Services
Sub-sector C. Air Transport Services
a. Passenger transportation ( CPC731 )
Obligations concerned National Treatment
Reserved Restrictive
Measures
Commercial Presence
  1. For the setting up and operation of public air transport companies, the Mainland party shall be the controlling shareholder, and the investment proportion of a Hong Kong service supplier ( including its affiliates ) shall not exceed 25%, and also the legal representative shall be a Chinese citizen.
  2. For the setting up and operation of general aviation enterprises engaging in business flights, aerial tours and services to industries, the Mainland party shall be the controlling shareholder.  The setting up and operation of general aviation enterprises engaging in agricultural, forestry or fisheries operations is restricted to equity joint venture or contractual joint venture with the Mainland party. The legal representative of the general aviation enterprises shall be a Chinese citizen.
   
Sector
11. Transport Services
Sub-sector C. Air Transport Services
b. Freight transportation ( CPC732 )
Obligations concerned National Treatment
Reserved Restrictive
Measures
Commercial Presence
For the setting up and operation of public air transport companies, the Mainland party shall be the controlling shareholder, the investment proportion of a Hong Kong service supplier ( including its affiliates ) shall not exceed 25%, and also the legal representative shall be a Chinese citizen.
   
Sector
11. Transport Services
Sub-sector C. Air Transport Services
c. Rental of aircraft with crew ( CPC734 )
Obligations concerned National Treatment
Reserved Restrictive
Measures
Commercial Presence
Apply national treatment.
   
Sector
11. Transport Services
Sub-sector C. Air Transport Services
d. Maintenance and repair of aircraft ( CPC8868 )
Obligations concerned National Treatment
Reserved Restrictive
Measures
Commercial Presence
Apply national treatment.
   
Sector
11. Transport Services
Sub-sector C. Air Transport Services
e. Supporting services for air transport ( CPC746 )
Obligations concerned National Treatment
Reserved Restrictive
Measures
Commercial Presence
  1. Not to invest and manage air traffic control system in the Mainland.
  2. For investment in civil airports, the Mainland party shall take the corresponding controlling shareholding position.
  3. The period of validity of the management services contract for small and medium airports shall not exceed 20 years; the provision of contract management services for large airports on a wholly-owned basis is not allowed.
  4. To allow ground services for air transport on a wholly-owned basis, excluding security-related projects.
  5. For investment in aviation oil supply projects, the Mainland party shall be the controlling shareholder.
  6. For investment in computerised reservation system projects, an equity joint venture shall be set up with the Mainland service suppliers of computerised reservation system and the Mainland party shall be the controlling shareholder.
For clarity and avoidance of doubt, Hong Kong service suppliers may submit the economic guarantee provided by Mainland-incorporated banks or guarantee companies recommended by the China Air Transport Association in their applications for the setting up of air transport sales agency enterprises on wholly-owned, equity joint ventures or contractual joint ventures basis in the Mainland.  Guarantee can also be provided by Hong Kong banks, supplemented by the economic guarantee provided by the Mainland-incorporated banks or guarantee companies recommended by the China Air Transport Association within a specified period of time after the applications have been approved by the Mainland.

1 Covering the liberalisation measures provided in CEPA Supplement.
2 Covering the liberalisation measures provided in CEPA Supplement.
3 Covering the liberalisation measures provided in CEPA Supplement X.
4 Covering the liberalisation measures provided in Guangdong Agreement.
5 The definition in Annex on Air Transport Services of the WTO's General Agreement on Trade in Services applies.
6 Covering the liberalisation measures provided in CEPA Supplement X.