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Global Times

Revised agreement between mainland, Hong Kong opens services further

Global Times

By Chi Jingyi Source:Global Times Published: 2019/11/21 20:43:41

Agreement with HKSAR reduces barriers for enterprises, professionals

The government of the Hong Kong Special Administrative Region (HKSAR) and the Ministry of Commerce (MOFCOM) signed an agreement in Hong Kong concerning an amendment to the Chinese mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) on Trade in Services on Thursday, to further enhance the mainland's openness in the services trade to Hong Kong.

The signing came after a revised deal inked between the mainland and the Macao SAR on Wednesday, also to further liberalize trade in services, said the MOFCOM.

Analysts said the amendment of the CEPA with Hong Kong further provides a framework to boost the integration of the Guangdong-Hong Kong-Macao Greater Bay Area.

The revised agreement reflects the determination of the mainland and Hong Kong to advance market openness and free trade despite unrest, said HKSAR Financial Secretary Paul Chan Mo-po at the signing ceremony.

Chan signed the amendment with MOFCOM's Deputy Minister Wang Bingnan, with HKSAR Chief Executive Carrie Lam as the witness.

The revised version further reduces the barriers for Hong Kong enterprises and professionals to enter the mainland market, as part of the new liberalization measures in a number of important services segments such as finance, legal services, testing and certification and tourism services, which the HKSAR said is "in response to proposals of the Hong Kong business community for more participation in the development of the mainland market."

The amendment with Macao also waived or lowered the thresholds of entry to the mainland market, the MOFCOM said.

"It shows the country's determination to promote reform and opening-up with practical actions," Alex Lao, a Macao-based member of the Chinese People's Political Consultative Conference, told the Global Times on Thursday.

"The integration of the Greater Bay Area has actually encountered some challenges ...differences in laws and systems. The overall cooperation framework provides a guarantee mechanism for tripartite cooperation," Cao Shengxi, a research associate of the International Monetary Institute of Renmin University of China, told the Global Times.

The agreement between the mainland and Macao should be put in the broad context that the country is encouraging Macao's economy to develop in a moderately diversified way. Before, Macao's economy was mainly dependent on gambling and tourism, said Cao.

The research associate cited the incubator zone of the Guangdong-Macao traditional Chinese medicine industrial park in Zhuhai, South China's Guangdong Province as part of the initiative to encourage the diversified development of Macao's economy.

The industrial park is the first project launched under the Framework Agreement on Cooperation Between Guangdong and Macao, and it is expected to be completed by the end of the year after seven years of construction.

"Hong Kong and Macao are part of China, but ... they are two separate economic entities. The cooperation agreements signed between the two SARs and the mainland are actually concrete measures to further open up the mainland economy," said Cao.

Compared with other foreign investment sources, Macao and Hong Kong have closer ties with the mainland, he said. "Foreign investment from Hong Kong, Macao and Taiwan came earlier and faster than other foreign investment," Cao added.

Official data showed that 78 percent of new foreign investment projects in Shenzhen, South China's Guangdong Province, received funding from Hong Kong in the first three quarters of 2019, making Hong Kong a leading source of foreign direct investment.

"This revision is more targeted at the actual situation of Macao, which is conducive to giving full play to Macao's advantages in order to integrate it into the overall situation of national development," Lao Ngai Leong, a vice chairman of the All-China Federation of Returned Overseas Chinese, told the Global Times on Thursday.

Since CEPA came into force on January 1, 2004, the cumulative value of Macao's duty-free exports to the mainland has reached 1.03 billion patacas ($128 million), with 71 million patacas exempted from customs duties, according to data from the Macao SAR government.

Ding Meng, senior strategy analyst of Bank of China Macao Branch, told the Global Times on Thursday that as another SAR and offshore market besides Hong Kong, Macao can effectively play an important role as China's "window" to the world.

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