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The Mainland/Hong Kong Closer Economic Partnership Arrangement (CEPA) is to be effective from Jan. 1, 2004, while groups of mainland entrepreneurs and government officials have half a year before already rushed into Hong Kong to seek financial and trade opportunities.

CEPA, signed on June 29 by the Central Government and the Hong Kong Special Administrative Region government, covering areas of trade in goods, trade in services and trade and investment facilitation. Its basic objective is to phase out tariffs and non- tariff barriers on trade in goods, phase in liberalization of trade in services and promote trade and investment facilitation in an effort to bring about common development by upgrading the economic partnership between the Mainland and Hong Kong.

Initiated by a governmental delegation of Guangdong province, delegations from Shanghai, Hubei, Sichuan and Liaoning have over the past several months come in succession to Hong Kong, making promotion and talking with local entrepreneurs to seek more contracts.

On Aug. 5, the Hong Kong government received a Guangdong delegation led by Governor Huang Huahua, along with officials from more than 50 government departments. A meeting was held to expand channels in implementing CEPA practically and effectively. The two sides decided to set up a new mechanism of Hong Kong/Guangdong cooperation, by which 12 major financial, trade, tourism, and service projects were put on priority of cooperation in line with CEPA.

On Oct. 28, the Shanghai governmental delegation to Hong Kong announced that more than 1,000 high-salary vacancies are open for Hong Kong talent.

Shanghai Mayor Hanzhen said that his developing city needs to learn from the developed Hong Kong in many areas, and the two cities have great potential for exchange and cooperation, especially under CEPA.

CEPA is regarded as precious deposits for Hong Kong and the mainland people. As of Jan. 1, 2004, goods of Hong Kong origin under 273 tariff items will enjoy zero tariff treatment when coming into the Mainland. And zero tariffs will apply to other goods of Hong Kong origin no later than Jan. 1, 2006. On trade in services, effective Jan. l, 2004, the Mainland will implement some of the commitments it made to the World Trade Organization (WTO) members ahead of schedule for the benefit of Hong Kong.

Experts said that CEPA has "cut down distinctively the doorsills" of the mainland and Hong Kong exchange in goods, services and people. Statistics show that there are now more than 2,000 mainland enterprises running business and over 100 mainland enterprises issuing shares in Hong Kong. They will benefit from CEPA in the coming years together with more and more Hong Kong factories, firms and banks with mainland connections.

As a special arrangement under the "one country, two systems" principle and the WTO framework, CEPA will demonstrate its power in the near future. Both sides believe that this arrangement will bring more opportunities to Hong Kong's business communities and provide some practical help to Hong Kong's economic recovery and growth.

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