On the 29th September six annexes of CEPA were signed:
· 187 of 273 HK goods will enjoy zero tariff status using existing rules of origin
· · Telecommunications was added as a service that will benefit from CEPA to the existing 17 services. For the list of services and benefits.
· Telecommunications companies will be given access to five value added services.
· Foreign companies acquiring a Hong Kong firm will have to wait a year before qualifying to enter the mainland market under CEPA.
HK investors will be able to buy bigger stakes in mainland insurance companies – 24.9%.
· All companies interested have to apply for
In the future
· Talks will begin soon on next round of CEPA, CEPA is an open and continuous effort, and there will be new developments.
· Promise to Lower more barriers to cross border trade
· Discussions will include opening up of mainland education, culture and sports, Information technology, and environmental services,.
· Other products than the 273 under the agreement will enjoy 0 tariffs at the latest by Jan 1 2006.
THE INDUSTRIES THAT STAND TO BENEFIT
This is how 18 service industries in Hong Kong will benefit from access to the mainland market under Cepa:
Management and consulting: Most companies can set up wholly-owned enterprises on the mainland.
Conventions: Hong Kong companies can establish wholly-owned operations, convention services and exhibition services.
Advertising: Firms from the city can establish wholly-owned advertising companies on the mainland.
Accounting: Permits allowing Hong Kong companies to conduct auditing services on the mainland will be valid for one year. Accountants from Hong Kong who have qualified and practiced on the mainland will be treated as mainland accountants.
Construction and real estate: Hong Kong firms can establish wholly-owned operations.
Medical and dental: Hong Kong doctors can work on the mainland for up to three years. Hong Kong medical workers can sit exams to work on the mainland.
Distribution (excluding tobacco): Hong Kong firms providing distribution services, such as retailing or franchising, can set up wholly-owned operations. Hong Kong car dealers can set up wholly-owned retail operations across the border with up to 30
outlets.
Logistics: Hong Kong companies can set up wholly-owned operations on the mainland.
Freight forwarding: Hong Kong firms can operate on a wholly-owned basis and enjoy equal treatment as mainland companies for the minimum registered capital requirements.
Storage and warehousing: Hong Kong companies can operate on a wholly-owned basis on the mainland.
Transport: Hong Kong companies can operate on the mainland on a wholly-owned basis.
Tourism: Hong Kong companies can run hotels or restaurants over the border on a wholly-owned basis.
Audiovisual: Chinese-language movies produced in Hong Kong can be distributed on the mainland and be exempted from the quota of 20 films per year in China's World Trade Organisation commitments. Movies co-produced with the mainland will be treated as mainland films.
Legal: Minimum residency requirements for Hong Kong representatives on the mainland are waived for those operating in Shenzhen and Guangzhou and shortened to two months for other areas. Hong Kong lawyers will be able to work for mainland firms.
Banking: The asset requirement for banks to establish branches on the mainland is reduced to US$6 billion from US$20 billion.
Securities: Hong Kong Exchanges and Clearing can set up a representative office in Beijing.
Insurance: The maximum limit of capital participation by a Hong Kong insurance firm in a mainland insurance company is 24.9 per cent. Hong Kong insurance agents who obtain mainland professional qualifications can practise there.
Telecommunications: Hong Kong companies can set up joint-venture enterprises on the mainland to provide value-added services. There will be no geographic restriction for joint-venture enterprises formed by Hong Kong service suppliers and the mainland to provide value-added telecommunication services.
The full text of Cepa is available on the Trade and Industry Department's website at
www.tid.gov.hk/english/cepa/
For inquiries on rules of origin, certificate of origin and factory registration phone 2398 5525, fax 2787 6048, or e-mail cepaco@tid.gov.hk
For inquiries on Certificate of a Hong Kong Service Supplier phone 3403 6428, fax 3525 0988, or e-mail hkss@tid.gov.hk