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Sunday, Oct 25, 2020

Hong Kong investors to get easier access to mainland China markets in latest amendment to trade pact

Financial Secretary Paul Chan says new trade ­arrangement will be crucial to the city’s embattled economy. Growth has been battered by the double blow of the US-China trade war and months of anti-government protests

Restrictions on Hong Kong investors’ access to mainland China markets in tourism, testing and certification, television, film and other industries will be further loosened next year in changes to a trade pact that officials hope will help the city move out of recession amid the ongoing social unrest.

In an annual amendment to the Closer Economic Partnership Arrangement (Cepa) trade deal on Thursday, the Hong Kong and mainland governments agreed to allow local companies to further penetrate into markets across the border.

Financial Secretary Paul Chan Mo-po said the new trade arrangement would be crucial to the city’s embattled economy.

“The amendment to Cepa will help Hong Kong companies and professionals break into the mainland market at this challenging time,” he said. “Ongoing protests have affected the economy and stopping violence will be key to stabilising it.”

Cepa was the first free-trade agreement between the mainland and Hong Kong and was signed in 2003 to help the city’s sagging economy recover from the impact of the Severe acute respiratory syndrome outbreak.

Hong Kong’s economy has recently been battered by the double blow of the US-China trade war and months of anti-government protests which have descended into worsening levels of violence.

The government forecasts the economy will shrink 1.3 per cent in 2019 from last year when it grew 3 per cent from 2017. Hong Kong’s gross domestic product contracted for two consecutive quarters as of September 30, meaning the city was in a recession.

The latest Cepa deal will expand the scope of testing products under the mainland’s compulsory certification system from made-in-China goods to products imported from anywhere.

To attract more overseas visitors, foreign tour groups entering the Pearl River Delta area and Shantou from Hong Kong will be able to reach more destinations through a mainland transit policy that allows a 144-hour stay without a visa.

Business sectors have welcomed the new measures, which take effect on June 1 next year.

“The tourism arrangement is encouraging and will help position Hong Kong as a starting base for foreign travellers heading across the border,” tourism sector lawmaker Yiu Si-wing said.

“The government will need to lay out details on how the arrangement will be implemented to avoid confusion for travellers.”

To boost cross-border film development, restrictions will be removed on the percentage of Hong Kong principal creative personnel and artists and mainland-related content while fees for establishing co-production projects will be waived.

“The move will help Hong Kong film producers be better prepared when they apply for funding by easing their worries on meeting mainland requirements,” said Wilfred Wong Ying-wai, chairman of promotion body the Hong Kong Film Development Council.

He added the council was planning to nurture talent by sending young or inexperienced filmmakers or other practitioners to Beijing to study film production.

The Hong Kong General Chamber of Commerce, the city’s biggest business group, welcomed the new initiatives.

“The new measures introduced in the agreement should create more opportunities for Hong Kong service professionals on the mainland,” chamber chairman Aron Harilela said. “Companies that have been suffering from slowing business resulting from the protests and trade war will find the new opportunities particularly helpful.”

Hong Kong has been rocked by more than five months of citywide protests, triggered by the now-withdrawn extradition bill. An escalation of violence and vandalism has seen subway stations, university campuses and other public facilities hit, while shops, banks and restaurants with connections to the mainland have also been targeted.


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