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Address at the “Tenth Anniversary of CEPA, Win-win Cooperation between Guangdong and Hong Kong”Forum by Vice Minister Gao Yan


Ladies and gentlemen,
Good afternoon! I am very glad to attend the “Tenth Anniversary of CEPA, Win-win Cooperation between Guangdong and Hong Kong” forum. First, on behalf of the Ministry of Commerce, I’d like to congratulate on the opening of this forum.

The scene of signing CEPA ten years ago is still vivid in our mind. At that time, we just got out from the Asian financial crises and were faced with many new challenges and tasks for trade and economic exchanges between Hong Kong and the mainland.The signing and implementation of CEPA has provided an institutional arrangement for the trade and economic exchanges under the “one country, two systems” frame, and injected a new lease of life into the cooperation and development between the two sides. Over the past ten years, CEPA was taken forward every year, with nine supplementary agreements signed successively, plus a new one pending signature this year. The mainland is opening wider to Hong Kong year by year. A rather systematic opening-up system has come into focus. Hong Kong has always enjoyed the highest degree of openness the mainland has ever accorded to the outside world. In terms of trade in goods, the mainland began with duty free treatment on 273 products originated in Hong Kong in 2003; by now, all products originated in Hong Kong enjoy a “zero tariff”, realizing the liberalization of trade in goods. In terms of trade in services, the mainland adopted 41 opening-up measures in 18 services sectors for Hong Kong in 2003; and by now, that number has increased by ninefold to a total of 338. Furthermore, in terms trade and investment facilitation, the mainland has also intensified cooperation with Hong Kong in ten areas including trade and investment promotion, industry cooperation, intellectual property protection and brand cooperation. Cooperation on finance, tourism and recognition of professional certificates between the mainland and Hong Kong is also deepening and broadening. Meanwhile, to strengthen Guangdong-Hong Kong cooperation, efforts were made to have some CEPA initiatives first implemented and tested in Guangdong province. More than 80 opening-up measures were first implemented in Guangdong. It is fair to say that the decade of CEPA is a decade of mutual benefits and development of Hong Kong and the mainland, a decade of win-win cooperation between Guangdong and Hong Kong, and also a decade of the success story of “one country, two systems”.

Ladies and gentlemen,
As an important policy to support Hong Kong’s economic and social development, CEPA has enhanced the economic development and intensified economic and trade exchanges between Hong Kong and the mainland.

The implementation of CEPA has played an important role in consolidating Hong Kong’s position as an international financial center, shipping center and trade center., and in promoting modern services industries in Hong Kong. Thanks to the good policy environment created by CEPA, a total of 15 Hong Kong banks set up more than 300 branches and subbranches in the mainland since 2003. Six Hong Kong banks including the Bank of East Asia, HSBC and Hang Seng Bank were given the approval to set up 55 subbranches in Guangdong province alone, achieving a full coverage of the province. Assets of Hong Kong banks are expanding and all business lines are developing rapidly. In financial cooperation, CEPA has positively supported domestic enterprises to get listed in Hong Kong. At present, the market capitalization of domestic enterprises listed in Hong Kong exceeds half of the total market capitalization of Hong Kong Stock Exchanges. Trading and logistics are the two areas in the mainland with the largest amount of investment from Hong Kong through CEPA’s preferential measures. At present, more than 1500 trading and logistics companies have applied for CEPA preferences to invest in the Chinese mainland, leaving great room for small- and medium-sized trading and logistics companies to develop. In the TV and film industry, great cooperation achievements were made, with 294 films produced through collaboration between the two sides since 2003, accounting for 68.5% of all the films that were produced through mainland’s cooperation with overseas partners. Among those films, more than 40 films had a box office value of over 100 million RMB. In addition, architectural design, legal service, and talent intermediary agency have also benefited from CEPA and developed rapidly in the Chinese mainland. CEPA allows Hong Kong to invest in the Chinese mainland’s services sectors on more favorable terms, which has increased the overall turnover of Hong Kong’s services industry and played a positive role in consolidating Hong Kong’s three central positions.The investment profit repatriated from the mainland to Hong Kong in 2012 was USD35.6 billion, doubling that in 2007.

The implementation of CEPA promotes the mainland’s reform and opening up. CEPA is an important part of the mainland’s opening up strategy. Over the past ten years, CEPA has always represented the highest degree of the mainland’s openness, and offered precious experience for the mainland to expand its opening up, thus improving the overall level of openness of the mainland to the outside world. In recent years, a large number of Hong Kong enterprises invested and operated in the mainland through the favorable measures of CEPA, brought internationalized operating ideas and state-of-the-art services modes to the mainland, contributed to the sound interaction and common development between enterprises of Hong Kong and the mainland, and improved the overall level of the services industry of the mainland. The openness under CEPA has also played a visible role in the reform of the mainland’s services industry management system. With the continued implementation of CEPA initiatives, governments in the mainland refreshed their thinking, broke through current system and supporting measures, broadened the fields of opening-up, and improved policies and regulations. To adapt to CEPA implementation, the central government revised a series of laws and regulations, promoting the reform and improvement of the mainland’s administrative regime and management models.

The implementation of CEPA made the economic and trade relation between the Chinese mainland and Hong Kong closer. As the implementation effect of CEPA becomes visible,the free flow of economic factors, such as commodities, capital, personnel and information, becomes more smooth, and the economic integration of the two sides gets deeper. In terms of trade, Hong Kong and the mainland are each other’s biggest trading partner. The total volume of trade in 2012 reached USD341.49 billion,, four times that of 2013, which was USD87.44 billion. On investment, Hong Kong is the mainland’s biggest source of inward FDI and biggest destination of outward investment. By the end of June, 2013, the mainland’s actually utilized investment from Hong Kong reached USD629.06 billion. Hong Kong investments took up 46.9% of the mainland’s total absorption of overseas investment. The mainland’s direct investment to Hong Kong in the non-financial sectors reached USD629.06 billion, accounting for about 59.7% of the total. In terms of personnel exchanges, there were about 9600 professionals in fields like judicial, medical treatment, accounting, construction and insurance, from Hong Kong and the mainland took examinations or professional qualification mutual recognition, and more than 5700 obtained professional qualifications.

Ladies and gentlemen,
Premium Li Keqiang announced when attending the Twelfth Five-year Plan and Mainland-Hong Kong Economic, Trade and Financial Cooperation Development Forum, that the mainland will basically realize the liberalization of trade in services to Hong Kong through CEPA towards the end of the twelfth five-year period. It is a measure to deepen Mainland-Hong Kong cooperation and promote common development. It is of great significance for the long-term prosperity and stability of Hong Kong’s economy and society, and for the mainland’s furthering its opening-up drive. Through ten years of opening up, Hong Kong has become a region, to which the mainland is most open. This has laid a solid foundation for the full liberalization for trade in services. We are confident of it.

The central government will continue with the national policy of reform and opening up, raise the degree of openness and improve the opening up pattern. There is still great room and potential for the further opening up going forward. Trade in services will be the next key area of opening up. I believe that the mainland’s opening up will surely bring new opportunities for CEPA. Let’s join hands, deepen cooperation, and make new contributions to the economic and trade exchanges between Hong Kong and the mainland.

Thank you!

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