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5 Special Report on the State of Business in South China
6. Hong Kong Special Administrative Region
East Asia’s Logistics and Financial Hub speci ed sectors preferential access to markets.
To enhance cooperation between Hong Kong and Main-
Situated at the southeastern tip of China, Hong Kong
is at the center of East Asia. Since its return to the Chinese land China in the services sector, the Chinese central gov-
Mainland in 1997, the special administrative region has ernment and the government of the Hong Kong Special
been a model for the success of the “One Country, Two Sys- Administrative Region signed the “Tenth Supplement to the
tems” policy. Hong Kong is the world’s 10th largest trading Mainland and Hong Kong Closer Economic Partnership Ar-
economy, 6th biggest foreign exchange market and, with its rangement” (CEPA) on August 29, 2013, which is scheduled
service sector accounting for more than 90 percent of GDP, to take e ect on January 1, 2014.
the world’s most service-oriented economy, according to the
Hong Kong Development and Trade Council. e Tenth Supplement further relaxes the market access
conditions in 28 existing sectors, namely:
Hong Kong encompasses Hong Kong Island, the Kow-
loon Peninsula and the New Territories. Parts of the region Legal Distribution
consist of the most densely populated places in the world, Construction Environment
while others are quite rural. Approximately 88 percent of the Computer and related services Banking
population speaks Cantonese as their rst language, rather Real estate Securities
than the mainland’s o cial language of Mandarin Chinese. Market research Hospital services
Technical testing & analysis Social services
Economy services Tourism
Placement and supply services Cultural
Major economic sectors of Hong Kong include: trade and of personnel Sporting
logistics, tourism, nancial services, professional services and Building-cleaning Maritime transport
other producer services. Mainland China is Hong Kong’s larg- Photographic Air transport
est trading partner and the largest source of external direct Printing Road transport
investment into Hong Kong. Its relationship covers a wide Convention and exhibition Freight forwarding
range of activities ranging from traditional areas such as im- Translation and interpretation agency
ports/exports, wholesale and retail, banking and transport and services Trademark agency
warehousing, to newer areas such as real estate, hotels, nan- Telecommunications
cial services, manufacturing and infrastructure development. Audiovisual
Spotlight on CEPA’s Tenth Supplement Furthermore, under the Circular, service providers of
In December 2001, after China’s accession to the WTO, Hong Kong and Macao are permitted to establish wholly-
invested entertainment places in the pilot areas of Qianhai,
Hong Kong proposed an arrangement with mainland China Shenzhen and Hengqin, Zhuhai.
similar to a free trade agreement. By 2002, the o cial
term, Closer Economic Partnership Arrangement (CEPA), Hong Kong’s savvy global business environment has paired
was con rmed. CEPA promotes closer integration and well with the PRD’s competitive manufacturing base. Accord-
development of the PRD through trade in goods and services, ing to China Customs’ statistics, Hong Kong is the country’s
investment facilitation and tourism. second largest trading partner after the United States. In 2012,
mainland imports from Hong Kong amounted to US$18 bil-
e basic objectives of CEPA are to phase out tari s and lion, while exports to Hong Kong were US$323.5 billion.
non-tari barriers on trade in commodities, liberalize trade
in services and reduce and eliminate all discriminatory mea- Hong Kong overtook London and New York to claim
sures to boost trade and investment in the Greater PRD.For the top spot in the 2011 World Economic Forum Financial
manufacturing industries, CEPA allows the vast majority of Development Index, marking 2011 as the rst year an Asian
manufactured goods that meet Hong Kongrule of origin and city has topped the rankings. e World Economic Forum is
CEPA speci cations into the Chinese mainland duty-free. based on several nancial indicators, including nancial ac-
In the service sector, CEPA gives Hong Kong companies in cess, business environment, banking and nancial services,
transparency, institutional environment, non-banking nan-
66 cial services and nancial markets. Hong Kong is consecu-
6. Hong Kong Special Administrative Region
East Asia’s Logistics and Financial Hub speci ed sectors preferential access to markets.
To enhance cooperation between Hong Kong and Main-
Situated at the southeastern tip of China, Hong Kong
is at the center of East Asia. Since its return to the Chinese land China in the services sector, the Chinese central gov-
Mainland in 1997, the special administrative region has ernment and the government of the Hong Kong Special
been a model for the success of the “One Country, Two Sys- Administrative Region signed the “Tenth Supplement to the
tems” policy. Hong Kong is the world’s 10th largest trading Mainland and Hong Kong Closer Economic Partnership Ar-
economy, 6th biggest foreign exchange market and, with its rangement” (CEPA) on August 29, 2013, which is scheduled
service sector accounting for more than 90 percent of GDP, to take e ect on January 1, 2014.
the world’s most service-oriented economy, according to the
Hong Kong Development and Trade Council. e Tenth Supplement further relaxes the market access
conditions in 28 existing sectors, namely:
Hong Kong encompasses Hong Kong Island, the Kow-
loon Peninsula and the New Territories. Parts of the region Legal Distribution
consist of the most densely populated places in the world, Construction Environment
while others are quite rural. Approximately 88 percent of the Computer and related services Banking
population speaks Cantonese as their rst language, rather Real estate Securities
than the mainland’s o cial language of Mandarin Chinese. Market research Hospital services
Technical testing & analysis Social services
Economy services Tourism
Placement and supply services Cultural
Major economic sectors of Hong Kong include: trade and of personnel Sporting
logistics, tourism, nancial services, professional services and Building-cleaning Maritime transport
other producer services. Mainland China is Hong Kong’s larg- Photographic Air transport
est trading partner and the largest source of external direct Printing Road transport
investment into Hong Kong. Its relationship covers a wide Convention and exhibition Freight forwarding
range of activities ranging from traditional areas such as im- Translation and interpretation agency
ports/exports, wholesale and retail, banking and transport and services Trademark agency
warehousing, to newer areas such as real estate, hotels, nan- Telecommunications
cial services, manufacturing and infrastructure development. Audiovisual
Spotlight on CEPA’s Tenth Supplement Furthermore, under the Circular, service providers of
In December 2001, after China’s accession to the WTO, Hong Kong and Macao are permitted to establish wholly-
invested entertainment places in the pilot areas of Qianhai,
Hong Kong proposed an arrangement with mainland China Shenzhen and Hengqin, Zhuhai.
similar to a free trade agreement. By 2002, the o cial
term, Closer Economic Partnership Arrangement (CEPA), Hong Kong’s savvy global business environment has paired
was con rmed. CEPA promotes closer integration and well with the PRD’s competitive manufacturing base. Accord-
development of the PRD through trade in goods and services, ing to China Customs’ statistics, Hong Kong is the country’s
investment facilitation and tourism. second largest trading partner after the United States. In 2012,
mainland imports from Hong Kong amounted to US$18 bil-
e basic objectives of CEPA are to phase out tari s and lion, while exports to Hong Kong were US$323.5 billion.
non-tari barriers on trade in commodities, liberalize trade
in services and reduce and eliminate all discriminatory mea- Hong Kong overtook London and New York to claim
sures to boost trade and investment in the Greater PRD.For the top spot in the 2011 World Economic Forum Financial
manufacturing industries, CEPA allows the vast majority of Development Index, marking 2011 as the rst year an Asian
manufactured goods that meet Hong Kongrule of origin and city has topped the rankings. e World Economic Forum is
CEPA speci cations into the Chinese mainland duty-free. based on several nancial indicators, including nancial ac-
In the service sector, CEPA gives Hong Kong companies in cess, business environment, banking and nancial services,
transparency, institutional environment, non-banking nan-
66 cial services and nancial markets. Hong Kong is consecu-
