Page 462 - 2018 White Paper on the Business Environment in China

8 White Paper on the Business Environment in China
3.6 Hong Kong Special Administrative Region
East Asia’s Logistics and Financial Hub
Situated at the southeastern tip
of China, Hong Kong is at
the center of East Asia. Since its return to the Chinese
Mainland in 1997, the special administrative region has
been a model for the success of the “One Country, Two
Systems” policy. Hong Kong is the world’s 6th largest
exporter of merchandise trade, 4th biggest foreign
exchange market and, with its service sector accounting
for more than 90 percent of GDP, the world’s most
service-oriented economy, according to the Hong Kong
Development and Trade Council.
Hong Kong encompasses Hong Kong Island, the
Kowloon Peninsula and the New Territories. Parts of the
region consist of the most densely populated places in
the world, while others are quite rural. Approximately 88
percent of the population speaks Cantonese as their first
language, rather than the mainland’s official language of
Mandarin Chinese.
Economy
Major economic sectors of Hong Kong include: trade
and logistics, tourism, financial services, professional
services and other producer services. Mainland China
is Hong Kong’s largest trading partner and the largest
source of external direct investment into Hong Kong.
Its relationship covers a wide range of activities ranging
from traditional areas such as imports/exports, wholesale
and retail, banking and transport and warehousing, to
newer areas such as real estate, hotels, financial services,
manufacturing and infrastructure development.
Spotlight on CEPA’s Tenth Supplement
In December 2001, after China’s accession to the WTO,
Hong Kong proposed an arrangement with mainland
China similar to a free trade agreement. By 2002, the
official term, Closer Economic Partnership Arrangement
(CEPA), was confirmed. CEPA promotes closer integration
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and development of the PRD through trade in goods
and services, investment facilitation and tourism.
The basic objectives of CEPA are to phase out
tariffs and non-tariff barriers on trade in commodities,
liberalize trade in services and reduce and eliminate all
discriminatory measures to boost trade and investment
in the Greater PRD. For manufacturing industries, CEPA
allows the vast majority of manufactured goods that
meet Hong Kong rule of origin and CEPA specifications
into the Chinese mainland duty-free. In the service
sector, CEPA gives Hong Kong companies in specified
sectors preferential access to markets.
To enhance cooperation between Hong Kong and
Mainland China in the services sector, the Chinese
central government and the government of the Hong
Kong Special Administrative Region signed the “Tenth
Supplement to the Mainland and Hong Kong Closer
Economic Partnership Arrangement” (CEPA) on August
29, 2013, which took effect on January 1, 2014.
The Tenth Supplement further relaxes the market
access conditions in 28 existing sectors, namely:
· Legal
· Construction
· Computer and related services
· Real estate
· Market research
· Technical testing & analysis services
· Placement and supply services of personnel
· Building-cleaning
· Photographic
· Printing
· Convention and exhibition
· Translation and interpretation services
· Telecommunications
· Audiovisual
· Distribution
· Environment
· Banking