Hong Kong

1
(No Transcript)
2
Hong Kong

• The world's freest economy
• Hub for international business
• Launching pad for china
• A services economy
• World-class infrastructure
• Low, simple, predictable tax regime

3
Hong Kong and China

• Mainland is the largest source of external direct
  investment in Hong Kong.
• Hong Kong is the largest external investor in the
  Mainland of China.
• In 2002, the Mainland was the largest supplier of
  Hong Kong, as well as the largest market for Hong
  Kong's re-exports and the second largest market
  for domestic exports.

4
Closer Economic Partnership Arranagement (CEPA)
5
CEPA - Background
Nov 11, 2001 - China signed WTO Protocol of
Accession at Doha
End Nov 2001 - CE proposed to the Central
Government regarding a RTA between Mainland China
and Hong Kong
Mid Dec 2001 - Central leadership formally agreed
to move forward on a RTA between Mainland China
and Hong Kong
January 25, 2002 - First meeting on RTA between
MOFTEC Vice Minister An Min and HK Financial
Secretary Antony Leung. This RTA to be called
CEPA
June 29, 2003 - CEPA signed
2001
2002
2003
6
CEPA - Principles and Contents

• Principles
• WTO, One-country-two-systems
• Mutual benefit
• Progressive, easy-first
• Wide consultation
• Continuous progress
• Contents
• Trade in Goods
• Trade in Services
• Trade and Investment Facilitation

7
Trade in Goods

• Major benefit Zero tariff
• Zero tariff 2004 273 CEPA zero-tariff products
• Total tariff saving 750 million
• Rules of origin to be agreed before 30 September
• Zero tariff 2006 by application

8
Zero Tariff 2004

• The 273 Mainland product codes include
• Some electrical and electronics products
• Plastic articles
• Paper articles
• Textile and clothing
• Chemical products
• Pharmaceutical products
• Clocks and watches
• Jewelry
• Cosmetics
• Metal products

9
Zero Tariff benefits

• Substantial tariff saving more than 10 million
• High-tariff rate (more than 20)
• HK brand and design

10
Trade in Services

• Liberalization in 17 sectors
• Management Consulting Services
• Convention services
• Advertising services
• Accounting services
• Construction and real estate services
• Medical and dental services
• Distribution services
• Logistics services
• Freight forwarding agency services
• Storage and warehousing services
• Transport services
• Tourism services
• Audiovisual services
• Legal services
• Banking services
• Securities services
• Insurance services

11
Trade in Services

• Early liberalization
• Lowering of threshold
• Mutual recognition and relaxation of regulations
  on HK service suppliers
• Additional liberalization

12
Definition of HK Company

• Principle inclusive, broad, nationality-blind
• Qualifications Sectoral approach
• Criteria
• Incorporated in HKSAR
• Pay profits tax in the HKSAR
• Length of operations (3 years)
• Size and nature of business in HKSAR
• Employment in HKSAR (50)

13
Definition of HK Company

• Implications
• Registered overseas company - not eligible
• Registered HK company eligible even if 100 owned
  by foreigners
• A certification process will be required

14
Trade and investment facilitation

• Trade and investment promotion
• Customs clearance
• Quarantine and inspection of commodities, food
  safety and quality assurance
• Electronic commerce
• Transparency in law and regulations
• Small and medium-sized enterprises
• Chinese medicine and medical products

15
Benefits for China

• Trade and investment benefits
• Capacity-building benefits
• WTO benefits
• Central leadership's motivation

16
Hong Kong General Chamber of Commerce

• Oldest (Since 1861)
• Largest in Hong Kong
• (Approx. 4,000 members)
• International
• Self-funding, nonprofit

17
Mission

• To Promote, represent and safeguard
• the interests of
• the Hong Kong business community

18
(No Transcript)
19
(No Transcript)
20
(No Transcript)
21
Thank You Questions Answers
HKGCC Website CEPA page www.chamber.org.hk/C
EPA Eva Chow Director, International
Business Hong Kong General Chamber of
Commerce Tel [phone] Fax [phone]
9843 Email evachow_at_chamber.org.hk