'Equal footing' given to HK service firms

A new agreement under the framework of the Mainland and Hong Kong Closer Economic Partnership Arrangement is signed in Hong Kong, Dec 18, 2014. [Photo/Xinhua]

Most Hong Kong service providers can expect to receive the same treatment as companies from the Chinese mainland when they start businesses in Guangdong province, according to a new agreement under the framework of the Mainland and Hong Kong Closer Economic Partnership Arrangement signed on Thursday.

Guangdong, for the first time, will adopt a "negative list" that covers 134 service sub-sectors. It lists 132 measures as exceptions for Hong Kong service providers when it comes to receiving the same treatment as domestic companies.

The mainland has opened up 153 service trade sub-sectors to providers from Hong Kong, accounting for 95.6 percent of all the service trade sub-sectors in Guangdong.

National treatment (the same treatment as if they were mainland companies) will be applied to Hong Kong in 58 sub-sectors.

The agreement is "another milestone" involving the CEPA and a huge step toward the objective of basic liberalization of trade in services between the mainland and Hong Kong by the end of the 12th Five-Year Plan (2011-15), according to Hong Kong Financial Secretary John Tsang Chun-wah, who spoke at the signing ceremony of the agreement on Thursday in Hong Kong.

Tsang said the agreement made breakthroughs in the form and content of the CEPA. "For the first time, Hong Kong service providers can expect to receive national treatment in Guangdong province, with exceptions on the negative list," he said, adding that the Hong Kong Special Administrative Region government is very grateful for the efforts made by the central government.

Vice-Minister of Commerce Gao Yan said at the signing ceremony that according to the agreement, any CEPA-plus preferential treatment offered by the mainland to other countries and regions will be extended to Hong Kong, so as to ensure Hong Kong continues enjoying the most preferential liberalization measures offered by the mainland.

"Guangdong is a pilot zone for the liberalization of trade in services between Hong Kong and the mainland, and hopefully, it will provide some replicable experiences that could be gradually extended to other parts of the mainland," said Gao.

She encouraged the Hong Kong service industry to take advantage of the favorable policies, to seize the opportunity and expand on the mainland.

To achieve basic liberalization of trade in services between the mainland and Hong Kong by the end of 2015, other provinces will also adopt the "negative list" system under the CEPA, a representative of the Ministry of Commerce said.

Zhang Yuge, a director at the China Development Institute, a think tank based in Shenzhen, said that these measures indicate that the mainland is opening up further to Hong Kong, which will create tremendous opportunities and have positive effects on the economic and social development of the two sides.

He also noted that these measures may bring some pressure on companies in Guangdong, but competition could also push the companies to improve their products and services.

The agreement will be implemented on March 1, 2015.