HONG KONG: A newly released study says the central government's stimulus plan raises a wealth of opportunities for Hong Kong enterprises to capitalize on their expertise, under terms of the Closer Economic Partnership Arrangement (CEPA).

The central government announced the 4-trillion-yuan financial stimulus package in November. The plan aimed to boost domestic demand by focusing on the creation of infrastructure projects and environment-related investments.

The Hong Kong Trade Development Council (HKTDC) has found that the plan should prove highly lucrative for local construction and environmental protection services, companies engaged in logistics and public exhibitions.

The study found that companies engaged in projects involving foreign participation would receive particular benefits.

"Hong Kong should take advantage of the privilege offered by the CEPA," said Dickson Ho, HKTDC's assistant chief economist.

Under the CEPA, Hong Kong services sectors are allowed to establish wholly owned enterprises on the mainland in keeping with their established corporate services. The agreement also gives flexibility, including relaxed capital constraints and a streamlined process, for setting up new endeavors on the mainland.

Ho added that the city possesses expertise and experience surpassing the abilities of mainland counterparts. That, he noted, creates business opportunities for Hong Kong based enterprises.

As one example, Hong Kong companies can provide technical skills and project management for infrastructure projects such as highway construction.

In the field of environmental protection, including pollution abatement, the city can offer its experience with advanced technologies for customized applications.

The HKTDC also suggested that Hong Kong make use of its respected international standing as an effective platform for mainland enterprises to promote their products and brands.

"Brand promotion is essential to encourage domestic consumption," Ho said, adding that demand for promotion will be higher in provinces such as Guangdong, Jiangsu and Zhejiang, which are production bases for light consumer goods.

As the mainland domestic market has enormous potential, Ho foresaw rapid development in local logistics while Hong Kong may explore ways to show its skills in specialized fields such as supply-chain management.

Mo Pak-hung, economics associate professor at Hong Kong Baptist University, agreed that mutual benefit is the general trend in the closer economic relationship between the mainland and Hong Kong.

"While the country offers business opportunities to our industries, we provide expertise to help the mainland's development," he said.

Ng Cho-nam, associate professor of geography at the University of Hong Kong, found that environment-related investment, especially impact assessments, on the mainland are in high demand for the kind of expertise Hong Kong can supply.

"A huge number of major projects in the country lack professional consultants to conduct assessments and this provides much space for Hong Kong companies to develop," he said.

(HK Edition 02/24/2009 page16)