NEW TRADE IN SERVICES PACT SIGNED

The Hong Kong Special Administrative Region Government and the Ministry of Commerce today signed the Second Agreement Concerning Amendment to the Mainland & Hong Kong Closer Economic Partnership Arrangement (CEPA) Agreement on Trade in Services (Amendment Agreement II).

Chief Executive John Lee witnessed the signing of the new agreement by Financial Secretary Paul Chan and Deputy China International Trade Representative of the Ministry of Commerce Li Yongjie this afternoon.

Scheduled to be implemented on March 1, 2025, the Amendment Agreement II introduces new liberalisation measures across several service sectors where Hong Kong enjoys competitive advantages, such as financial services, construction and related engineering services, testing and certification, telecommunications, motion pictures, television and tourism services.

The Trade & Industry Department explained that the liberalisation measures take various forms, including removing or relaxing restrictions on equity shareholding and business scope in the establishment of enterprises, relaxing qualification requirements for Hong Kong professionals providing services, and easing restrictions on Hong Kong's exports of services to the Mainland market.

Most of the measures apply to the whole Mainland, while some of them are designated for pilot implementation in the nine Pearl River Delta municipalities in the Guangdong-Hong Kong-Macao Greater Bay Area, it added.

The Chief Executive thanked the central government for its care and support for the Hong Kong SAR, as well as the Ministry of Commerce and relevant authorities for actively working towards the Hong Kong SAR Government's proposal of further opening up the Mainland market to Hong Kong in trade in services.

“The Amendment Agreement II introduces new liberalisation measures across different service sectors where Hong Kong enjoys competitive advantages, making it easier for Hong Kong service suppliers to establish enterprises and develop business on the Mainland, enabling more Hong Kong professionals to obtain qualifications to practise on the Mainland, allowing more of Hong Kong's quality services to be provided to the Mainland market, and contributing to and serving the country's development,” he said.

“The Hong Kong SAR Government will continue to encourage different sectors of the community to leverage the unique advantages of 'one country, two systems' and join hands with their counterparts on the Mainland to promote the competitiveness of the professional services sector, in order to inject new impetus to economic development and achieve high-quality development.”

Speaking at a media session after the signing ceremony, the Financial Secretary pointed out that the further relaxation under CEPA will enable Hong Kong firms and professional sectors to get into the Mainland market a lot easier.

“Depending on specific sectors, the progress will be different. But I am sure for the professional sectors, people are very keen to expand their foothold into the Mainland by using the Greater Bay Area as the starting point. So this will have a very positive impact on Hong Kong,” Mr Chan said.

An example of the measures regarding construction and related engineering services is that Hong Kong general practice surveying enterprises will be allowed to provide professional services in Guangdong Province through filing of records.

For tourism services, there will be measures to optimise the implementation of the 144-hour visa-exemption policy for foreign group tours entering Guangdong from Hong Kong.

Mr Chan said the Government will be communicating with the different sectors and working with the different stakeholders to move as fast as possible, to materialise the various implementation details, so that the businesses and professionals in Hong Kong would find it useful and easier to expand into the Mainland.

Furthermore, the department noted that the Amendment Agreement II brings institutional innovation and collaboration enhancement, including the addition of allowing Hong Kong-invested enterprises to adopt Hong Kong law and allowing Hong Kong-invested enterprises to choose for arbitration to be seated in Hong Kong.

It also added commitments regarding domestic regulation to ensure the transparency, predictability and efficiency of regulations on trade in services.

In addition, the new agreement removed the period requirement on Hong Kong service suppliers to engage in substantive business operations in Hong Kong for three years in most service sectors.

This will allow Hong Kong startups to enjoy the preferential treatment under CEPA in a shorter time and attract enterprises and talent from around the world to establish a presence in Hong Kong and explore the Mainland market, the department noted.

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