CHINA WATCH: Hong Kong, China Flesh Out CEPA Trade Deal
- Hong Kong and Chinese officials fleshed out their Closer Economic Partnership Arrangement Monday, which should offer savings of at least HK$750 million a year to Hong Kong exporters and give its service companies a headstart in the China market ahead of their foreign competitors.
Hong Kong Financial Secretary Henry Tang and Chinese Vice Minister of Commerce An Min Monday signed six annexes to the CEPA agreement that offer clear guidelines on how Hong Kong companies can benefit from the zero tariffs and greater market access on offer.
The unveiling of CEPA's details also brought unexpected market openings for some telecommunications services and a higher ceiling on investment in Chinese insurance companies. The annexes also contain a higher-than-expected value-added requirement on some goods, making it more difficult for some Hong Kong manufacturers to meet the criteria for winning zero-tariff status for their products.
"The (closer economic partnership) arrangement will provide a new launch pad strengthening economic ties between China and Hong Kong, bringing new momentum and opportunities for Hong Kong's economy," said An following the signing ceremony.
"The next step is to discuss further liberalization. It will start very soon," said Secretary for Commerce, Industry and Technology John Tsang. "We will continue to fight for further liberalization."
The trade and investment accord is seen by economists and political analysts as a low-cost effort by China to help shore up a Hong Kong economy sagging under the weight of near-record unemployment, uncompetitive manufacturing and years of falling consumer and property prices.
"No other countries get the preferential trade treatment to this extent from China," said National Australia Bank Economist Kevin Lai. "Obviously it's a special gift from China to Hong Kong."
New Concessions in Insurance, Telecommunications
CEPA will take effect on Jan. 1, 2004, and give Hong Kong companies greater access to China's markets at lower tariffs than those from other countries.
Under CEPA, a total of 273 different goods amounting to 90% of Hong Kong's exports to China by value will enter the mainland without facing any import tariffs. The CEPA accord will also give Hong Kong companies a head-start over foreign rivals in entering the Chinese market.
The new annexes cover arrangements on zero tariffs, details of rules of origin for trade in goods, as well as procedures for issuing and verifying certificates of origin. They also detail the 18 service sectors to be opened to Hong Kong companies, define service suppliers and related requirements, and explain the facilitation of trade and investment.
Under the CEPA accord signed on June 29, the ownership ceiling for Hong Kong companies investing in China's insurance sector was set at 15%, lifted from 10%. That cap has been raised further to 24.9%, said acting Permanent Secretary for Commerce, Industry & Technology Raymond Young.
When CEPA was signed, it covered just 17 service sectors. However, an 18th, telecommunications, was added at the behest of Hong Kong negotiators.
In all, Hong Kong companies will be given access to five telecommunications businesses from Oct. 1, 2003, giving them a three-month head-start in telecommunications over other services, which will see the Chinese market open only from Jan. 1, 2004.
The five telecommunications businesses are: Internet data services; call centers; Internet access centers; content services; and storage and forwarding services. Hong Kong telecommunications companies will be permitted to enter these businesses by forming joint ventures, holding a maximum of 50% of any jointly-owned company.
Higher-Than-Expected Value-Added Requirement
A 30% value-added requirement, instead of the 25% originally expected, will apply to 40 of the 273 products enjoying zero-tariff status. However, in a concession to Hong Kong negotiators, product development costs incurred in Hong Kong will be taken into account when totting up local value added.
Hong Kong products outside of the 273 goods will be granted the same tariff-free status by Jan. 1, 2006 at the latest.
A foreign company buying more than 50% interest in a Hong Kong service provider will be able to enjoy CEPA benefits one year after the acquisition. A Hong Kong company that finds a foreign investor buying less than 50% will continue to enjoy the CEPA privileges it had previously.
The arrangement's definitions of what constitutes a Hong Kong company are in any case broad enough to include many multinational corporations with operations in the territory - giving foreign companies in sectors like banking, insurance and logistics greater access to the China market, said a top businessman.
"It's much better than we had anticipated when it was first announced," said Jim Thompson, chairman of the American Chamber of Commerce in Hong Kong.
"The vast majority of our member companies would qualify," he said.
Although having acquired a lot of experience doing business in China, Hong Kong companies would face the challenge of more intense competition from foreign companies with China's entry into the World Trade Organization at the end of 2001.
"Hong Kong companies do have certain first mover advantage. And CEPA is a more generous trade agreement than WTO," said Merrill Lynch Economist Marvin Wong. "So the advantage won't dissipates so quickly, but other people are learning too, competition will definitely become more intense."
香港和大陆充实CEPA内容
香港和中国大陆官员周一对《内地与香港更紧密经贸关系的安排》(Closer Economic Partnership Arrangement)作了补充，这会使香港出口商每年节省至少7.5亿港元，并可使香港的服务企业领先其外国竞争对手一步抢占大陆市场。
香港财政司司长唐英年(Henry Tang)和中国商务部副部长安民周一签署了《内地与香港更紧密经贸关系的安排》的六项附件。这些附件对香港企业如何能够从零关税和《安排》所赋予的更大市场机遇中受益提供了明确的指导。
所披露的《安排》细节还出人意料地提出向某些电信服务开放市场，以及提高香港企业对中国保险公司的投资上限。附件还包含针对某些货物的高于预期的附加值要求，这使得某些香港企业的产品达到享受零关税的标准更加困难。
安民在签字仪式后称，《安排》将给内地与香港经济关系的巩固提供一个新的起飞平台，从而给香港经济带来新的动力和机遇。
工商及科技局局长曾俊华(John Tsang)称，下一步是讨论进一步的自由化问题。讨论将很快开始。香港将继续为进一步的自由化而努力。
该贸易与投资协定被经济学家和政治分析家视为中国为提振香港经济而采取的一项低成本措施。香港经济在接近历史高点的失业率、无竞争力的制造业和多年来一直下滑的消费和地产价格的压力下日趋低迷。
澳洲银行(National Australia Bank)经济学家Kevin Lai说，没有其他国家像这般程度地从中国获得特惠贸易待遇。显然，这是中国大陆赠与香港的一个特别礼物。
《安排》将自2004年1月起生效，其将使香港企业能以较其他国家企业所享受的更低的关税更加便捷地进入内地市场。
根据《安排》，总计有273种货物将进入内地市场，这些货物的价值占香港对内地出口额的90%。《安排》还将使香港企业领先于外国的竞争对手进入内地市场。
新的附件涵盖了有关零关税的安排，贸易货物原产地的规定细节以及原产地证书的签发和核实程序。附件还详细列举了将向香港企业开放的18个服务行业，对服务提供商和有关要求作出明确规定，并对贸易与投资的简化作出解释。
根据6月29日签署的《安排》，对香港企业在大陆保险行业投资上限从为10%提高至15%。工商及科技局副秘书长杨立门(Raymond Young)称，该上限已进一步上调至24.9%。
《安排》在刚签署时仅覆盖了17个服务行业。然而，应香港谈判方的要求，电信业作为第18个行业被加入了《安排》中。
自2003年10月1日起，香港企业总计将可在内地从事5种电信业务，从而使电信业先于其他行业3个月开放。其他行业要到2004年1月1日起才开放。
这5种电信业务是：互联网数据服务、呼叫中心、互联网接入中心、内容服务以及存储和转发服务。通过成立最高持股比例为50%的合资企业，香港电信公司将获准从事这些业务。
30%附加值的要求（最初预期对附加值的要求为25%）将适用于273种享受零关税的产品中的40种。然而，作为对香港谈判方的让步，在香港产生的产品开发成本在合计本地附加值时将考虑进去。
在这273种货物之外的香港产品最迟到2006年1月1日也将享受同样的零关税待遇。
在某香港服务提供商持有50%以上权益的外国企业在收购1年之后可享受《安排》赋予的优惠。外国投资者所持权益不足50%的香港企业将继续享受原先享有的《安排》优惠。
一商界人士指出，《安排》对香港企业构成所作的定义在任何情况下都足以包括众多在该地区有业务的跨国企业，这给像银行、保险和物流业等行业的外资企业进入内地市场带来的更大的便利。
美国商会驻香港地区主席Jim Thompson称，在《安排》首次公布时，其内容比当初的预期要好得多。
他说，商会的绝大多数会员企业将有此资格。
香港企业虽然获得了在内地经商的许多经验，但随著中国于2001年底加入世界贸易组织(World Trade Organization)，它们将面临来自外资企业的更加激烈竞争的挑战。
美林(Merrill Lynch)的经济学家Marvin Wong称，香港企业确实有某种作为先行者的优势。《安排》是一个较世界贸易组织更慷慨的贸易协议。因此，该优势不会那么快就烟消云散。但其他人也在领悟到，竞争必将变得更加激烈。
