New mainland and HK economic agreement signed

New mainland and HK economic agreement signed

The Chinese central government and the government of the Hong Kong Special Administrative Region (HKSAR) signed in Hong Kong Friday Supplement IV to the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA), aiming to further open the mainland market to Hong Kong.
The agreement was signed by Henry Tang, secretary of Finance of HKSAR government, and Vice Minister of Commerce Liao Xiaoqi, witnessed by HKSAR Chief Executive Donald Tsang and Minister of Commerce Bo Xilai.
Welcoming the agreement, Tang said that it will provide further and broader opportunities for Hong Kong business and reinforce Hong Kong's comparative advantages in better tapping the potential of the mainland market.
Under Supplement IV to the CEPA, the mainland will open 11 new areas to Hong Kong, including sports, environment and public utilities. The mainland has already opened 27 areas to Hong Kong, and the agreement promised further access to these areas such as banking, securities, tourism and insurance.
In banking, the minimum total asset requirement for a Hong Kong bank acquiring a shareholding in a mainland bank will be lowered from US$10 billion to US$6 billion.
Both sides will enhance cooperation in establishing green lanes for Hong Kong banks to set up branches in mainland, and encouraging mainland banks to set up subsidiary operations in Hong Kong.
In tourism, the minimum annual business turnover required of a Hong Kong travel enterprise setting up joint venture and wholly owned enterprises on the mainland will be reduced to US$8 million and US$15 million, respectively.
Hong Kong travel agencies in Hunan, Hainan, Fujian, Jiangxi, Yunnan, Guizhou and Sichuan provinces and Guangxi Zhuang Autonomous Region will be allowed to apply for the operation of group tours to Hong Kong and Macao for the permanent residents in these provinces and autonomous region, an extension of similar arrangement already in place in Guangdong on a pilot basis.
In relation to conventions and exhibitions, Hong Kong services suppliers will be allowed to organize exhibitions in Guangdong and Shanghai through cross-border supply on a pilot basis.
In addition, Hong Kong enterprises established in Guangdong and Shanghai will be allowed to organize overseas exhibitions for mainland enterprises in these areas. The mainland will also support Hong Kong in attracting and organizing large scale international conventions and exhibitions.
The required capital investment required of Hong Kong services suppliers for setting up equity or contractual joint-venture medical institutions on the mainland will be lowered from 20 million yuan (US$2.6 million) to 10 million yuan (US$1.3 million).