The Closer Economic Partnership Arrangement (CEPA) to be signed
between the Chinese mainland and the
Hong Kong Special
Administrative Region on Sunday will be a "new powerful
booster" for Hong Kong's economic transformation, said HK Chief
Executive Tung Chee Hwa Saturday in an exclusive interview with
Xinhua.
"This is the kind of pact that many countries and regional
economies would dream of," Tung told Xinhua.
He
said he expected CEPA to be a new factor to rejuvenate the Hong
Kong economy by offering business opportunities to Hong Kong's
service and manufacturing industries and serving Hong Kong's
economic transformation.
Under the arrangement, many Hong Kong products will enjoy zero
tariff to enter the mainland market. On trade of services, a number
of sectors including exhibitions and conventions, advertising,
banking, securities and insurance in the mainland will be open to
HK investment earlier than to foreign investment.
"The signing of the pact, from which Hong Kong will benefit a great
deal, can fully reflect the Central Government's support for Hong
Kong," said Tung.
It
is foreseeable that with the country's fast economic growth, the
China market will continue to grow in the following three to five
years. CEPA would surely promote the Hong Kong economy in a big
way, he said.
Speaking on Chinese Premier Wen Jiabao's coming visit to Hong Kong
to attend the CEPA signing ceremony, Tung said this reflects the
Central Government's great concern for the well-being of the Hong
Kong people.
"Such arrangement will make Hong Kong people further realize that
the Central Government's concern and help for Hong Kong is not only
full of ardent spiritual encouragement but also substantial
economic support," Tung said.
Tung, who was an initiator of the CEPA pact, recalled that he put
forward a proposal to the Central Government that Hong Kong should
seize the business opportunities brought by China's entry into the
World Trade Organization to clench the partnership between the
mainland and Hong Kong.
"Both sides have been aware that this would be a win-win
arrangement for mutual economic development," Tung said.
A
close economic and trade relation with the mainland has always been
indispensable to Hong Kong's economic prosperity. The pact will
fulfill the cooperation in full swing, he noted, adding that with a
concerted effort over the past 20 years, the mainland has become
Hong Kong's largest trade partner, and Hong Kong has become the
largest investor in the mainland.
Official statistics show that trade volume between Hong Kong and
the mainland stood at 17 billion HK dollars (about 2.2 billion US
dollars) or 10 percent of HK's trade in 1979, but leapt to 1.3
trillion HK dollars (about 166 billion US dollars) in 2002, or 42
percent of Hong Kong's total trade. By the end of 2002, Hong Kong's
direct investment in the mainland accumulated to 1.6 trillion HK
dollars (about 205 billion US dollars), which went close to half of
the total direct overseas investment in the mainland.
Tung said that preferential policies in CEPA will give HK products
an edge in price competition to help increase their market shares
in the mainland. The prospect can enhance investors' confidence,
increase capital and personnel flows, and facilitate technology and
information exchanges between the two sides.
The service industry in the mainland is still a weak segment in its
overall economic structure, which accounts for only 30 percent of
the Gross Domestic Product (GDP). However, the service industry, an
important part in CEPA, has always been Hong Kong's specialty,
which takes up 86 percent of the region's GDP. CEPA would give Hong
Kong's service industry a broader stage to performance.
"A
closer economic cooperation with the mainland in this sector will
be helpful for Hong Kong to face challenges in economic
restructuring and achieve further economic growth," Tung said.
Hong Kong's economic restructuring has been made necessary by the
Asian financial crisis in 1997, Hong Kong's real estate "bubbles"
and the fast economic development in the mainland.
Tung stated in the government report at the beginning of 2003 that
Hong Kong's economic restructuring must be implemented alongside
with its integration with the economy of the Pearl River Delta of
Guangdong Province.
During the process of this regional economic integration, Hong Kong
will exert its strength in such sectors as finance, logistics
distribution, tourism and the industry and commerce, noted the
report.
This policy has been proved to be in the right direction. Hong Kong
achieved a GDP growth rate of 3.4 percent in the third quarter of
last year, and 5.1 percent in the fourth quarter. The momentum was
not even stopped by the outbreak of SARS
(severe acute respiratory syndrome) in the first quarter this year,
when Hong Kong achieved a 4.5-percent GDP growth.
"Economic growth in three successive quarters has spoken louder
than anything else that the Hong Kong economy has been advancing on
the right track, although a real economic rejuvenation needs time
and the process of the restructuring is painful," said Tung.
The Hong Kong government has given great support to local companies
to reinforce their footholds in the trade and investment market in
the mainland, especially that in the Pearl River Delta. CEPA would
effectively facilitate the effort, and hence contribute to the
restructuring and create new jobs, he emphasized.
"With the signing of CEPA, the pace of Hong Kong's economic
rejuvenation will become faster next year," Tung said.
(Xinhua News Agency June 29, 2003)