The Chinese capital will send 500 leading government officials and business people to Hong Kong in September to strengthen trade ties between the two, Beijing Municipal Bureau of Commerce Director Li Zhao revealed at the weekend.

Beijing is working hard to strengthen its links with Hong Kong by taking advantage of the Closer Economic Partnership Arrangement (CEPA) between the central government and the special administrative region.

It will also establish more downtown duty-free shops to make overseas visitors' lives easier in the capital city.

Li said that the Beijing delegation, composed of around 500 governmental officials and entrepreneurs, would attend the eighth session of the Beijing-Hong Kong Economic Co-operation Symposium and Trading Fair, expected to be held in Hong Kong in early September.

The bureau has approved 145 Hong Kong-based enterprises in the first five months of this year, involving contractual and actual investment of US$410 million and US$340 million, making the special administrative region the largest overseas investor in Beijing.

"In addition to traditional manufacturing industries, Hong Kong enterprises have a great interest in CEPA-related sectors, such as consulting, housing management and intermediary services, software, community services, culture and entertainment," said Li.

Between January and May, three wholly Hong Kong-funded professional service enterprises and a Hong Kong holding media joint venture, Stella Cinema Development Co Ltd, were set up. This is the first time the municipal government has approved such Hong Kong controlled companies in line with CEPA provisions.

Following the civil servants exchange between Beijing and Hong Kong from the beginning of this year, a professional exchange programme in the legal service, a developed sector in Hong Kong, was launched in April.

"We will develop more such programmes in the future and the exchanges will be focused on the professional service sectors," said Li.

There are only three downtown duty-free stores in Beijing, all considered rather lacklustre by consumers.

The government is encouraging the expansion of duty-free shops in downtown Beijing, where increased variety of goods and a greater floor space are available, compared with the outlets at international airports, open harbours and border ports.

Downtown duty-free stores permit foreigners and Chinese living overseas to buy goods.

Local residents who hold long-term visas for more than a year and show air tickets are also allowed to buy goods there.

Prices there are 10 to 30 per cent lower than in normal stores.

Chen Jian, a researcher at the policy study office of Beijing Municipal Government said that the decision is a part of the government's efforts to improve the city's investment environment.

"Overseas investors may feel more comfortable and find Beijing more convenient if it has more downtown duty-free shops," said Chen.

Meanwhile, the current duty-free shops are upgrading their services and increasing the variety of goods available in a bid to revitalize their business.

(China Daily July 19, 2004)