HONG KONG — The Second Agreement Concerning Amendment to the Mainland and Hong Kong Closer Economic Partnership Arrangement Agreement on Trade in Services (agreement II) was implemented on Saturday, allowing Hong Kong to accelerate its integration into the overall national development.

The agreement II further opens up the services market of the Chinese mainland to Hong Kong, enabling Hong Kong businesses and professionals to enter the mainland market with more preferential treatment.

This move was welcomed by various sectors in Hong Kong, and the industry is looking forward to making good use of the central government's policies to support Hong Kong and promote high-quality economic development, further integrating into the national development.

The agreement II introduces new liberalization measures across a number of 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 liberalization 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 services exports to the mainland market.

Most of the liberalization 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.

Paul Chan, financial secretary of the Hong Kong Special Administrative Region government, said earlier that according to the agreement II, the restriction for the mainland branches of Hong Kong banks to conduct bank card business will be lifted starting from March, which will facilitate them in expanding their businesses in the mainland.

By the end of last year, the cumulative Customs duty concessions under CEPA had exceeded 10.2 billion yuan ($1.39 billion). Last year, the total trade in goods between the mainland and Hong Kong exceeded HK$4.8 trillion ($617.19 billion), more than three times the amount before the implementation of CEPA, with an average annual growth rate of 5.6 percent.

The number of sectors in which the mainland has fully or partially opened up to Hong Kong's services sector has increased to 153, accounting for 96 percent of all 160 service trade sectors.

The agreement II also brings along institutional innovation and collaboration enhancements. It includes 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" as facilitation measures for Hong Kong investors; and removal of the period requirement on Hong Kong service suppliers to engage in substantive business operations in Hong Kong for three years in most service sectors.

Jonathan Choi, a member of the National Committee of the Chinese People's Political Consultative Conference and chairman of the Chinese General Chamber of Commerce of Hong Kong, recently pointed out that the agreement II covers multiple important system innovations, not only providing convenience for Hong Kong businesses entering the mainland market, but also offering broader legal service options for investors in the Guangdong-Hong Kong-Macao Greater Bay Area.

It encourages more foreign investors to use Hong Kong as a springboard to invest in the Greater Bay Area, further consolidating Hong Kong's role as a "super-connector" and "super value-adder", Choi said.

The mainland and Hong Kong signed the CEPA in 2003. CEPA has now been upgraded to a comprehensive and modern free trade agreement and has brought significant economic benefits to Hong Kong.

Xinhua - China Daily