Hong Kong��s trade pact with the mainland helped the territory��s exports rebound last year although many companies had yet to take advantage of the agreement, a government report showed.

Domestic exports to the mainland rose 3.1 percent last year to HK$37.9 billion (US$4.9 billion), ending a three-year decline after the Closer Economic Partnership Arrangement (CEPA) eliminated tariffs on exports ranging from textiles to jewelry and chemical products, according to the report.

Shipments to the mainland accounted for 30 percent of the territory��s total domestic exports, which climbed 3.5 percent last year to HK$124.47 billion, reversing a 7 percent decline in 2003.

As Hong Kong��s manufacturing base has shifted to the mainland in recent decades, domestic exports have shrunk to only 6 percent of Hong Kong exports.

The rest are re-exports, mostly to and from the mainland, which have been booming on the back of the mainland��s rapid economic expansion.

A buoyant trade sector and a revival of consumer confidence helped the Hong Kong economy grow by at least 7.5 percent last year, according to a government estimate, and analysts forecast another 4-5 percent expansion this year.

The elimination of trade tariffs on exports to the mainland came into effect Jan. 1, 2004 under CEPA, which also liberalized trade in services between Hong Kong and the mainland and began allowing mainland Chinese to visit the territory without having to join tour groups.

Under the ��individual visit scheme,�� which began in July 2003, mainlanders made 4.26 million trips to Hong Kong in 2004, staying on average for 2.7 nights, according to the report.

They helped push visitor arrivals to Hong Kong to a record 21.8 million last year, boosting local consumer confidence.

Source: Shenzhen Daily-Agencies