Hong Kong Finance Secretary Henry Tang said on Tuesday that facilitated by the Chinese mainland/Hong Kong Closer Economic Partnership Arrangement (CEPA), Hong Kong enterprises have increased their investments in the Chinese mainland and more mainland enterprises have invested in Hong Kong vice versa.

In an exclusive interview with Xinhua just days ahead of the 3rd anniversary of the CEPA signing, Henry Tang said: "CEPA plays an important role in enhancing Hong Kong- Chinese mainland economic integration."

He said the mainland and Hong Kong have been closely linked with each other and the commercial and trade exchanges between the two sides have been promoted since Hong Kong's return to the motherland in 1997.

Tang said CEPA helped accelerate the economic integration between the two sides through zero tariff for trade in goods, special commitments on liberation of trade in services as well as trade and investment facilitation.

Statistics show that by May 31, 2006, Hong Kong has granted 13, 037 applications for certificates of origin and the total value of zero tariff trade in goods reached 4.6 billion Hong Kong dollars ( 590 million U.S. dollars).

A total of 27 service sectors enjoy preferential policies in entering the Chinese mainland market.

Henry Tang said CEPA has also played an effective role in pushing ahead with Hong Kong's economic recovery and restructuring.

He said the Chinese mainland's rapid economic growth has formed a huge production base and a consumer market with great potential while the implementation of CEPA has provided an early opportunity for Hong Kong enterprises to cash in on the mainland market.

The finance secretary believed that the most remarkable achievement of CEPA is to encourage Hong Kong's economic recovery and development.

He said the Ministry of Commerce has simplified procedures for mainland enterprises to apply for investing in Hong Kong in 2004. From Sept. 1, 2004 to the end of the first quarter of 2006, 378 Chinese mainland enterprise were approved to invest in Hong Kong, with a total of 2.23 billion U.S. dollars of investment.

Tang said the Individual Visit Scheme has extended to 44 Chinese mainland cities and 13 million mainland people have visited Hong Kong under the scheme.

On the financial market, since the first mainland company listed in Hong Kong in 1993, a total of 335 mainland enterprises have listed in Hong Kong Exchange and Clearing Limited (HKEx) by the end of 2005, collecting 1,097 billion HK dollars (141 billion U.S. dollars).

He said the number of listed mainland enterprises accounted for over 30 percent of the enterprises listed in Hong Kong by the end of 2005 and the traded volume of the listed Chinese mainland companies accounted for 46 percent of the HKEx's total.

Tang said, in addition, all of the top 10 initial public offering (IPO) ventures in HKEx's history came from the Chinese mainland.

He added that the listing of the Chinese mainland companies in Hong Kong has been helping boost the development of Hong Kong stock market.

Apart from the growth of the stock market both in scale and traded volume, the adding of different kinds of companies as that of energy and heavy industry has made the security market more diversified, he said.

He said related service sectors such as law firms, accountants companies and banks have also benefited from the brisk stock market.

Tang believed that with the steady economic growth, the Chinese mainland requires increased volume of financial service provided by Hong Kong professionals. CEPA also has helped Hong Kong banks to enter the Chinese mainland market, which in turn strengthen Hong Kong's position as an international financial center.

Tang said, on a gradual and orderly manner, the Hong Kong Special Administrative Region (HKSAR) government will consult with the central government on further opening of the Chinese mainland financial market.

He said Hong Kong's service providers have been providing services to customers world-wide which enables them a world vision and they are set to provide quality services to the mainland customers, in an effort to promote the development of the mainland market with a great potential.

The financial chief said with the further integration of Hong Kong and the Chinese mainland, the two sides are set to complement with each other for a win-win development.

Tang said since the implementation of CEPA, the InvestHK has been actively arranging investment promotion fairs in North America, Europe and Asia-Pacific areas, introducing to overseas investors Hong Kong's advantages under the framework of CEPA.

He said the promotion fairs have proved to be quite effective as CEPA adds Hong Kong's charm to overseas investors.

Of 232 investment programs completed with the help of InvestHK in 2005, 63 companies claimed that CEPA has been one of the major considerations for them to decide to invest in Hong Kong. In addition, another 32 companies decided to settle in Hong Kong because of the effect of CEPA, Tang said.

He added that other companies have either speeded up their investment programs, expanded investment volume or added more hands in Hong Kong.

Source: Xinhua