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Chinese mainland, HK sign new supplement to CEPA

Chinese Vice Minister of Commerce Jiang Yaoping speaks during the signing ceremony of Supplement IX to the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) in Hong Kong, south China, June 29, 2012. (Xinhua/Cheong Kam Ka) 

HONG KONG, June 29 (Xinhua) -- Chinese mainland and Hong Kong on Friday inked a supplementary agreement to their existing economic pact, pledging to further open services sector to each other and consolidate trade and economic ties.

The ninth supplement to the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) provides for a total of 43 measures for services liberalization and trade and investment facilitation, covering 22 service sectors such as education, medical treatment, construction, telecommunication, banking, brokerage, tourism and railway transportation.

The new supplement, taking effect from Jan. 2013, is also aimed at promoting the mutual recognition of professional qualifications in Hong Kong and the mainland, the world's second-largest economy.

CEPA, signed on June 29, 2003, aimed to forge closer ties between Hong Kong and the mainland. The pact covered three broad areas, namely trade in goods, trade in services as well as trade and investment facilitation.

The new agreement, signed by Chinese Vice Minister of Commerce Jiang Yaoping and Hong Kong Financial Secretary John Tsang, will add the number of open-up service sectors to 48, which will give a big boost to Hong Kong's economy as the service sector contributed to more than 90 percent of the city's annual economic output.

Hong Kong's telecommunication operators will be allowed to set up solely-funded or joint venture offshore call centers in Dongguan and Zhuhai cities of neighboring Guangdong province on a pilot scheme, according to the supplement.

There are also arrangements in the supplement to encourage qualified mainland enterprises to go public at Hong Kong bourse while letting Hong Kong financial institutions open joint venture brokerages, fund management companies and futures firms on the mainland.

Jiang said at the signing ceremony that the new supplement meant wider and deeper openness of the mainland's market in the service industry to Hong Kong. In addition, the service liberalization in some sectors has been achieved in advance.

For instance, Hong Kong medical service providers "can almost enjoy national treatment" to establish medical institutions on the mainland by sole investment or with mainland partners, said the vice minister.

Jiang said the new supplement also highlights the broadening of piloting sectors in Guangdong province, including accounting, construction, medical treatment, printing, and banking service.

Donald Tsang said that the new supplement fully reflected the support of the central government to Hong Kong's development, showing the resolution of both sides to promote the service liberalization.

"With unclear global economic prospect, the development of Hong Kong and the mainland will face many challenges. CEPA will continue to play an important role of boosting economy and promoting competitiveness of both sides," said Tsang.

The ninth supplement came before a series of celebrations during the weekend to mark the 15th anniversary of Hong Kong's return to China. President Hu Jintao arrived at noon Friday to attend the celebrations and swearing-in ceremony of the fourth- term government of HKSAR on a three-day visit trip.

Hong Kong's benchmark Hang Seng Index surged 2.19 percent, the biggest daily gain in two weeks, to end at 19,441.46 Friday after the announcement. The mainland key Shanghai index climbed 1.35 percent to 2225.43.

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