A Chinese think tank has urged Beijing to extend a free trade agreement with Hong Kong to include Taiwan and Macau, it was reported in Hong Kong yesterday.
A study compiled by the China National Institute of the WTO said Beijing needed a new strategy to position itself at the center of a regional economy in the face of global competition.
Zhang Hanlin, director at the institute, called for China, Hong Kong, Taiwan and Macau to hold talks to facilitate moves toward the free movement of goods and people adding "the free-trade zone is an inevitable trend," the South China Morning Post reported.
"An extended Closer Economic Partnership Agreement [CEPA] should create prosperity for all the four areas," Zhang said.
Zhang noted that although Hong Kong, Macau and Taiwan were three independent tariff entities, they were also important trade and investment partners.
The Post cited an unidentified source close to the Beijing government as saying that high-level officials realized a free-trade deal could be an effective method of curbing Taiwan's independence movement.
"Previously, the central government thought it was incorrect and inappropriate to have a free-trade pact with Hong Kong or Taiwan because it was supposed to be something between sovereign states," the source told the paper.
"But now they realize that this can be a way to handle cross-strait relations," the source added.
Hong Kong and China signed the CEPA on June 30 and it is scheduled to come into effect on Jan. 1 next year.