China and Hong Kong fleshed out and expanded their free trade pact yesterday, with Beijing adding telecommunications to the deal and raising the stake that Hong Kong companies can take in Chinese insurance providers.
"This not only brings new momentum and opportunity to the development of Hong Kong, this also brings new momentum and opportunity to the development of the mainland," China's vice commerce minister, An Min (
He and Hong Kong Financial Secretary Henry Tang (
Tang suggested that will depend on how well Hong Kong's entrepreneurs take advantage of the deal.
"Now it is up to our private sector to realize the potential benefits," Tang said after the two sides approved additional provisions and details to the free trade pact, known as the Closer Economic Partnership Arrangement, which was signed on June 29.
Although Hong Kong was returned from Britain to China six years ago, they have separate legal and economic systems -- with Hong Kong maintaining its capitalist ways and Western-style civil liberties under an arrangement dubbed "one country, two systems."
China had previously agreed to eliminate tariffs on 273 goods certified as made in Hong Kong as of Jan. 1.
Hong Kong Commerce Secretary John Tsang said that will remove HK$750 million (US$96 million) in tariffs each year.
Goods covered range from clothing to jewelry, cosmetics, chemicals and watches.
Hong Kong companies will also be allowed to get into five types of telecommunications businesses starting tomorrow: Internet data services, call centers, Internet access centers, content services and storage and forwarding services.
The Hong Kong companies will have to team up with Chinese partners but can hold up to 50 percent of those businesses through joint ventures.