Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA)
Statistics on Application for Certificate of Hong Kong Service Supplier
(as of 30-November-2009)

The Hong Kong Special Administrative Region Government and the Central People's Government (CPG) today (29 July 2008) agreed on further services liberalisation under the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA).

With the approval of the CPG, Hong Kong and Guangdong will also implement a package of liberalisation and facilitation measures on an early and pilot basis to enhance mutual economic and trade co-operation.

The Ministry of Commerce has recently issued the Second Supplementary Regulations to the Measures on the Administration of Foreign-invested Commercial Enterprises, which make further provisions on the scope of investment for Hong Kong and Macau investors. Any single Hong Kong or Macau service provider operating a total of over 30 stores in the Mainland handling such commodities as publications, newspapers, magazines, drugs, pesticides, agricultural films, chemical fertilisers, grain, vegetable oil, sugar and cotton of various brands and supplied by different vendors are allowed to hold majority shares but the equity ratio must not be over 65%. The new regulations came into force on 1 December 2006.

The new supplementary regulations are aimed at encouraging Hong Kong and Macau companies to foster closer ties with and establish commercial enterprises in the Mainland under the provisions under CEPA III.

The new regulations apply only to Hong Kong and Macau service providers who meet the definitions and requirements of "Service Providers" under CEPA for the two SARs. In relation to other aspects of their investment in the mainland, Hong Kong and Macau service providers are still governed by the Measures on the Administration of Foreign-invested Commercial Enterprises.

In addition to three phases of CEPA liberalisation measures implemented since 2004, the Chinese mainland and Hong Kong agreed in late June of 2006 on another package of liberalisation measures under CEPA covering trade in goods and services, as well as trade and investment facilitation.

Regarding trade in goods, the Chinese mainland and Hong Kong have agreed to extend the list of CEPA-origin products by 37 to 1,407. These newly-added products will be eligible for zero tariff from 1 July 2006.

As for trade in services, there will be 15 liberalisation measures spreading across 10 areas, namely legal, construction, information technology, convention and exhibition, audiovisual, distribution, tourism, air transport, road transport, and individually owned stores. Like CEPA III, there is no new service sector open under the latest liberalisation package, after CEPA I and CEPA II have combined to provide enhanced access in 27 sectors for Hong Kong's service suppliers and residents. All the service sector liberalisation measures will take effect from 1 January 2007, and the Chinese mainland will devise and implement the necessary rules and regulations as appropriate.

A new initiative under trade and investment facilitation of the latest CEPA package is to enhance the co-operation and exchanges between the two sides on intellectual property issues. In addition, the Central government is studying the scope for further expansion of Renminbi (RMB) business in Hong Kong, which includes allowing Hong Kong importers to settle direct import trade from the mainland in RMB, and allowing mainland financial institutions to issue RMB financial bonds in Hong Kong on a pilot basis.

"We are particularly proud to have achieved HKSS status because it represents a recognition of our commitment to Hong Kong," said Caben's Italian General Manager Fabrizio Goldoni. "The fact that an Italian company can be officially recognized as a local Hong Kong company does credit to Hong Kong's openness to foreigners who fully integrate into its business community. It also proves that CEPA is accessible to overseas investors."

Caben is the Hong Kong subsidiary of Italian corporation, Artsana S.P.A., the holding company of a multinational group of companies, including the prestigious Prenatal S.P.A. Artsana produces and sells a wide range of products through its subsidiaries established worldwide.

Artsana products include toys, children's and maternity clothing, baby carriages and child care products, such as those sold under the internationally famous CHICCO trademark, as well as healthcare, cosmetics and sanitary items and pharmaceutical equipment.

Mr. Goldoni said Artsana S.P.A. decided to establish a Hong Kong subsidiary over a decade ago, because it had the vision to realize the long-term importance of Hong Kong, even as China began opening up to foreign trade and investment.

"The Chinese mainland is now progressively liberalizing market access post WTO, and we believe that Hong Kong, as part of China, has a fundamental role to play in the developing China of the future.

"This is particularly so for overseas companies, since Hong Kong has all the infrastructure, skilled labour force and services, including sophisticated banking and other financial services, necessary for a foreign company which is committed to long-term operations in the greater China region," said Mr. Goldoni.

Caben already has representative offices in Shenzhen and Shanghai, as well as plans for various forms of direct investment in China, managed from its head office in Hong Kong.