The central government gave Hong Kong a big gift just before its sixth anniversary as a special administrative region - a free-trade deal expected to be of major economic significance.

Premier Wen Jiabao delivers a speech after the signing ceremony of the Mainland/Hong Kong Closer Economic Partnership Arrangement (CEPA) Sunday in Hong Kong on June 29, 2003. [newsphoto.com.cn]

Premier Wen Jiabao and Chief Executive Tung Chee-hwa witnessed the historic signing of the landmark Closer Economic Partnership Arrangement (CEPA) Sunday.

Vice-Minister of Commerce An Min and Hong Kong Financial Secretary Antony Leung signed the pact at Government House.

The arrangement is expected to provide myriad opportunities to Hong Kong. The pact covers three areas of trade in goods, trade in services as well as trade and investment facilitation.

The mainland will, from January 1, 2004, eliminate tariffs on 273 types of Hong Kong-made goods, accounting for 67 per cent of its exports to the mainland. This will save HK$750 million a year in reduced tariffs.

The mainland has also agreed to waive tariffs on all other Hong Kong-made goods by January 1, 2006.

The agreement opens up immediately 17 sectors on the mainland, including banking and financial services, giving Hong Kong firms greater access to its rapidly growing market.

The basic objective of CEPA is to phase out tariffs and non-tariff barriers on the three areas in a bid to bring about common development by upgrading the economic partnership between the mainland and Hong Kong.

Hong Kong Chief Executive Tung Chee-hwa (left) welcomes Premier Wen Jiabao upon Wen's arrival at Hong Kong International Airport on June 29, 2003. [newsphoto.com.cn]

"The set policies of the central government towards Hong Kong will not change," said Wen, who arrived in Hong Kong yesterday for the first time since he became premier in March.

"We will unswervingly commit ourselves to the policies of 'One Country, Two Systems', 'Hong Kong people administering Hong Kong', and 'a high degree of autonomy'."

CEPA represented the first major step towards a closer economic partnership between Hong Kong and the mainland, said Wen, addressing 260 guests from the business and academic sectors.

The central government would maintain efforts to promote economic integration between Hong Kong and the Pearl River Delta, the premier said.

Expressing his gratitude to the central government, Chief Executive Tung Chee-hwa said CEPA would not only give Hong Kong new impetus and advantages but would help boost local people's confidence in overcoming difficulties and reaching out for victory.

The premier said he had always followed closely the development of Hong Kong and understood that the main problem of its economy was structural. The problem had reached its present magnitude after long years of accumulation.

"The key to fundamentally solving Hong Kong's economic problems lies in faster development," Wen said.

The premier urged Hong Kong to give fuller play to its unique advantages, readjust structure and optimize industries, particularly the service sector. "I am convinced that nothing can stop Hong Kong from marching towards greater prosperity and progress. Hong Kong, the proud pearl of the motherland, will shine even more brilliantly in the future," he said.

During the speech, Wen gave a brief introduction to the country's economic development. He said the outbreak of SARS had not and would not reverse the general trend of reform, opening up and modernization in China.

Wen said he was confident that China would achieve the 7 per cent economic growth target this year.

The premier went on to say that the central government had launched recovery initiatives in the aftermath of the SARS outbreak aimed at maintaining rapid and sound economic development. The measures include expanding domestic demand and readjusting the economic structure, taking an overall and coordinated approach to balanced development, as well as promoting employment and boosting living standards.

The premier faces a busy itinerary during his three-day visit to Hong Kong. He will deliver a keynote speech to mark the SAR's sixth anniversary tomorrow. He will take time to visit Amoy Gardens, where many residents were infected by SARS, and Prince of Wales Hospital.

He will meet with Hong Kong university students as well as representatives of mainland-funded companies in Hong Kong, and inspect large infrastructure projects like Disneyland.

Close

Today's Top News		Top Business News
+The next great leap after Shenzhou V ( 2003-10-21) +Hu calls for balanced development ( 2003-10-21) +Report: SARS not airborne virus ( 2003-10-21) +Japan urged to resolve weapons issue ( 2003-10-21) +Int'l AIDS group opens Beijing office ( 2003-10-21)		+Home-appliance giants want wheels ( 2003-10-21) +Exchange-rate reform under study ( 2003-10-21) +Health insurance sector called for ( 2003-10-21) +SanDisk teams up to open outlets ( 2003-10-21) +Housing prices start to sag in Shanghai ( 2003-10-21)