Editor’s note: The opening-up of Guangdong province’s services sector marks another major step forward in strengthening economic links between the mainland and Hong Kong following the signing of the CEPA pact in 2003. While Hong Kong professional talents have been lured by the vast lucrative market across the border, many hurdles have yet to be overcome amid a distinctly different modus operandi as well as legal and procedural setups on both sides.
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A building site at the Qianhaiwan Free Trade Port Area in Shenzhen. The mainland’s economic reforms will create more opportunities for Hong Kong, but the difference in the governance system and business mode of operation on both sides may create obstacles in the development process and needs to be thrashed out. (Photo / Asia news) |
When Lam San-keung started his law business in Shenzhen in March this year, he already had the vast mainland market at his fingertips.
The managing partner of Hong Kong-based Lam, Lee & Lai Solicitors & Notaries has been exploring the mainland’s legal sector for three years and is dedicated to serving it with his profound professional expertise.
“Many mainland enterprises have embarked on mergers and acquisitions overseas and thus need legal services. There’s a huge demand here,” says Lam, who now runs China Commercial Lam Lee Lai — a joint venture between the mainland and Hong Kong — in Shenzhen’s Qianhai special economic zone.
Lam is among a growing number of Hong Kong people who have headed north to work in Guangdong province, lured by its lucrative market and the opening up of the services industry.
Late last year, Guangdong signed an agreement with the SAR to promote the liberalization of trade in services in the province. Under the accord, which took effect from March, 153 services trade sub-sectors are now opened up to Hong Kong, accounting for 95.6 percent of the total number of sub-sectors listed by the World Trade Organization.
The mainland and Hong Kong have been striving to strengthen economic cooperation since 2003 when the two sides signed the Closer Economic Partnership Arrangement (CEPA). Since then, 10 supplementary agreements aimed at boosting and facilitating bilateral cooperation have been signed.
Scholars and researchers, however, say obstacles still remain.
Even after an industry is opened up, Hong Kong professionals still face challenges in providing services across the border due to the distinct different systems in regulations and standards between the two sides.
“Being different from CEPA, the latest agreement firstly adopts the management model of negative list, which grants greater allowance to Hong Kong service suppliers. This is a major breakthrough in both concept and the mode of opening up,” explains Zhang Yuge, director of the Economic and Social Development Research Centre at Shenzhen-based think tank, the China Development Institute.
Mao Yanhua, deputy head of the Free Trade Zone Research Institute at Guangzhou’s Sun Yat-sen University, agrees. “Service suppliers from Hong Kong now no longer need to go through the complicated procedure of examination and approval. This is a big transformation,” he says.
“The agreement basically removes the obstacles for Hong Kong people in doing business in Guangdong province. I believe it will have a positive impact,” Mao adds.
Hong Kong’s value of total exports of services in 2013 stood at $812.3 billion — up 6.3 percent from the previous year — according to the Census and Statistics Department (C&SD).
The value of total imports of services, meanwhile, fell by 1.9 percent year-on-year to $583.2 billion in 2013.
The mainland was the top destination and source for the SAR’s trade in services in 2013, accounting for 40.6 percent in exports and 40.7 percent in imports, respectively, according to the C&SD.
However, Hong Kong’s leading industries, such as finance, insurance and law, were not among the SAR’s most exported services to the mainland. Traditional industries like transport and logistics, instead, dominated the export.
According to the Trade and Industry Department, the Hong Kong government, as of April 30 this year, had issued 2,900 “Hong Kong Service Supplier” certificates, of which transport and logistics services accounted for 1,357, while insurance and insurance-related services took up 16 and legal services 22.
There were a number of entry limitations on industries in which Hong Kong has competitive advantages, as they are relatively sensitive, Mao says. “The threshold for these industries is high,” he told China Daily.
“By comparison, trade in goods between the mainland and Hong Kong is active. This lays a sound foundation for the development of related industries, such as transport and logistics.”
While the liberalization of trade in services, in theory, has been basically realized between Guangdong and Hong Kong, it’s a question whether the agreement, in practice, can be effectively implemented. Experts agree that the newly launched China (Guangdong) Pilot Free Trade Zone (FTZ) is a good platform to practice.
“Guangdong should make an effort to operate its FTZ well by making bold institutional innovations, and turning it into an important lever for economic cooperation and integration between the mainland and Hong Kong, in order to achieve breakthroughs in bilateral collaboration,” Zhang suggests.
Sung Yun-wing, a professor of economics at the Chinese University of Hong Kong, says one of the major aims of launching the FTZ is to allow foreign enterprises greater access to the province. The opening up of reforms in the mainland’s services industry will create more business opportunities for the SAR, he says.
But, the difference in the governance system and mode on both sides needs to be thrashed out, as the mainland and Hong Kong adopt different legal systems and set various standards and procedures for the establishment of enterprises.
Moreover, it takes time to fully achieve the new management mode of negative list and national treatment offered by the agreement, Zhang says. In some areas, even mainland enterprises are not able to enjoy national treatment equally, he points out.
“It will remain a long-term task in deepening reform and handling the relationship between government, society and the market well,” he says.
原文链接：http://www.chinadailyasia.com/hknews/2015-05/20/content_15266938.html