Last updated at: (Beijing Time) Friday, March 12, 2004

HK-mainland integration measure proposed

Political advisers from Hong Kong and the mainland have suggested that the booming border city of Shenzhen can act as a springboard for further economic co-operation between the two.


Political advisers from Hong Kong and the mainland have suggested that the booming border city of Shenzhen can act as a springboard for further economic co-operation between the two.

The two sides have been taking steps to enhance travel, banking, professional services and tariff co-operation since the signing of the Closer Economic Partnership Arrangement (CEPA) last year between the central government and the Hong Kong Special Administrative Region (HKSAR).

The mainland has gradually been opening up to Hong Kong firms with signing a number of professional recognition agreements, covering sectors such as insurance and real estate.

HKSAR Legislative Councillor Tsang Yok-sing warned that "before the mainland is well prepared, an all-around opening up will bring negative impacts on some of its industries."

Tsang suggested that the mutual recognition of some professionals, such as accountants and lawyers, which are more difficult and controversial, can be piloted in Shenzhen.

"The rapidly developing neighbour city has a stronger capacity to accept Hong Kong's service industries, as it's already engaged in frequent communication with Hong Kong," he said.

Chinese People's Political Consultative Conference member Guo Rongchang, the former chairman of the Guangdong Province CPPCC, has his version of the pilot project.

He said that a piece of land between Shenzhen and Hong Kong could be singled out as a "cross-border industrial zone.".

Taking advantage of the free port of Hong Kong, the zone can introduce textiles, home furnishings and other labour-intensive industries that are prone to foreign countries' anti-dumping tariffs, said Guo.

Export-oriented products coming out of the zone will enjoy the twin benefits of the mainland's lower labour cost and Hong Kong's foreign trade and international marketing expertise, he said.

In terms of the co-operation with other mainland regions, Tsang suggested that Hong Kong should find out the specific aspects in different places in order to obtain the greatest mutual benefit.

For example, Hong Kong is experienced in terms of airports, docks and subway management, which is currently needed by the rising port of Shanghai.

Sichuan Province is rich in Traditional Chinese Medicine resources and research personnel, while Hong Kong has plenty of capital and is familiar with international medicine market rules. So the two can co-operate in this field, Tsang said.

Henry Cheng, managing director of Hong Kong-based New World Development, urged the central government to speed up the partnership arrangements before China completely opens up to all foreign countries in three years under its WTO commitments.

"The governments of Hong Kong and the mainland cities should all establish specific communication channels and set timetables for co-operative projects," said Cheng.

Hong Kong's economy, hit hard by the Asian financial crisis, has been showing signs of recovery since late last year.

HKSAR Chief Executive Tung Chee-hwa said last Saturday the city's economy could grow by 6 per cent this year, citing the CEPA as the chief driver of Hong Kong's recovery.

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