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Hong Kong Service Industry to Benefit after China Joins WTO
Experts believe that Hong Kong's relatively advanced but surplus service industry will benefit after China joins the WTO.
When Premier Zhu Rongji visited England last year, he raised the issue of hiring former Hong Kong Securities and Futures Commission chairman Liang Dingbang as a consultant for the China Securities Regulatory Commission twice. This move shows that the top leadership of the central government approves Hong Kong's service industry. At the same time, it is laying the foundation for Hong Kong's service industry to make deeper inroads into the mainland.
The Hong Kong Special Administrative Region and business circles both feel that after China joins the WTO, Hong Kong will continue to play the role of middleman for foreign investments into China. Hong Kong¡¯s service industries such as accounting, insurance, law, tourism, public relations and retail are also industries which lag behind on the mainland. After joining the WTO, these industries will be opened up to greater competition, giving Hong Kong businesses unlimited opportunities.
China¡¯s consumer market can absorb a lot. Its retail sales industry has slowly opened up in the past eight years. As the market opens up even greater and more foreign capital enters, the mainland retail sales industry is predicted to become a lively modern industry. In addition to greater investment opportunities, mature retail systems will help foreign funded factories expand markets in China. As the mainland retail sales industry opens up more, Hong Kong businessmen will have greater opportunities.
China's insurance industry is currently in a development stage. In 1998, the total volume of insurance fees accounted for only 1.5% of China¡¯s GDP. The average amount people spent on insurance was less than 100 yuan. But in the past couple of years, China¡¯s insurance market has grown at an average rate of 40% per year, the fastest in the world. The nationwide reforms in the insurance system will create more space in the market. Although no Hong Kong insurance company has received approval to do business on the mainland yet, Hong Kong's insurance companies will have more opportunities to enter China's market.
The service industry is very important to market globalization. According to statistics, the service industry accounts for more than 85% of Hong Kong's GDP, but only 33% in China. In several of the more economically developed cities on the mainland, the service industry accounts for about 50%.
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