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HK discussions with Mainland on establishing CEPA underway

The Government is pursuing earnestly discussions with the Central People's Government (CPG) to establish a Mainland/Hong Kong Closer Economic Partnership Arrangement (CEPA) so as to gain wider market access to the Mainland.

The Secretary for Constitutional Affairs, Mr Stephen Lam, said this today (September 7) at a seminar, entitled " Legal Landscape of China after Accession to WTO", organised by the Basic Law Institute.

Mr Lam said that the characteristics and strengths of Hong Kong Special Administrative Region's (HKSAR) systems, including the Basic Law and common law system, provided the best conditions and the comparative advantage to forge a closer economic partnership with the Mainland as the two distinct members of World Trade Organisation (WTO).

He added that the foundation for any agreement would be on the basis that the Mainland and HKSAR were two separate customs territories under the WTO. Therefore, such an economic partnership with the Mainland was fully consistent with the concept of "One Country, Two Systems", and would indeed be complementary.

Mr Lam gave an assurance that any arrangement agreed would be WTO-consistent and WTO-plus.

He said both sides had agreed on the progressive approach of addressing the relatively easier issues first, before tackling the more difficult aspects.

Mr Lam was confident that eventually when CEPA was concluded, it would be welcomed by those doing business in the Mainland and Hong Kong, as they could be assured that investment opportunities would be backed by professional and world-class services.

The arrangements should also benefit the development of the Mainland's legal services, he said.

"Just as Hong Kong's legal profession has benefited over the years from the presence of many expert foreign lawyers, I believe that a closer economic partnership between the Mainland and HKSAR will benefit the development of the legal professionals in both jurisdictions," he said.

With the advent of globalisation and WTO accession by China, Hong Kong people faced both challenges and opportunities.

Mr Lam said, "Financial services, transport and logistics, tourism and professional services are the four key economic drivers in Hong Kong.

"Together these four sectors account for about 50 per cent of our Gross Domestic Product (GDP), while services as a whole account for about 86 per cent. At the moment, only about 35 per cent of China's GDP is attributed to services.

"As the Mainland's economy grows and matures, there will be a large demand for skilled professionals and services staff in China.

"Our hope is that the service industry and professions in Hong Kong, including the legal profession, will be able to gain wider access to the Mainland market. Legal services is one of the many areas that perfectly fit Hong Kong's niche," he said.

The HKSAR Government had every confidence that legal practitioners in Hong Kong were well equipped to meet the challenges and to capitalise on the opportunities arising from China's accession to the WTO, he added.

Mr Lam said that the "One Country, Two Systems" was here to stay. And, the Basic Law and common law system would underpin not just the Hong Kong economy, but also the rights and freedoms which Hong Kong residents enjoyed.

These systems would also protect the foreign investors, academics, professionals and tourists who came to enjoy Hong Kong.

Hong Kong would continue to thrive as Asia's world city under the Basic Law. Its position as the leading financial centre, backed by world-class legal professional services, would continue to grow, Mr Lam said.

End/Saturday, September 7, 2002