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Response to media enquiries on recommendations on Hong Kong-Taiwan trade relations

     In response to media enquiries about the recommendations put forward by the Bauhinia Foundation Research Centre in its study on the promotion of Hong Kong and Taiwan trade relations under the improved Cross-Strait relationship, a spokesman for the Hong Kong Special Administrative Region (HKSAR) Government today (May 11) said:

     The Government considers that Hong Kong-Taiwan co-operation needs to be taken forward to a tangible and concrete stage. The Hong Kong Trade Development Council has established an office in Taipei. The Hong Kong Tourism Board is also planning to open an office in Taiwan. We will explore and discuss the matter with the Taiwan side. With appropriate conditions and environment, the Government would not rule out the possibility of establishing an official or semi-official office in Taiwan.

     As for exchanges, we expect that Principal Officials of the Government will visit Taiwan at appropriate time. We also hope to discuss with our Taiwan counterparts on subjects of mutual interest and to establish concrete working relationship and co-operation basis. We will identify appropriate opportunities to invite our Taiwan counterparts to visit Hong Kong with a view to jointly taking forward exchanges and co-operation between the two places.

     The Government has long been complementing the development of the policy of the Central Authorities on Taiwan. The Government conducts its relationship with Taiwan in a proactive and practical manner under the framework of "Qian's Seven Principles" and "One China" principle. With the enhancement of Cross-Straits relation, the Government places great effort in promoting and strengthening the links with Taiwan. We have implemented various measures to build stronger ties with Taiwan. More recent measures include:

(1) The Hong Kong Trade Development Council Taipei Office commenced operation in October last year. This further promotes trade co-operation and exchanges between Hong Kong and Taiwan.

(2) To facilitate the flow of people between Hong Kong and Taiwan, we have relaxed the entry arrangements of Taiwan residents visiting Hong Kong, including the lifting of the restriction on the number of applications through iPermit and the extension of the length of stay of permit holders in Hong Kong from 14 days to 30 days.

(3) To enhance the exchanges between Hong Kong and Taiwan cities, we organised a "Hong Kong-Taiwan Inter-City Forum" with the Taichung City on April 15, 2009. At the invitation of the HKSAR Government, Mr Jason Hu, Mayor of Taichung City, led a delegation of some 100 members to attend the Forum. Views were exchanged on trade development and tourism interaction between the two places, thereby enhancing mutual understanding and knowledge.

     Looking to the future, the Government welcomes Cross-Strait discussions on the possibility of an economic co-operation framework agreement and hopes Hong Kong can contribute to the process.

     Hong Kong, being an international financial, trading and shipping centre, possesses many competitive edges, such as strategic geographical location, efficient airport and ports, mature financial and professional services, comprehensive supporting network and well-established legal system. With these strengths, Hong Kong should be able to continue to play an important connecting role between the Mainland and Taiwan as well as other parts of the world, in particular in areas such as financing, entrepot trade, management and other professional services. In response to the further enhancement of Cross-Strait relations, the Government will continue to look into different options for promoting trade co-operation between Hong Kong and Taiwan.

     The Mainland and Hong Kong signed the Closer Economic Partnership Arrangement (CEPA) in June 2003. The two sides just signed the Supplement VI to the CEPA on May 9, 2009. The Taiwan enterprises in Hong Kong can make use of the CEPA and the pilot liberation of professional services in Guangdong to develop new markets in the Mainland, including Guangdong. Taiwan enterprises can also continue to make use of Hong Kong's financial services and modern logistic services to establish business routes linking Guangdong, Hong Kong and Taiwan.

     In addition, Hong Kong also strengthens its position as the region's trading centre and encourages economic co-operation among the three places across the Strait through active participation and promotion of regional co-operation, such as the Pan Pearl River Delta co-operation and Pearl River Delta development. We welcome Taiwan enterprises to play an even greater role in the further development of the Greater Pearl River Delta. We also hope Taiwan enterprises will invest in the Mainland even more extensively and develop normal economic relationship with the Mainland and Hong Kong, so as to create a win-win situation for the economies and trade benefits of the three places across the Strait.

     Over the years, Hong Kong and Taiwan have established close trading ties. A direct communication and exchange platform can help further enhance and broaden the scope for trade co-operation. The Government is therefore actively promoting the establishment of the "Hong Kong/Taiwan Economic Co-operation Committee", a non-government body to be formed by local businessmen and traders. The Government is liaising and following up closely with the Taiwan authority in this regard.

     The Government has been maintaining contact and communication with various sectors of Taiwan. In the past few years, we have received a broad spectrum of visitors from different sectors in Taiwan with different political background. We have briefed them on the latest developments in Hong Kong. To complement positive developments across the Strait, we will continue to proactively develop relationship with different sectors in Taiwan. We will continue to organise forums with other Taiwan counties and cities on areas such as city management, trade, culture and tourism.

     There is heavy visitor traffic between Hong Kong and Taiwan, with an annual average of over two million Taiwan travelers coming to Hong Kong on business or visiting purposes. Last year, there were about 507,000 Hong Kong travelers visiting Taiwan, an increase of 31 per cent as compared to 2007. Further to the two entry facilitation measures for Taiwan travelers coming to Hong Kong, the Government has allowed Taiwan residents holding "Mainland Travel Permit for Taiwan Residents", (commonly know as "Tai Bao Zheng") but without a valid entry/exit endorsement for the Mainland, to visit Hong Kong and stay up to seven days on visitor status starting April 27 this year. We believe the measure will help further promote exchanges and interaction between people from the two places.

     Hong Kong, being an international financial centre, possesses highly efficient financial infrastructure. We started to operate RMB business in 2004. With further development of the Cross-Strait economic ties, the demand for financial services also increases. We believe that Hong Kong can further play up its role as the financial platform and provide diverse financial services. At the same time, taking into account actual development and needs, we will proactively explore ways to enhance co-operation between Hong Kong and Taiwan on financial services and the related financial regulatory arrangements.

     We believe that stable and harmonious Cross-Strait relations will help stimulate economic activities, thereby boosting the overall trade and cargo traffic. We will actively seek liberalisation of air services arrangements, and continue to improve our transport links to the Pearl River Delta region, such as actively pursuing a proposal to establish an airport rail link between Hong Kong and Shenzhen. These will help to create opportunities for airlines to develop Hong Kong's markets with Taiwan and other regions.

     In respect of tourism, Taiwan is the second largest visitor source market for Hong Kong. The Hong Kong Tourism Board will strengthen the promotion of Hong Kong in Taiwan. It will also develop "multi-destination" itineraries involving Guangdong, Hong Kong and Macao as well as open up new source clientele from outside Taipei, with a view to attracting more young, family, and MICE (Meetings, Incentives, Conventions and Exhibitions) visitors from Taiwan.

     We also aim to maximise the opportunities provided by the implementation of Mainland outbound tours to Taiwan by including Hong Kong and Taiwan, the two popular travel destinations for Mainland residents, in the same journey. We welcome the new measure under Supplement VI to the CEPA just announced on May 9, which allows Mainland group tours to Taiwan to enter and stay in Hong Kong during the trip. This measure facilitates the development of Hong Kong-Taiwan "multi-destination" itineraries. It also enriches the travel experience of Mainland visitors and helps attract more visitors to Hong Kong.

     Furthermore, the Mainland earlier announced that Mainland group tours would be allowed to travel to Taiwan from Hong Kong by taking cruise vessels homeporting in Hong Kong. This will attract more cruise operators to develop itineraries with Hong Kong as homeport and enhances Hong Kong’s status as the regional cruise hub. We have already encouraged the travel trade to proactively liaise with their Mainland counterparts, in order to roll out relevant travel products as soon as possible. All these new measures will enable Hong Kong to maximise the opportunities arising from the "Three Direct Links" across the Strait and foster linkages between the Mainland, Hong Kong and Taiwan.

     In order to facilitate the setting up of regional headquarters or offices in Hong Kong by Taiwan investors, InvestHK has engaged an external consultant in Taiwan to identify potential investors from the market and to provide advisory services to them, including promoting the business environment of Hong Kong. InvestHK will continue to strengthen the networking with trade and investment promotion partners and chambers of commerce in Taiwan, and to organise large-scale investment promotion events and seminars so as to update the Taiwan business community on the advantages and the latest development of different industries.

     To conclude, the Government will continue to complement the policy of the Central Authorities on Taiwan and to proactively enhance the link and co-operation with Taiwan. Under such a positive environment, we will seize all available opportunities. While leveraging on our strengths to reinforce Hong Kong’s role as an international financial, trade, shipping centre, we will also explore new niches to sustain the future development of Hong Kong. We would also seek to contribute to the peaceful development across the Strait.

Ends/Monday, May 11, 2009