The economic links between the Chinese mainland and Hong Kong will further strengthen with the implementation of second phase of the Mainland/Hong Kong Closer Economic Partnership Arrangement (CEPA) on Jan. 1.

"With CEPA II coming into effect tomorrow, Hong Kong origin products covered in 1,108 mainland 2005 tariff codes (previously 1,087 items according to the 2004 classification) may enter the mainland tariff free. For trade in services, Hong Kong service suppliers will gain preferential access to the mainland market in 26 service areas," a Hong Kong Trade and Industry Department (TID) spokesman said Friday.

Further trade liberalization under CEPA II was agreed on August27, 2004, just over eight months after the full implementation of the first phase of CEPA on Jan. 1 in 2004.

So far, CEPA has been running smoothly. Applications for CEPA Certificates of Origin, or CO (CEPA), and Certificates of Hong Kong Service Supplier (HKSS) are increasing steadily. The TID has also started receiving applications for CO (CEPA) and HKSS under CEPA II.

Of the 712 applications for HKSS received, 663 have been approved while 2,991 certificates out of the 3,199 applications for CO (CEPA) have been issued, involving goods with a total value of about 1,145 million Hong Kong dollars (147 million US dollars), the spokesman said.

A special CEPA website (www.tid.gov.hk/english/cepa/) was launched to disseminate CEPA-related information to help Hong Kong investors understand more about the investment environment and market opportunities in the mainland, and about the application and approval procedures.

CEPA is a continuous arrangement and adopts a building-block approach which provides a mechanism for further liberalization measures. Starting from Jan. 1, the TID will accept applications from local manufacturers wishing to include their goods in the next phase of zero tariffs under CEPA, the spokesman added.

Xinhua News Agency