A view of Hong Kong File Photo: VCG

The Closer Economic Partnership Arrangement (CEPA) signed between the Chinese mainland and Hong Kong is delivering remarkable economic benefits to Hong Kong, as shown by the fact that as of the end of 2024, the cumulative tariff concessions between Hong Kong and the Chinese mainland may have exceeded 10.2 billion yuan ($1.4 billion).

This uplifting figure comes from Chief Executive of the Hong Kong Special Administrative Region (HKSAR) John Lee Ka-chiu, who made this remark ahead of a meeting of the executive council on Tuesday, affirming China's central government's support for Hong Kong.

Under CEPA, all goods produced in Hong Kong that meet the rules of origin are eligible for zero-tariff benefits when entering the mainland. The arrangement was implemented in 2003.

Lee spoke highly of the progress in services trade, noting that the Chinese mainland and Hong Kong have effectively achieved full liberalization of services trade. He emphasized that many sectors in Hong Kong have benefited from CEPA, successfully expanding their business into the Chinese mainland.

In 2024, total goods trade between the Chinese mainland and Hong Kong surpassed HK$4.8 trillion, more than three times the value before CEPA was implemented, with an average annual growth rate of 5.6 percent, according to Lee.

Meanwhile, the number of sectors in which the Chinese mainland has fully or partially opened to Hong Kong's services industry has risen to 153, representing 96 percent of the total 160 services trade sectors.

Relevant sectors include wholly owned hospitals and clinics, architectural design firms, insurance companies and insurance agencies.

In October 2024, Li Yongsha, an official of China's Ministry of Commerce, and Paul Chan, financial secretary of the HKSAR government, signed a document amending the services trade agreement under CEPA in Hong Kong. The agreement is set to take effect on March 1 this year.

The amended agreement introduces further liberalization measures across several services sectors where Hong Kong holds a competitive advantage, including finance, construction and related engineering, testing and certification, telecommunications, film and television, and tourism, said Lee. It will also further reduce the barriers for Hong Kong businesses and professionals seeking to enter the Chinese mainland's services market, he said.

On Wednesday, the MOFCOM and the HKSAR government will co-host a briefing on the amended CEPA agreement. Representatives from more than 10 central ministries and agencies, together with HKSAR government officials, will offer detailed explanations of the liberalization measures and implementation arrangements for various services sectors, according to Lee.

The CEPA amendments highlighted by Lee will bolster Hong Kong's services-sector competitiveness. While its financial sector is already highly open, further liberalization in other sectors will enhance both quality and scale, leveraging the support of the Chinese mainland, Li Yong, a senior research fellow at the China Association of International Trade, told the Global Times on Tuesday.

Li mentioned that Hong Kong's future plans and China's expectations for the HKSAR center on developing its key industries. 

"As the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) progresses, economic and trade ties between Hong Kong and the Chinese mainland have deepened, and relevant support has allowed Hong Kong to expand its competitive industries on a larger scale," Li added.

Li emphasized that for the Chinese mainland, particularly within the framework of the GBA's division of labor, Hong Kong's pivotal roles as an international financial, shipping, and trade hub remain essential. Given the current landscape, the mainland is committed to continuing its support for Hong Kong in reinforcing these advantages, he said. 

In 2024, bilateral trade between the Chinese mainland and Hong Kong reached $309.7 billion, accounting for 5.0 percent of the mainland's total external trade, according to the report. Of the total, the mainland's exports to Hong Kong stood at $291.14 billion, making Hong Kong its second-largest export market after the US, according to a report published by the Hong Kong Trade Development Council.