New economic agreement between Mainland and HK signed

The Chinese central government and the government of the Hong Kong Special Administrative Region (HKSAR) signed on Friday Supplement IV to the Mainland and Hong Kong Closer Economic Partnership Agreement (CEPA), with the hopes of further opening up the mainland market to Hong Kong.

Henry Tang, secretary of finance of the HKSAR government said that the agreement will provide broader opportunities for Hong Kong business and reinforce Hong Kong's comparative advantage in tapping the potential of the mainland market.

The new agreement will open 11 new areas to Hong Kong, including sports, environment and public utilities. This is in addition to the 27 areas already opened to Hong Kong. The agreement also provides better access to areas such as banking, securities, tourism and insurance.

According to CRI Nordic, the new agreement includes, for example, that the minimum total asset requirement for a Hong Kong bank to acquire a shareholding stake in a mainland bank will be lowered from 10 billion USD (7.4 billion euros) to 6 billion USD (4.46 billion euros).

Hong Kong banks will also be able to set up branches on the mainland much easier and mainland banks will be encouraged to set up subsidiary operations in Hong Kong.

A Hong Kong travel company setting up joint venture and wholly owned enterprises on the mainland will only need to have an annual business turnover of 8 million USD (5.9 million euros) and 15 million USD (11.15 million euros), respectively.

Hong Kong travel agencies in selected provinces will also be allowed to operate group tours to Macao and Hong Kong for permanent residents of these areas.