Identify Major Features of the Latest Two Cepas and Comment on Their Possible Impacts

Assignment7 Identify major features of the latest two CEPAs and comment on their assertable pretends. The Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) is the first shift heap agreement ever paused by the Mainland of mainland China and Hong Kong since 2003. CEPA opens up huge grocery store sticks for Hong Kong goods and assists, greatly enhancing the already close economic cooperation and integration betwixt the Mainland and Hong Kong. It is to a fault a win-win agreement, bringing new business enterprise opportunities to the Mainland and Hong Kong.For Hong Kong, It provides a window of opportunity for Hong Kong businesses to gain greater vex to the Mainland market. It also benefits the Mainland as Hong Kong serves as a perfect springboard for Mainland enterprises to reach let out to the global market and accelerating the Mainlands full integration with the world economy. As the tag ons titles imply, we clear generally conclude that the major features of 11s and 12s will be deepening the rest of trade in run and boosting access to Mainland market for Hong Kong go industries respectively. tack on cardinal to CEPA (deepens liberalization of trade in run) addendum VIII to CEPA provides for a fundamental of 32 run liberalization and trade and enthronization facilitation measures, including 23 liberalization measures in 16 service orbits, and strengthens co-operation in force fields much(prenominal) as finance, tourism, innovation and technology. Both sides also agreed to enhance p benthood criteria infra trade in goods, and let loose the definition and related requirements of Hong Kong service suppliers. Of interest to none is that a lot of liberalizations incorporated within Supplement VIII to CEPA were actually touched upon by Vice Premier Li Keqiang.Aside from unfolding a package of 36 measures, the vice premier indicated that the trade in function mingled with the Chinese mainland and Hong Kong should b e basically p all overty-stricken by the end of the twelfth Five- socio-economic class plan in 2015. This is perhaps single of the clearest indications regarding how soon and how far the mainland market will eventually open up for Hong Kong service suppliers and professionals. To cope with the fallout of the international financial crisis, Hong Kong has advocated since 2009 the development of 6 new industries in which Hong Kong enjoys clear advantages.It is good to know that CEPA, in some(prenominal) Supplements VIII and VII, has incorporated measures geared to assisting Hong Kong service suppliers to gain enhanced access to the mainland market progressively However, the liberalization rate of the Supplement VIII soothe seems to be not enough and thus it is not so possible to achieve Lis indication mentioned above. For example On banking, supplement books any Mainland-incorporated banking institution established by a Hong Kong bank to subscribe in the sale and distribution of common funds.Yet, it is only for the Mainland-Hong Kong-incorporated banks and they are allowed to deceive and distribute the mutual funds only On individualisticly possess stores, the calculate of persons engaged in the operation is only relaxed from no to a greater extent than eight persons to 10 persons and the business area is only relaxed from not exceeding 300 square meters to 500 square meters On amends policy, the Supplement allows Hong Kong insurance brokerage firm companies to set up wholly-owned insurance representation companies in Guangdong obligation on a pilot stern, however, the appli canfult must fulfill 4 criteria, such asthe applicant should have been operating insurance brokerage businesses in Hong Kong for over 10 years.As the over-all liberalization is relatively limited, so the impact of the Supplement VIII will be small to Hong Kong. Supplement IX to CEPA (boosts access to Mainland market for Hong Kong service industries) Supplement IX to CEPA provides for a total of 43 function liberalization and trade and investment facilitation measures, including 37 liberalization measures in 22 service sectors, strengthens co-operation in areas of finance, trade and investment facilitation, and hike promotes the mutual recognition of professional qualifications in the two models. Compared with the previous 8 arrangements, the major features and differences of Supplement IX are opener and wider in the antithetical aspects of cooperation, especially in service sector.Not only having a more intense collaboration in some aspects like business function, financial service and tourism services that are mentioned in those previous arrangements, but also getting a green light for HKSAR to operate benefit-driving social services like residential care services for the elderly and disables. Without doubt, Supplement IX contributes benefits to both China and HKSAR economies. To comment on its impact comprehensively, we will chiefly focus o n the policies in the services sector. To begin with, CEPA Supplement IX gives benefits to HKSAR, such as helping HKSAR to develop advantages of its services sector sooner expanding its services sector to other proveniences.According to the arrangement, it states that central government would like to instigate all the barriers, such as the limitation of professionals number, identitys cheque as well as the area to run the services for the individual works unit from Hong Kong. Therefore it can give chance to HKSAR to amend its service qualities by enlarging the size of its human capital and operation whatsoever they want to build up HKSAR brand name via the platform of Guangdong towards the solid mainland market. On the other hand, Guangdong can also absorb the experience such as the division of labor and human capital management of down the stairsdeveloped services sector with reference to HKSARs model taking place there with a larger developing scale so as to improve the in dustry structure (tertiary industry) and the level of services in Guangdong.Besides, CEPA Supplement IX further liberalized 22 service sectors, including 1 new sector education services, ranging from professional services to social services. Reducing barriers for the entries to the mainlands market, it can help HKSAR to develop and promote with more opportunities and also enhance the rally of idea in mingled with HKSAR and China. Taking an example regarding the education services, China permits HKSAR to operate professional training institutions with a choice in between a single proprietorship, roast venture or cooperation with China. This loosen restrictions can lead to both win-win situation of them as it can help the assemblage of local professionals in mainland and narrowed the differences of professionals certification in between two regions.All in all, we can see that CEPA does help to honor the cooperation between Hong Kong and Mainland China with the progressively loos ing policies. And therefore, the impact of CEPA will be card shark and sharper in the future. Yet, in the current stage, there are lighten many limitations and barriers and thus we deem that the process goes a bit as well as slow regarding the wish of Li Keqiang that the trade in services between the Chinese mainland and Hong Kong should be basically free by the end of the 12th Five-year plan in 2015. Appendix1 CEPA Supplement VIII (cited) Sectors or sub-sectors 7. fiscal services B. Banking and other financial services (excluding insurance and securities) a. Acceptance of deposits and other due funds from the publicb.Lending of all types, including consumer credit, mortgage credit, factoring and financing of commercial transactionsc. pecuniary leasingd. All payment and money transmission services, including credit, charge and debit cards, travellers cheques and bankers drafts (including write and export settlement)e. Guarantees and commitmentsf. Trading for own account or f or account of customers immaterial exchange Specific commitments To allow any Mainland-incorporated banking institution established by a Hong Kong bank to engage in the sale and distribution of mutual funds. Appendix2 CEPA Supplement VIII (cited) Sectors or sub-sectors Service sectors (sectors not set out in GNS/W/120) Individually owned stores Specific commitments 1.To allow Hong Kong long-lasting residents with Chinese citizenship to set up, in accordance with the relevant Mainland laws, regulations and administrative regulations, by the piece owned stores in all provinces, autonomous regions and municipalities directly under the cardinal giving medication in the Mainland without being subject to the approval procedures applicable to distant investments, to provide the interest services (excluding franchising operation)(1) The following items of Packaging Services under the Leasing and Commercial Service Industry the provision of services of commodities classification, su b-packing and box, freshness preservation, labelling, mark-stamping and so on for shopping malls, supermarkets or other customers the provision of goods assorting, sub-packing and packaging services specifically for chain stores or supermarkets the services of delivery companies (centres) which provide mainly goods assorting, sub-packing and packaging services the provision of sub-packing and packaging as well as re-packaging services for general products gift wrapping services. 2) The following items of Office Services under the Leasing and Commercial Service Industry the design and production services of signs and dye plaques the design and production services of trophies, plaques, medals and silk banners. (3) Craft activities which are mainly for the use of goods and services of leisure and entertainment (pottery, sewing, painting etc. ) under Indoor Entertainments. 2. To relax the restrictions on the number of persons engaged in the operation and the business area of individ ually owned stores set up by Hong Kong changeless residents with Chinese citizenship in all provinces, autonomous regions and municipalities directly under the Central Government in the Mainland(1) No more than 10 persons should be engaged in the operation of the individually owned stores. 2) The business area for retailing services food and beverage services hair dressing, beauty treatment and health care services, bathing services and repair services of home galvanising appliances and other goods for daily uses under residents services and other services outcome and export of goods and technologies photography and photographic processing services washing, cleaning and color services repair and maintenance of motor vehicles and motorcycles and storage and warehousing should not exceed 500 square metres. Appendix3 CEPA Supplement VIII (cited) Sectors or sub-sectors 7. Financial services A. All insurance and insurance-related services a. Life, accident and health insurance se rvices (CPC8121)b. Non-life insurance services (CPC8129)c. Reinsurance and retrocession (CPC81299)d. Services auxiliary to insurance (including broking and agency services) (CPC8140) Specific commitments To allow Hong Kong insurance brokerage companies to set up wholly-owned insurance agency companies in Guangdong Province (including Shenzhen) on a pilot basis. The place of operation should be in Guangdong Province (including Shenzhen), and the pplicant must fulfill the following criteria (1) The applicant should have been operating insurance brokerage businesses in Hong Kong for over 10 years (2) The applicants average annual business revenue for the past 3 years before application should not be less than HK$500,000 and the total assets as at the end of the year before application should not be less than HK$500,000 (3) Within 3 years before application, there has been no serious misconduct and show of disciplinary action and (4) The applicant should have set up a representative of fice in the Mainland for over one year. Appendix4 CEPA Supplement IX (cited) Sectors or sub-sectors 8. Health related services and social services C. accessible services Welfare services delivered through residential institutions to old persons and the wound (CPC93311)Day-care services for the handicapped (CPC93321)Welfare services not delivered through residential institutions (CPC93323)Rehabilitation services for handicapped Specific commitments 1. To allow Hong Kong service suppliers to operate elderly service agencies in the form of wholly-owned profit-making enterprises. 2.To allow Hong Kong service suppliers to operate welfare services agencies for persons with disabilities in the form of wholly-owned profit-making enterprises. Appendix6 CEPA Supplement IX (cited) Sectors or sub-sectors 5. Education services A. Primary education services (CPC921)B. Secondary education services (CPC922)D. liberal education services (CPC924)E. Other education services (CPC929) Specific c ommitments 1. To allow Hong Kong service suppliers from Hong Kong to set up international schools on a wholly-owned basis in Qianhai and Hengqin. Their target students may be expanded to cover children of Chinese nationals residing abroad and of returned talents after studying abroad who are working in Qianhai and Hengqin. 2.To allow Hong Kong service suppliers to set up business-based training bodies in the Mainland on a wholly-owned, equity joint venture or contractual joint venture basis. 2 . summons to addendum 1 3 . Refer to appendix 2 4 . Refer to appendix 3 5 . Refer to appendix 4 6 . Compared with the previous arrangements ,including CEPA 8, regarding the treatment to Hong Kong permanent residents have services taking place in Mainland China, there are numerous limitation for their developments scale ranging from limitation of professionals number to the size of their services environment. In CEPA 8, the number upper limitation of professionals and working area are 10 and 50 m3. 7 . Refer to appendix 6