The Better Hong Kong Foundation


	Focus on Hong Kong - Introduction The Vitality of Hong Kong People A Sound Administration with High Degree of Autonomy and Freedom The Rule of Law A Prosperous Economy A Gateway to China Global and Regional Centre for Businesses and Finance A City where East Meets West A Gateway to China Hong Kong's special relationship with Mainland China is unique. It has been a principal gateway to and from the Mainland for business and tourism for decades. For many years, Hong Kong has remained the largest external investor on the Mainland, with the cumulative value of its realised direct investment reaching US$260 billion at the end of 2005, 42% of the total inward direct investment there. With the enactment of the Closer Economic Partnership Arrangement (CEPA) on 1st January 2004, local and international companies and individuals based in Hong Kong enjoyed more preferential opportunities of doing business on the Mainland. Under CEPA, 1,407 categories of Hong Kong products have been exempted from tariffs when exported to the Mainland. From 2004 to end 2005, Hong Kong's businesses saved a total of around $240 million in tariffs. CEPA also enables Hong Kong-based service providers to enter the Mainland market. There are 27 service sectors benefiting from CEPA, and more than 910 Hong Kong Service Supplier Certificates were issued by the end of 2005. With continuing reform and further liberalization of its economy, more foreign investment is expected to flow into the Mainland. After its entry into the WTO, the amount of foreign investment was anticipated to substantially increase. Hong Kong will be able to take advantage of its unique role and status to partner with foreign enterprises looking for opportunities in the Mainland market and to provide them with business support services. Additionally, as more Mainland enterprises begin to extend their businesses overseas, Hong Kong can also help them gain access to foreign markets. As a result, there is no doubt that Hong Kong's role as a service hub for the Mainland will continue to strengthen.