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September 13, 2021

Cepa Agreement China Hong Kong

Filed under: Uncategorized — Chris Chaten @ 9:30 PM

The Mainland and Hong Kong Closer Economic Partnership Arrangement, abbreviated CEPA, is an economic agreement signed on 29 June 2003 between the Government of the Hong Kong Special Administrative Region and the People`s Central Government of the People`s Republic of China. [1] A similar agreement, known as the Closer Economic Partnership Arrangement of Mainland and Macao, was signed on 18 October 2003 between the Government of the Macao Special Administrative Region and the People`s Central Government. 9 According to the Hong Kong Government, 90% of exports of Hong Kong origin to China will be exempt from customs duties as soon as the agreement enters into force. Hong Kong`s domestic exports to the mainland reached $36.7 billion in 2003 ($4.7 billion); they account for 30% of total Hong Kong exports, but only 2.1% of Hong Kong`s total exports, including Chinese goods transiting through Hong Kong. Electricity has slowed considerably since 1997 due to the near-complete relocation of Hong Kong`s manufacturing industry. 6The definition of “rules of origin” for products is defined in Annex 2. About 67% of the 273 products covered by the agreement (including jewellery, textiles, clothing, cosmetics, paper and plastics) fall under the origin criteria currently in force in Hong Kong, in accordance with Gatt Article VII, which requires “substantial transformation” which is defined on a case-by-case basis. In 17% of the categories, including chemicals and metals as well as certain electronic products, this “substantial transformation” must be significant enough to lead to a change in the tariff heading according to the international four-digit nomenclature. The agreement therefore uses the provision of the modification of the tariff heading, which is quite common on issues relating to the origin of goods. Finally, for the remaining 16% of the categories (including watches and optical components), production or processing costs in Hong Kong (including product development costs) must be at least 30% of the foB (Free On Board) export price. While Hong Kong had to make concessions to the Chinese on this percentage (their goal was to set this percentage at 25%), they nevertheless managed to integrate development costs into the calculation. it must have an essential activity based on an analysis of four different criteria: the nature and extent of the transactions carried out in Hong Kong, the obligation to impose income tax in Hong Kong, at least three years of existence and activity (five years in the construction and engineering sector, without imposing such a condition on real estate agencies), and the presence of fully-owned or bankrupt offices; simple “mailboxes” being excluded from the benefits of the agreement. Under a new trade liberalization agreement, Hong Kong companies now have better access to Guangdong and greater freedom to operate there.

With the exception of certain types of strategic advice, Hong Kong companies have the right to set up 100% businesses in mainland China four years before the WTO calendar. . . .

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