LCQ18: Measures to help Hong Kong enterprises to explore business opportunities on the Mainland
Following is a written reply by the Secretary for Commerce and Economic Development, Mr Gregory So, to a question by the Hon Lam Tai-fai in the Legislative Council today (February 29):
A total of eight supplements have been signed since the Mainland and Hong Kong signed the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) in 2003 to gradually implement the market liberalisation measures under CEPA. Yet, quite a number of small and medium-sized enterprises (SMEs) and members of the professional service sector in Hong Kong have reflected to me that the situation of "big doors are open, but small doors are not yet open" in fact still exists in the mainland market, and they face considerable difficulties in exploring business opportunities on the Mainland. In this connection, will the Government inform this Council:
(a) whether it has assessed the actual situation of "big doors are open, but small doors are not yet open" faced by various Hong Kong industries on the Mainland; if it has, of the details; if not, the reasons for that;
(b) given that some SMEs have reflected that the mainland company registration procedures are complicated and time-consuming, whether it knows such procedures and the time generally required for vetting and approval on the Mainland; if it knows, of the details; if not, whether it will seek an in-depth understanding of the matter;
(c) given that some SMEs have reflected that before applying for registration for the commencement of business in some mainland cities, they need to set up an office and provide its detailed address to the local registration department but the address may only be used by the company which applies for registration and may not be shared use by several companies, hence creating investment risks for the company which applies for registration, whether it knows the details and whether it has discussed the solutions with the Mainland;
(d) given that some tax professionals in Hong Kong have reflected that the rules and regulations made by the State Administration of Taxation are subject to different interpretations in different cities, whether it knows the details and whether it has discussed the solutions with the Mainland;
(e) given that some members of the accounting profession in Hong Kong have reflected that there are still certain restrictions on the scope of the business they may develop on the Mainland and they encounter difficulties in employing mainland accountants, whether it knows the details and whether it has discussed the solutions with the Mainland;
(f) given that some SMEs providing construction and related engineering services in Hong Kong have reflected that the thresholds for company registration and qualification assessment in certain mainland cities are very strict, whether it knows the details and whether it has discussed the solutions with the Mainland;
(g) given that some members of the legal profession have reflected that there are certain restrictions on the scope of the practice to be set up by Hong Kong law firms on the Mainland and they cannot employ mainland practising lawyers, whether it knows the details and whether it has discussed the solutions with the Mainland;
(h) given that some members of the medical profession in Hong Kong have reflected that there are strict regulations and restrictions on the practice of medicine, setting up medical clinics or renting mainland medical facilities by Hong Kong private medical practitioners in mainland cities, whether it knows the details and whether it has discussed the solutions with the Mainland;
(i) whether it knows the difficulties faced by Hong Kong pharmaceutical manufacturers in registration on the Mainland; if so, of the details and whether it has discussed the solutions with the Mainland;
(j) given that some members of the insurance industry in Hong Kong have reflected that it is still difficult for Hong Kong insurance brokers to provide services in mainland cities at present, whether it knows the details and whether it has discussed the solutions with the Mainland;
(k) whether it has assessed the progress of the mutual recognition of various professional qualifications between the Mainland and Hong Kong; if it has, of the details; if not, the reasons for that; and
(l) whether it has any plan to further lower the threshold to enter the mainland market and strengthen the mutual recognition of professional qualifications between the two places?
Our consolidated reply to the various questions regarding Hong Kong enterprises exploring business opportunities in the Mainland is as follows -
(a) The Government attaches great importance to the effective implementation of the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA). Over the years, relevant policy bureaux and departments maintain close liaison with trade associations and professional bodies of the service sectors concerned through various channels in order to understand the concerns of the trade. As gathered from the trade, implementation problems may be encountered in certain service sectors, including delay in the promulgation of the Mainland rules, regulations and/or implementation details, ambiguous application procedures, differences in the regulatory regimes governing professional services between the two places and complicated supporting measures which involve nation-wide or cross-industry administration, etc.
We have maintained close liaison with the Mainland authorities at central, provincial and municipal levels to actively follow up on problems encountered by Hong Kong enterprises in using CEPA benefits and to reflect the views of the trade.
(b), (c), (d) and (i) Hong Kong enterprises doing business in the Mainland have to follow the procedures and pay relevant taxes in accordance with the Mainland rules and regulations. According to the understanding of the offices of the Hong Kong Special Administrative Region (HKSAR) Government in the Mainland, the time and application procedures required for business registration in the Mainland, including whether it is necessary to set up an office before the registration of business etc., may vary depending on factors such as the industry and scope of business concerned.
The HKSAR Government will continue to monitor the Mainland policies that are of concern to Hong Kong enterprises and to keep the trade informed of the latest information. We also maintain close contacts with the relevant Mainland authorities, and reflect and follow up with them the views and suggestions of Hong Kong enterprises on Mainland policies affecting them. If any individual enterprise encounters problems, it can provide the specific details of its cases for the offices of the HKSAR Government in the Mainland to reflect to and follow up with the relevant Mainland authorities.
(e), (f), (g), (h) and (j) Since the signing of CEPA in 2003, eight supplements to CEPA have been concluded between the Mainland and Hong Kong. In service sectors like accounting, construction, legal, medical and insurance etc., over the years both sides have adopted a building block approach to achieve progressive liberalisation of CEPA measures, including expansion in business scope, relaxation in geographical location restrictions and reduction in equity share restrictions. Both sides will continue negotiations under the existing mechanism to strive for further expansion and better market access conditions for Hong Kong enterprises and professionals. When using the benefits under CEPA in the Mainland, Hong Kong enterprises and professionals still need to follow the Mainland laws in registration for practice and operation. In this regard, as mentioned in (a) above, the HKSAR Government will liaise closely with the Mainland authorities at central, provincial and municipal levels, to reflect views of the trade on the existing restrictions and take follow up action as appropriate.
(k) and (l) On enhancement of mutual recognition of professional qualifications and further liberalisation, Hong Kong and the Mainland actively promote exchanges among professionals of the two places under CEPA. This includes striving to allow Hong Kong professionals to take Mainland qualification examinations to obtain relevant professional qualifications in the Mainland. At present, people from over 40 Hong Kong professional or technical disciplines under various service sectors can sit for the professional qualification examinations in the Mainland. At the same time, Hong Kong and the Mainland have reached mutual recognition agreements for various professional qualifications or made arrangements for mutual exemption of some examination papers under CEPA in the construction, securities and futures, accounting and real estate sectors.
The HKSAR Government will continue to pursue mutual recognition of professional qualifications under CEPA, and will maintain close liaison and communication with various professional bodies and encourage them to have exchanges with their Mainland counterparts. We will take account of the needs of the trade to continue to liberalise trade in services through CEPA, including further lowering of entry threshold into the Mainland market, with a view to promoting integration and sustainable development of the two economies.
Wednesday, February 29, 2012