Herbal firm first to reap rewards from Cepa
A Hong Kong herbal product manufacturer has become the first company to enjoy zero-tariff status under the free-trade pact with the mainland.
Jing Du Yang Sheng Tang Chinese Herbal Manufacturing Limited was yesterday issued a certificate of origin to export $360,000 worth of loquat paste to the mainland next week without paying any tariff.
The company's managing director Cheung She-wing said the tariff-free status would make his products more competitive in the mainland market.
'We can save some $2 million to $3 million on tariffs this year on this product alone. We're not going to lower the price but with the money saved, we will be able to have more advertisements and conduct more research.
'The 'Made in Hong Kong' tag is very valuable. It gives mainland consumers confidence in our products,' he said.
The manufacturer, with the mainland as its prime market, will send the loquat paste to Shenzhen through the Man Kam To checkpoint next Wednesday.
Before the Closer Economic Partnership Arrangement (Cepa) came into effect on January 1, the company had to pay 3 per cent tax on its medical exports to the mainland.
Mr Cheung said he would consider expanding production. 'If demand increases, we will hire more people and, if the market isn't very good, of course, we would make more redundancies.' He said the company would apply for zero-tariff status for its pain-relieving oil and other herbal products.
By the end of last week, the Trade and Industry Department and five Hong Kong business groups had received 22 applications for the certificate of origin under Cepa. Seven of them were approved. All of them were pharmaceutical products.
Under Cepa, the mainland has eliminated tariffs on 273 types of goods including electronics, textiles, jewellery, clocks and cosmetics. Some of these had been subject to tariffs as high as 35 per cent.