Market opening to see more rivalry, benefits
Services industry expected to steal focus as Beijing pledges to allow wider access for foreign investors
Beijing's pledge to open its markets wider to foreign investors may bring opportunities for those seeking to enter the mainland economy, with the services industry set to gain more attention in the years to come.
For Hong Kong businesses and professionals such as accountants, who have enjoyed privileged access under the Closer Economic Partnership Arrangement since 2003, a more liberalised mainland market may bring more competition. But the mainland's prosperity is also likely to benefit them, experts say.
Commerce Minister Gao Hucheng said on Tuesday Beijing would accelerate unifying laws for foreign and domestic investors, pushing forward the opening of sectors including finance, education, culture, and medical services in "an orderly way".
Access barriers would be lifted in a range of areas including parental and aged care, accounting, architecture, trade and logistics, and e-commerce, Gao said.
The Communist Party decided at its recent plenary meeting to open more areas to foreign investors as part of efforts to introduce more competition into the market.
As part of the changes, Beijing will adopt a "negative list" to show areas that foreign investors are banned from entering, leaving anything not included in the list open to all investors. In the past, foreign investors had to go through a lengthy review process to gain approval for each investment.
"The opening up of the capital account and the services sector is an inevitable trend," said Liu Yuanchun, a professor at Renmin University. "The negative list marks a revolutionary change in the regulatory system, creating greater room for development and innovation."
Hong Kong Institute of Certified Public Accountants president Susanna Chiu said the opening up of the accounting market to all accountants worldwide would encourage more overseas professionals to establish themselves in China, which would add competition pressure to Hong Kong accountants.
Under Cepa, Hong Kong's 35,000 accountants are exempt from four of the six tests needed in becoming members of the China Institute of Certified Public Accountants. This qualification allows them to set up firms in Qianhai, the special economic development zone in Shenzhen.
"If China allows overseas accountants to freely be partners and to set up firms on the mainland, Hong Kong accountants would lose the privilege we enjoy now," Chiu said. "However, Hong Kong accountants would also benefit from the opening up policy.
"Hong Kong accountants can speak the local language and understand the local culture, which would allow us to compete with overseas accountants."
Stanley Lau Chin-ho, the deputy chairman of the Federation of Hong Kong Industries, said Hong Kong businesses had advantages over their foreign counterparts, such as familiarity with the mainland market.
Under Cepa, Hong Kong companies are exempted from import duties when they ship goods into the mainland. "I doubt any foreign country would enjoy the same favourable terms as us," he said.
Cao Hongying, a deputy director general of Foreign Investment Administration at the Commerce Ministry, confirmed Hong Kong's favoured status would remain. "The mainland market's openness to businesses from Hong Kong, Macau and Taiwan will remain greater than elsewhere," he said.