If the outbreak of Sars posed a threat to Hong Kong's further integration with the mainland, the emergence of China from the grip of the disease appears to be giving the process fresh impetus.
First there was news of a co-ordinated effort to boost tourism in the Pearl River Delta. Then we learned the mainland had given the green light to a bridge linking Hong Kong, Macau and Zhuhai. Now we hear that the Closer Economic Partnership Arrangement (Cepa) is a done deal. While the verdict on the free trade agreement will have to wait until further details are known, the fact that a consensus has been reached ahead of the June 30 target is an achievement in itself.
Cepa is expected to allow Hong Kong firms to benefit early from the liberalisation of the mainland's restricted service sector, which will open up to foreign companies from 2005 as a result of its accession to the World Trade Organisation. Zero tariffs for Hong Kong goods and other trade benefits are also likely. The talks between Hong Kong and the mainland began early last year and have had to overcome numerous difficulties, including the sensitive matter of how a Hong Kong company will be defined for the purposes of deciding who can benefit from the agreement. Foreign companies based in Hong Kong have been worried they may miss out on any privileges given to local businesses. Mainland ministries, such as those governing telecommunications, financial services, and insurance, were, last year at least, resisting early access for Hong Kong companies. And one mainland trade expert recently accused Hong Kong of being too greedy in the negotiations. There were times when it seemed unlikely a deal would ever be struck. Secretary for Commerce, Industry and Technology Henry Tang Ying-yen clearly had these sensitivities in mind when making comments reported in this newspaper today. He urged Hong Kong not to expect too much from the deal, while also placing emphasis on the benefits to be gained by the mainland. Mr Tang did not seek to hide from the fact that Hong Kong businesses will benefit most from the deal, describing it as being like the opening of a new candy store. But as he points out, the mainland will at least be able to gain valuable experience by opening up to Hong Kong, before the rest of the world.
Senior mainland officials promised they would do something to help Hong Kong recover from the economic impact of Sars. They have honoured that pledge by ensuring a swift conclusion to the Cepa talks. But the agreement also demonstrates a willingness to push ahead with cross-border integration, and as that continues Hong Kong must give, as well as take. Ultimately, the success or failure of the arrangement will depend on the details. We look forward to seeing what has been agreed.
