Business chiefs say the free-trade deal between Hong Kong and the mainland will create thousands of jobs for Hong Kong workers. Manufacturers would move production from the mainland back to Hong Kong, they said. The South China Morning Post reported yesterday that talks on the closer economic partnership arrangement (Cepa) had been completed and the agreement would be signed in Hong Kong this month. Henry Tang Ying-yen, the Secretary for Commerce, Industry and Technology, predicted the pact would lure many foreign and mainland firms to Hong Kong because of its improved access to the mainland market. Chan Wing-kee, president of the Chinese Manufacturers' Association of Hong Kong, said removing tariffs on Hong Kong's exports to the mainland would encourage jewellery and pharmaceuticals firms to expand here. Tariffs of 15 to 18 per cent are currently paid on Hong Kong's exports to the mainland, said association vice-president Paul Yin Tek-shing. Tariffs on high-value jewellery exports to the mainland are as high as 39 per cent, and the industry says most of its exports go to other markets. Leung Sik-wah, chairman of the Hong Kong Jewellers' and Goldsmiths' Association, also said the industry would enlarge its production base in Hong Kong if tariffs were scrapped. Mr Leung said 80 per cent of production had been moved to the mainland because of its lower operating costs. Carollio Chow, chairman of the Federation of Hong Kong Watch Trades and Industries, agreed that members would consider moving part of their assembly procedures back to Hong Kong if tariffs on exports were scrapped. Mr Chow believed the zero tariff would be imposed in phases and would not have an immediate or significant impact on the industry. The agreement is also expected to provide early access to the mainland's service industries.
