Mainland companies say the free-trade agreement promises to bring them greater competition and benefit Hong Kong's service providers. Scrapping tariffs could bring lower prices for Hong Kong goods on the mainland, especially for luxury items like watches and jewellery, cheering consumers, industry officials said. Wang Huiqun, deputy secretary of the Shanghai Gold Ornament Industry Association, said: 'This could reduce opportunities for domestic enterprises and bring more competition from Hong Kong companies. But this is good for the overall prosperity of the market.' Buyers of watches and jewellery should enjoy lower prices after the mainland eliminated tariffs on January 1, he said. For some goods, like textiles and clothing, little impact was expected, industry officials said. Hong Kong textile companies which have moved their manufacturing operations to the mainland would have more flexibility to sell locally, but most are focused on exports. The real benefits for Hong Kong companies were in 17 service sectors which the mainland had agreed to open further, analysts said. Mainland firms said the move could help them prepare for foreign competition under the WTO. 'Chinese insurance firms have been preparing for competition from foreign companies since WTO entry. Now the pace has quickened, but there won't be a big impact,' said Dai Yun of the corporate planning department of Ping'an Insurance. The service industry in Pearl River Delta cities will also come under pressure after the agreement, according to mainland economists. Many in Guangdong questioned whether it was a gift given by the central government but paid by the provincial government. The chief representative of the China Council for Promotion of International Trade, Zhang Xiaoli, said Guangdong would need to discuss the deal: 'Cepa is an agreement settled by the central government but not the provincial government. We will have to sit down and discuss how Guangdong province could take advantage of it.' Lin Jiang, deputy director of Sun Yat Sen University's centre for Hong Kong, Macau and the Pearl river delta, said the mainland services industry would feel the heat as it would have to compete with more efficient Hong Kong professionals. 'There is going to be some impact on the services industry. Firms which have performed poorly may fold under the competition from Hong Kong side,' said Professor Lin.