The service sector would benefit from the additional exemptions under Cepa The mainland is considering increasing the number of Hong Kong-made goods to be exempted from import duties under Cepa. Announcing the move, Vice-Minister of Commerce Zhang Zhigang also said that Hong Kong's service sector would benefit further from greater market access on the mainland. Mr Zhang described the Closer Economic Partnership Arrangement (Cepa) signed between the mainland and Hong Kong in July as an inevitable step as the two economies became closer to each other. Among a host of other incentives, the agreement allows for 273 types of merchandise manufactured in Hong Kong to be exported tariff-free to the mainland. This concession will come into effect next year. 'This agreement ... will certainly lead to further integration of the two economies,' Mr Zhang told a seminar at the China International Fair for Investment and Trade yesterday. 'This will enable us to develop our comparative advantages in a complementary way and achieve growth together.' In an address to the Xiamen fair on Monday, Chief Executive Tung Chee-hwa called on mainland and foreign entrepreneurs to set up valued-added factories in Hong Kong to take advantage of Cepa. Hailing Cepa as the mainland's 'first free-trade agreement' since it joined the World Trade Organisation two years ago, Mr Zhang said it laid the foundation for a new phase of economic development on the mainland and in Hong Kong. He said the central government was considering expanding Cepa's list of tariff-free merchandise, but did not say by how much or when. The vice-minister said government departments from the mainland and Hong Kong were now busy reviewing details of the agreement to iron out any obstacles, so that it would be ready for implementation next year. Zhu Zenan, vice-director of Guangdong's Foreign Trade and Economic Co-operation Bureau, said the deal would also give the province a boost. 'Hong Kong will build the world's most competitive economy with this alliance with the Pearl River Delta,' he said. 'This agreement will allow Guangdong to focus on building a superb manufacturing environment, the best in the world, while Hong Kong will further build its financial, trade, shipping and retail and service industries into the world's most competitive.' Zhou He, director of the Beijing Foreign Trade Commission, said Beijing also looked forward to sharing some of the Cepa action. 'We hope with Cepa, even more Hong Kong companies can invest in Beijing, especially in our finance and securities industries, our tourism, retail, media and entertainment industries,' Mr Zhou said. 'In all these industries, under Cepa, there are huge opportunities for investment for Hong Kong investors. 'Hong Kong is an expert in the conference and trade exhibition business and we hope Hong Kong can help us build our conferencing industry as well.'