Leading gold and jewellery producer Hang Fung Gold Technology will invest as much as $300 million over the next three years to expand production and sales in Hong Kong and China as it moves to capitalise on the Closer Economic Partnership Arrangement (Cepa).
Chairman Lam Sai-wing said the company would increase the number of retail outlets from about 50 in China and 10 in Hong Kong to about 300 in both markets by 2006.
Under Cepa, which takes effect on January 1, China's 37 per cent tax on gold and jewellery imported from Hong Kong will be reduced to zero.
But for Hong Kong firms to enjoy the tax-free benefit, they are required to have at least 30 per cent of their production in Hong Kong.
'China's demand for gold will be huge. Chinese people have a habit of wanting to keep gold. Every day, thousands of tourists visit our tourist mart in Hong Kong, most of them from the mainland,' Mr Lam said.
China liberalised its gold and jewellery market in July, allowing overseas firms to trade directly with the mainland.