How both sides can cash in on Cepa
Few economies are blessed with the unique advantages we have in Hong Kong. Our city's position as a special part of China has, since the handover, enabled it to enjoy benefits not available to our competitors. Since 2003, a trade pact has enabled Hong Kong goods and services to enjoy greater access to the mainland. From zero tariffs for products to mutual recognition of professional qualifications, hopes for the Closer Economic Partnership Arrangement (Cepa) were high.
The move made sense and has paved the way for greater cross-border integration. It has further opened the door to an immense market that is sought-after all around the world. The preferential treatment has allowed Hong Kong businessmen and professionals to get a few steps ahead of others. The effort put into fostering the partnership by authorities on both sides is, therefore, welcome. But making it possible is one thing. Making it practical is another. A recent report in this newspaper suggests the scheme has, for some professions, not been as successful as had been hoped. Although more than 600 architects and engineers have had their qualifications recognised on the mainland under Cepa, none can practice there. They are required to pass a further test. The situation for doctors and lawyers is slightly better. But few have chosen to practise because of hurdles in starting up their business across the border. The low pass rate for the exam for lawyers, just 8 per cent at present, is one of the factors making it difficult for those from Hong Kong to make the move.
It is disappointing that only a relatively small number of professionals have benefited from Cepa. The arrangement is not simply a handout for the benefit of Hong Kong businesses, as was the general perception when it was first announced shortly after the economy had been hit by the Sars outbreak. It works both ways.
As our professionals make money on the mainland, they also bring benefits for the country by sharing their experience and expertise. It is to be hoped that the high international standards they adopted will help the Chinese service industry develop along those benchmarks.
During his recent visit, Vice-Premier Li Keqiang promised to further open up the mainland market to Hong Kong's service providers by 2017. It is not clear how well prepared the industry is for the arrangements. There will also be a need for hurdles standing in the way to be cleared, if the best use is to be made of any future agreement. As facilitators, the governments from both sides should smooth the way by providing the necessary institutional framework. It will then be up to individual businesses and practitioners to seize the opportunity. Given the resourcefulness and enterprise of Hong Kong people, there is no reason why we cannot capitalise on these opportunities, make the most of what is on offer and contribute to the country's development.