Opinion | Bar set too high for Hong Kong firms wanting mainland China access
Local businesses say Beijing makes it devilishly difficult to get approval under the Cepa deal
The Closer Economic Partnership Arrangement (Cepa) has been a bit of a disappointment to city businesses seeking access to potentially lucrative mainland markets. To bring any real benefit to Hong Kong, the mainland regulator must be willing to cut the red tape.
The Hong Kong General Chamber of Commerce last week made an interesting proposal to the Hong Kong government on how to make Cepa work better. It wants Beijing to allow certain local firms involved in logistics, tourism or retailing to be given direct access to Guangdong, without the need to wait for regulatory approval.
The tough approval procedures currently in place are exactly why Cepa has failed to live up to expectations. If Beijing was willing to listen to the chamber's suggestion, it would be a real break.
To bring any real benefit to Hong Kong, the mainland regulator must be willing to cut the red tape
Cepa was meant to help Hong Kong, but as usual, what was intended is not what has been achieved. Launched in 2003 as a way to boost the weak Hong Kong economy following the Sars outbreak, the many rounds of Cepa measures announced in the past 10 years were intended to allow the city's banking, retail and film sectors to enter the mainland market.
But so far only very few Hong Kong firms have been allowed to enter through Cepa, because they are required to first secure mainland regulatory approval.
Just ask any bank, broker or accountant, and they will describe for you the lengthy and painful experience of obtaining the necessary approval to gain access to the mainland.
As an example, Cepa had proposed allowing Hong Kong-based futures brokers to set up joint ventures on the mainland. But so far, only a few such ventures have been given the green light.