HK benefits from enhanced economic co-op with Chinese mainland

FE Team | Published: June 29, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

HONG KONG, June 28 (CEIS): The China Development Bank (CDB) has announced that it will issue 5 billion yuan (about 657 million US dollars) RMB bond in Hong Kong, in a sigh of enhanced economic cooperation between the Chinese mainland and Hong Kong.
"The issuance of RMB bonds here will strengthen Hong Kong's status as an international financial centre," said Sung Man, professor at the University of Hong Kong.
The expanding of Renminbi business in Hong Kong will not only give local investors more choices but also help Renminbi develop into a capital instrument gradually, said Sung.
The expanding of Renminbi business is only one of a series of supportive measures for Hong Kong launched by the central government. After Hong Kong returned to the motherland in 1997, Hong Kong and the Chinese mainland enhanced economic and trade cooperation, which helped Hong Kong maintain its prosperity.
During the past 10 years, Hong Kong's economy suffered from a series of difficulties, including the Asian financial crisis and Severe Acute Respiratory Syndrome (SARS). To help Hong Kong get through, the central government has taken many measures and given "all-out support" to Hong Kong, said economists in Hong Kong.
In 2003, the Chinese mainland and Hong Kong signed the closer economic partnership arrangement (CEPA), scrapping tariffs on products manufactured in Hong Kong gradually, expanding market access for Hong Kong services trade to the mainland, and improving trade and investment facilities between the two areas.
By the end of April this year, the Chinese mainland has imported Hong Kong-made products worth 1.3 billion US dollars and 1,753 Hong Kong-based companies have invested in the mainland under the preferential policies offered by the CEPA.
"The implementation of the CEPA shows the support of the central government," said Chu Man Fai, researcher with the Commercial Economic Research Centre of the Hong Kong Polytechnic University.
Like the CEPA, the "individual visit scheme" which was launched the same year also gave impetus to Hong Kong's economy. At that time, Hong Kong was hit by the SARS epidemic and tourism and retail business were among the most severely affected.
To rejuvenate Hong Kong's tourism industry, the central government in 2003 decided to allow mainland residents in some cities to go to Hong Kong more freely under the "individual visit scheme."