Helping hand for investing in HK, Macao By Dai Yan (China Daily) Updated: 2004-09-20 08:35
More relaxed rules for mainland enterprises to invest in Hong Kong and Macao
special administrative regions (SARs) will be implemented soon.
The new policy sets out a clear service pledge on handling applications from
mainland investors, in order to facilitate approval procedures, said an official
from the Ministry of Commerce.
The new arrangement will make the application procedure more transparent and
hand over most approval duties to provincial authorities, he said.
Except for enterprises planning to be listed overseas indirectly or
investment holding companies, which will still require approval from the
Ministry of Commerce, firms going to Hong Kong and Macao can choose to invest
through setting up wholly owned or jointly owned businesses, mergers,
acquisitions or capital injection under the relaxed rules, the official said.
The provincial approving authorities would seek opinions from the Hong Kong
and Macao Affairs Office and the Central Government Liaison Office in the Hong
Kong and Macao SARs when needed, he said.
In the past, all applications for investing in Hong Kong and Macao needed to
be scrutinized by the Hong Kong and Macao Affairs Office of the State Council.
As for required documents, the applicant no longer needs to submit, as in the
past, project proposal and feasibility study documents, he said.
The relaxation is part of the Mainland and Hong Kong/Macao Closer Economic
Partnership Arrangement (CEPA) launched last year to boost the SARs' economies
by giving them a head start before many of China's promises for accession to the
World Trade Organization come into full effect in 2005.
Under the CEPA pacts, zero import tariffs have been given to 374 products
deemed of Hong Kong and Macao origin since January 1, 2004.
The Chinese mainland and Hong Kong also broadened their free trade pact by
adding 713 types of goods to the zero-tariff list last month.
The official said more facilitation policies on finance would be issued soon.
Analysts say the new policies will allow Chinese mainland enterprises more
freedom in making decisions to invest in Hong Kong and Macao based on commercial
considerations.
Liu Xueqin, an expert from the Chinese Academy of International Trade and
Economic Co-operation, said the new facilitation policy will encourage more
mainland enterprises to invest in Hong Kong and Macao, and speed up their
decision-making.
She said the policies would shorten approval time to about a month rather
than the six months previously needed.
"Many private firms are expected to make use of Hong Kong as a springboard to
expand their businesses overseas," she said.
Of the 2.4 million enterprises engaged in manufacturing in the mainland, only
about 2,000 have a presence in Hong Kong and most of them are State-owned.
Liu believes the relaxation could duplicate the success of the individual
travel scheme.
By the end of June this year, 1.6 million people from the mainland went to
Hong Kong under the scheme, which means an influx of billions of US dollars
there.
"If each mainland private enterprise sets up one local office hiring two to
three staff each, this will help boost the local economy," he said.
More offices of mainland enterprises would help push up the property prices
in Hong Kong, Liu said.
She did not expect the relaxed rules for mainland private enterprises to
create problems for local businesses.
"Many of Hong Kong's small and medium-sized enterprises are engaged in the
service sector and opening the door to more mainland private enterprises is
likely to provide additional business opportunities for them," she said.
According to Invest Hong Kong, a local investment promotion agency,
accumulated mainland investment in the region by the end of last year was worth
US$24.63 billion. The figure includes both State-owned and private enterprises.
