Who Benefits From CEPA? Let's Wait and See

By Susan Lavender, Solicitor, Dibb Lupton Alsop, Hong Kong

The signing of the China-Hong Kong Closer Economic Partnership Arrangement (CEPA) on June 29 2003 was greeted with enthusiasm by most sectors of society, and not least by Hong Kong's foreign business community. As Hong Kong struggled to recover from SARS, the resulting downturn in the economy and a corresponding rise in unemployment, the prospect of greater business opportunities with the mainland provided a welcome psychological boost to the territory. The reports of zero tariffs on goods imported to China from Hong Kong, greater access to China for Hong Kong services and greater cooperation in trade and investment between China and Hong Kong have generally been welcomed. Amid the excitement, however, not everyone stopped to look closely at the text of CEPA itself in order to understand exactly what it represented and whether or not they were eligible to benefit from the CEPA concessions that interested them.

It is certainly true that Hong Kong's foreign business community can derive benefits from CEPA, but these benefits, their eligibility requirements and their scope need to be understood. It is also critical to understand that there are still major parts of CEPA that remain undecided, and that it would be dangerous to base major decisions upon assumptions with respect to these matters.