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Content provided by :  Hong Kong Trade Development Council

Getting Closer: Hong Kong and Guangdong

Rex Chang  

Rex Chang, Director of the Hong Kong Economic and Trade Affairs office in Guangdong, says businesses using Hong Kong as a base can expect "huge opportunities" under the new agreement

One of Asia's most vibrant alliances is taking another major step closer after Hong Kong and the Chinese mainland province of Guangdong signed a series of eight pacts, 19 August, to strengthen their cooperation. The agreements cover a variety of sectors, including services, finance, health care, education and the environment. The deals were finalised at the 12th plenary session of the Hong Kong-Guangdong Co-operation Joint Conference in Hong Kong.

Officials from neighbouring regions are now rushing to develop the pacts into proposals. These would be presented to the mainland's Central Government in time to be included among next year's national economic development initiatives.

"Hong Kong-Guangdong cooperation on development strategies has been moving on a national level since January this year, when the Outline of the Plan for the Reform and Development of the Pearl River Delta by the mainland's National Development and Reform Commission was announced," says Rex Chang, Director of the Hong Kong Economic and Trade Affairs Office in Guangdong.

The new framework agreement fills in details on that plan, adds Mr Chang. He points out that the challenge will be to "transform the macro policies into concrete measures" and incorporate the content into the national government's 12th Five-Year Plan.

"This will definitely create huge opportunities not only for Hong Kong businesses, but also overseas and mainland enterprises. And another aspect of the Guangdong pilot schemes is that, if they are successful, they can be expanded. If this proves successful, we can liaise with the central authorities on wider application of initiatives under the pilot schemes to other parts of the Chinese mainland," says Mr Chang.

Greater Collaboration

  Guangdong Governor Huang Huahua and Hong Kong Chief Executive Donald Tsang witness the signing, last 


Guangdong Governor Huang Huahua (standing, third from right) and Hong Kong Chief Executive Donald Tsang (standing second from right) witness the signing, last month, of
the Hong Kong-Guangdong
Co-operation agreement (photo:
HKSAR Government)

Hong Kong Chief Executive Donald Tsang and Guangdong Governor Huang Huahua were on hand to witness the signing of the agreements at the Hong Kong Convention and Exhibition Centre. The deals, which pave the way for greater cooperation on developing service sectors and high-end industries, also covers proposals to enhance exchanges in financial development, disease prevention and control, education, environmental protection and intellectual property rights.

Mr Tsang said that the agreements have the potential to "promote further economic development" in Hong Kong and Guangdong Province "and even the country." as a whole.

Mr Huang said he believed the measures will aid economic recovery in both areas. He also predicted that better collaboration among Hong Kong, Guangdong and the nearby Special Administrative Region of Macau could make the Pearl River Delta (PRD) the most competitive area in the Asia-Pacific region.

Guangdong Province, particularly the PRD, has long been Hong Kong's economic hinterland and closest business and trading partner. Home to the largest number of Hong Kong companies operating outside Hong Kong, it is also the main destination of Hong Kong's outward investment. Economically, the PRD and Hong Kong have complemented each other's development. By some estimates, more than 100,000 Hong Kong-invested enterprises had established themselves in Guangdong as of the end of 2008.

The eight agreements are described as part of a continuous effort by both governments. They comprise specific actions in response to the recent PRD Outline Plan and the six new growth industry sectors indentified by the Hong Kong Special Administrative Region Government.

Do Your Homework

New agreements strengthen ties in the Greater Pearl River Delta region, which comprises Hong Kong, n   

New agreements strengthen ties in the Greater Pearl River Delta region, which comprises Hong Kong, nine municipalities in the mainland's Guangdong Province, and Macau


Mr Chang advises small and medium-sized enterprises (SMEs) using Hong Kong as a base to closely monitor developments in the agreements, and Hong Kong-Guangdong cooperation overall, so that they can move when the time is right.

With the services sector likely to be the first to benefit from the evolving deal, Mr Chang advises SMEs to study cities in the PRD to determine which are strongest in their target industries. Government websites (see links below), including one operated by Mr Chang's office in Guangdong, should prove to be useful resources.

"When this takes off, it will be moving very fast. This is a huge opportunity companies should be ready to seize," he says.

Environmental industries may also find opportunities, with the two governments promising to build the pan-PRD region into a "green and quality living area." Other proposals include the construction of cross-boundary infrastructure facilities, a boundary control point at Liantang/Heung Yuen Wai and construction of a Guangzhou-Shenzhen-Hong Kong Express Rail Link.

Details are also being worked out to establish Hong Kong bank sub-branches in Guangdong and joint-venture securities-investment advisory companies by Hong Kong securities firms. Studies are also being conducted on arrangements to reduce pollution in the region, and to cooperate on education – including the possibility of a Hong Kong curriculum being offered at private schools in Shenzhen.

Regarding health-care services, the administrations will encourage cross-border research on vaccines and medication. This month, officials will meet to review accreditation for Hong Kong practitioners wishing to set up clinics in Guangdong.

Steady Steps


The Basic Agreement

Main points of the 19 August agreement between Hong Kong and Guangdong Province:

* Promote and develop modern service industries in Qianhai, just across the boundary from Hong Kong

* Implement sixth Cepa supplementary agreement in October

* Form a task force on financial cooperation

* Liaise on a rail link between Hong Kong and Shenzhen airports, with a checkpoint at Qianhai

* Cooperate on disease control and prevention, vaccine research and production

* Encourage local tertiary institutes to establish schools in Guangdong

* Improve regional air quality, promote recycling and clean production

* Enhance intellectual property protection 

Officials working on the agreement say an initial focus will be on the mainland's special economic zone in Shenzhen, north of Hong Kong, and in Qianhai, a 10-square-kilometre zone in nearby Shekou. China's Central Government and Guangdong authorities have targeted the two areas for developing modern producer services in cooperation with Hong Kong.

Experts from Hong Kong and Shenzhen must also hammer out details of the implementation plan for Qianhai, recognised as a strategic hub for sea, air and rail transportation. Though the recently signed document does not outline specific cooperation projects for now, the two sides say they will study ways to promote service industries in Qianhai and encourage Hong Kong businesses to set up operations there. It may also offer a means of implementing pilot measures under the Closer Economic Partnership Arrangement (Cepa), which grants Hong Kong service industries easier access to Guangdong's market.

In a further sign of closer cooperation between the two regions, the Guangzhou government and the Hong Kong Trade Development Council (HKTDC) plan to sign a cooperation agreement to bring in Hong Kong companies to help develop the exhibition business in the province.

Among the trade events being considered are fairs showcasing mechanical, biological, chemical and electronic communication technology products.

Related links
Hong Kong Economic & Trade Office in Guangdong
Hong Kong Government Announcement
Hong Kong Government Information Services Department

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