HK businesses reap rewards from new trade arrangement
About 24 billion yuan ($3.5 billion) worth of Hong Kong goods imported through Shenzhen Customs have been exempted from tariffs since the implementation of the Closer Economic Partnership Arrangement in 2004, saving 2.56 billion yuan in tariffs for businesses, the customs said on Tuesday.
The value of Hong Kong goods benefiting from CEPA increased nearly nine times over the past 15 years, from 260 million yuan in 2004 to 2.26 billion yuan in 2018, it said.
Eleven categories of products enjoyed zero tariffs in 2018, the customs said. Food was the biggest beneficiary, with more than half of the total value coming from the category. That was followed by chemicals, plastics and plastic products, accounting for about 30 percent and 13 percent, respectively.
“A wide range of Hong Kong businesses have benefited from CEPA, from the city’s traditional pharmaceutical industry to those less advanced industries such as mechanical and electronics industry,” Lin Guozhong, deputy head of Shenzhen Customs, said.
“We have been making great efforts to provide a pleasant trade environment and offer high-quality services under the CEPA framework.”
Last month, an updated version of the CEPA was launched with the aim of further boosting trade between the mainland and Hong Kong.
The Agreement on Trade in Goods under the CEPA framework allows a more comprehensive list of Hong Kong products to benefit from tariffs exemption.
“Hong Kong-produced products with raw materials imported from the mainland can now enjoy zero tariff. In the past, only a few products had the treatment,” Zheng Dongyang, deputy director of tariffs division at the customs, said.
“This will further promote integration between the mainland and Hong Kong manufacturing industry.”
Trade between the mainland and Hong Kong has seen significant growth under the framework of CEPA, which aims to strengthen economic and trade cooperation between the two sides.
According to government statistics, trade in goods between the Chinese mainland and Hong Kong amounted to approximately $141.4 billion in the first half of 2018, growing 11.9 percent year-on-year.
Businesses hailed the cooperation, saying it helped cut costs and boost competitiveness.
Liu Yibing, assistant president of Shenzhen Kingworld Medicines Co Ltd, which is the mainland agent of several kinds of Hong Kong-produced medicines, said with an import value of about HK$522 million last year, the company was able to save 13.2 million yuan in tariff thanks to CEPA.
“That has greatly reduced our cost and made our products more competitive on the market. As a result, our market share has been growing steadily over recent years,” he said, without giving specific figures.
Liu was echoed by Lin Guanggang, director and deputy general manager of Shenzhen Tiancheng Food Co Ltd — the mainland agent of Hong Kong mooncake brands Maxim and Wing Wah.
“Last year, we imported HK$500 million worth of mooncakes and saved 43.9 million yuan in tariff,” Lin said.
“The cost reduction helps us to stay competitive and achieve good sales performance.”