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The Mainland/Hong Kong Closer Economic Partnership Arrangement (CEPA) is a special arrangement under the "one country, two systems" principle and the World Trade Organization (WTO) framework, said Chinese Premier Wen Jiabao Sunday in Hong Kong.

Premier Wen Jiabao accepts flowers from a Hong Kong girl after he arrives in Hong Kong International Airport Sunday afternoon, June 29. [newsphoto.com.cn]

Delivering a speech when meeting with people from various communities in Hong Kong after the signing ceremony of CEPA Sunday afternoon, the premier said the arrangement embodies a closer economic relationship between China as a sovereign state and Hong Kong as a separate customs territory, and demonstrates the care and support for Hong Kong from the Central Government and the fellow folks of the motherland.

"I hope that this arrangement will bring more opportunities to Hong Kong's business communities and provide some practical help to Hong Kong's economic recovery and growth," he said.

Wen also said CEPA represents only the first step towards a closer economic partnership between the Mainland and Hong Kong, adding that "In future, we should not only implement this arrangement in earnest but keep up our study in light of the new developments and update our policies and measures."

"In the meantime, we should step up efforts to promote economic cooperation between Hong Kong and the Pearl River Delta in particular," Wen added.

The premier reiterated that the Central Government will unswervingly commit itself to the policies of "one country, two systems," "Hong Kong people administering Hong Kong" and a high degree of autonomy and the Basic Law of Hong Kong.

"This is the message I have come to convey," he said, adding that "these set policies of the Central Government towards Hong Kong will not change."

Wen arrived in Hong Kong to attend the CEPA signing ceremony and the celebrations of the 6th anniversary of Hong Kong's return to the motherland.

CEPA covers three areas of trade in goods, trade in services and trade and investment facilitation and its basic objective is to phase out tariffs and non-tariff barriers on trade in goods, phase in liberalization of trade in services and promote trade and investment facilitation in an effort to bring about common development by upgrading the economic partnership between the Mainland and Hong Kong.

The centerpiece in trade in goods is the early start of zero tariffs. As of January lst, 2004, goods of Hong Kong origin under 273 tariff items that are important to its economy will enjoy zero tariff treatment when coming into the Mainland.

And zero tariffs will apply to other goods of Hong Kong origin no later than January 1st, 2006.

On trade in services, effective January lst, 2004, the Mainland will implement some of the commitment it made to World Trade Organization (WTO) members ahead of schedule for the benefit of Hong Kong.

In addition, restrictions on equity ratio will be lifted, thresholds on registered capital and technical qualifications lowered and limitations on geographic location and business scope eased for Hong Kong-funded ventures in certain sectors and industries.

Incidentally, CEPA covers 17 areas of the service sector.

On trade and investment facilitation, the Mainland is committed to simplifying procedures in seven areas, namely, trade and investment promotion, customs clearance, transparency of laws and regulations, e-commerce, commodities quarantine, inspection and quality certification, cooperation among small and medium-sized enterprises and traditional Chinese medicine development cooperation.

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