Answers to Key Questions Received for Webinar on “Hong Kong as a pro-business gateway to China”
- 1. When will the travel restrictions be lifted, especially for Guangdong and Shenzhen? Is the Hong Kong government considering introducing any Travel Bubble arrangements and Business Track arrangements? What will be the policy and timeline for the Hong Kong Government to streamline/lift the requirement of undergoing 21-day quarantine at designated hotels?
- 2. Will Hong Kong continue to be an international financial centre? What benefit will Wealth Management Connect bring to businesses?
- 3. When would Hong Kong lift the import ban on Japanese food and agricultural products? How can Hong Kong act as a hub for re-export of Japanese food and agricultural products to the Mainland China?
- 4. With the emerging opportunities from net zero commitments, how Hong Kong will formulate policies/regulation/standards to “create” commercially viable opportunities?
- 5. Will Hong Kong rules and regulations be applied in the Shenzhen-Hong Kong Innovation and Technology Co-operation Zone? Besides, any update on the Shenzhen Science Park, some facilities of which will be managed by Hong Kong Science and Technology Parks (HKSTP)?
- 6. In Qianhai, since last August, Hong Kong companies registered can choose to select Hong Kong law for their business contracts and agreements. Will this also be applicable in other areas in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) in the near future with a view to developing Hong Kong as the centre for international legal and dispute resolution services in the Asia-Pacific Region?
- 7. What are the visible advantages of establishing companies in Hong Kong? How “Hong Kong as a pro-business gateway to China” could benefit existing Japanese companies in Hong Kong, including those Japanese companies which aim to expand their business in Hong Kong?
- 8. Will the Rule of Law and “One Country, Two Systems” principle be maintained in Hong Kong? Will freedom of the people and companies continue to be protected?
1. When will the travel restrictions be lifted, especially for Guangdong and Shenzhen? Is the Hong Kong government considering introducing any Travel Bubble arrangements and Business Track arrangements? What will be the policy and timeline for the Hong Kong Government to streamline/lift the requirement of undergoing 21-day quarantine at designated hotels?
Cross-border travel between Hong Kong and overseas
- As the global epidemic situation remains severe with the new virus variants still ravaging many parts of the world, the Hong Kong Special Administrative Region (HKSAR) Government needs to maintain the 21-day compulsory quarantine requirement for persons who have stayed in extremely high-risk and very high-risk places. However, as announced by the Chief Executive on 12 April 2021, Hong Kong will refrain from adopting the “stop-and-go” strategy and will gradually adjust the quarantine requirements in accordance with the actual situation of overseas places. Considering that the epidemic situations in certain places have stabilised and posed lower public health risks, with reference to the “vaccine bubble” concept, the HKSAR Government since early May has adjusted the quarantine arrangements for persons who have stayed in overseas places other than extremely high-risk and very high-risk places.
- While the basic boarding and quarantine requirements for high-risk and mediumrisk places will remain unchanged –
- i. for high-risk and medium-risk places, the compulsory quarantine period for fully vaccinated persons has been shortened from 21 days to 14 days;
- ii. for low-risk places, the compulsory quarantine period for fully vaccinated persons has also been correspondingly shortened from 14 days to 7 days; and
- iii. persons that have completed quarantine under (i) and (ii) above are required to self-monitor for seven days and undergo compulsory testing after their shortened quarantine.
- The arrangements for inbound travellers (including those from Japan) to Hong Kong are set out at this webpage https://www.coronavirus.gov.hk/eng/high-risk-places.html
Cross-border travel between Hong Kong and the Mainland
- As the epidemic situation in the Mainland is under control, and that in Hong Kong has shown clear signs of stabilising, Hong Kong is making preparation for the introduction of the “Come2hk” Scheme under which non-Hong Kong residents from Guangdong province and Macao, upon fulfilment of relevant conditions, would be exempted from compulsory quarantine when entering Hong Kong. The HKSAR Government would maintain close communication with Mainland authorities on the gradual and orderly resumption of cross-boundary travel between the Mainland and Hong Kong.
Travel bubble arrangement/business track arrangement
- Under relatively stable epidemic situations, the HKSAR Government strives to resume cross-border travel in a gradual and orderly manner, and explore from mid-2020 the establishment of “Travel Bubbles” with overseas economies that had a relatively stable epidemic situation and close economic and trade relations with Hong Kong while balancing the need to protect public health under the strategy of preventing the importation of cases. The HKSAR Government will continue to closely monitor the epidemic development, and also consider resumption of cross-border travel with overseas economies with a set of stringent anti-epidemic measures provided that the local epidemic situation remains stable and make announcement in due course.
2. Will Hong Kong continue to be an international financial centre? What benefit will Wealth Management Connect bring to businesses?
Hong Kong as International Financial Centre
- Hong Kong, leveraging on our institutional strengths, has long been a leading international financial centre and this role is irreplaceable. Our financial services sector is characterised by a highly open and internationalised market, robust infrastructure support, internationally aligned regulatory regime, rule of law, a large pool of financial talents, a full range of financial products and free flow of information and capital. With these advantages, Hong Kong has been the listing venue of choice for companies. We ranked number two globally by initial public offering (“IPO”) funds raised in 2020, amounting to over US$50 billion and recording a year-on-year increase of 27%. Hong Kong is also the second-largest listing venue for biotechnology companies globally and private equity centre in Asia, and is a prominent international risk management centre.
- In addition, Hong Kong’s financial system is sound and resilient to shocks. While the evolving situation of the COVID-19 pandemic, coupled with other uncertainties in the global environment, have caused financial markets globally to become more volatile over the past year or so, Hong Kong’s financial system has been operating smoothly, and the Linked Exchange Rate System and various facets of the markets functioning in an orderly manner.
- Furthermore, under the “One Country, Two Systems” principle, Hong Kong has been the principal gateway for financing and business between the Mainland and the rest of the world. As of March 2021, over half of the some 2 500 companies listed in Hong Kong were Mainland enterprises. Hong Kong is also the world’s largest offshore Renminbi business hub. Going forward, Hong Kong is set to benefit from the vast and growing markets of the Mainland as we further contribute to our country’s dual circulation. China’s top legislature, the National People’s Congress, has recently approved the 14th Five-Year Plan, in which Hong Kong’s functions in the overall development of our country are recognised. Those in relation to developments of Hong Kong’s financial services sector include supporting Hong Kong to enhance its status as an international financial centre, consolidating our function as a global offshore RMB business hub, international asset and risk management centre, and deepening and widening of mutual access between the financial markets of Hong Kong and the Mainland.
- We will continue to enhance Hong Kong’s position as an international financial centre of China, of Asia and of the world, make good use of Hong Kong’s connectivity with the Mainland and international markets and capitalise on the opportunities presented by the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) development and the Belt and Road Initiative. We will also continue to develop Hong Kong into a broader and deeper fundraising platform, further enhance Hong Kong’s position as a centre for green and sustainable finance, and support the development of financial technology.
- Looking forward, the private equity and venture capital funds in Hong Kong would also see collaboration opportunities with Japanese companies in the area of gerontechnology and relevant industries having regard to similar demographic developments in both economies. The promulgated measure which allows overseas insurance companies to set up after-sale offices in the GBA cities would also provide business opportunities to Japanese insurance companies.
Benefits of Wealth Management Connect
- Covering around one-fifth of the high-net-worth families (with assets over USD 1 million approximately) in the Mainland, GBA is one of the most prosperous regions and there is rising demand from Mainland residents for offshore assets allocation. In addition, Hong Kong investors who wish to capture the growth potential of the Mainland may find it attractive to invest in Mainland wealth management products for yield enhancement and further diversification. The stable economic growth and enormous potential of the Mainland have prompted many international investors to increase their exposure to Mainland-related investments, in particular RMB assets.
- The People’s Bank of China, the Hong Kong Monetary Authority (HKMA) and the Monetary Authority of Macao jointly announced in June 2020 the Wealth Management Connect to allow residents in Hong Kong, Macao and nine Mainland cities of the GBA to carry out cross-boundary investment in wealth management products distributed by banks in the area to address the wealth management needs of the residents. Not only will Wealth Management Connect bring enormous business opportunities to the entire financial industry value chain and other professional services in Hong Kong, it will also promote the cross-boundary flow and use of RMB, reinforcing Hong Kong’s position as the global offshore RMB business hub and the international asset management centre.
- It is planned that for northbound and southbound, there would be an aggregate quota of RMB 150 billion in each direction and an individual investor quota of RMB 1 million.
- Figures to substantiate Hong Kong’s international financial centre status and selected financial market statistics of Hong Kong and Japan are set out at Annex.
Figures to substantiate Hong Kong’s IFC status
|Proportion of financial sector to Hong Kong’s GDP||About 21%|
|Initial Public Offering (IPO)||27% yearly increase, raised USD51.6 billion from 154 listing, second largest in the world in 2020|
|Connection with the Mainland’s economy||Over half of some 2 500 listed companies were Mainland enterprises Listed companies in Hong Kong (as at Feb 2021) RMB offshore business hub|
|Asset under management (AUM)||USD3.7 trillion worth of asset (10 times of Hong Kong’s GDP), 64% of which came from non-local investors|
Selected financial market statistics of Hong Kong and Japan
|Market Capitalisation (US$ Bn)
|＜Ranking in Asia＞||＜1st＞||＜3rd＞|
|Equity Funds Raised (US$ Mn) (2020)||95,919||38,007|
|＜Ranking in Asia＞||＜2nd＞||＜4th＞|
|Fund Raised through IPO (US$ Mn)
|＜Ranking in Asia＞||＜1st＞||＜8th＞|
|No. of Exchange-traded Funds(“ETF”)^
(as at end February 2021)
|＜Ranking in Asia＞||＜4th＞||＜2nd＞|
|Turnover of ETFs (US$ Mn)
|＜Ranking in Asia＞||＜5th＞||＜3rd＞|
|Outstanding Amount of Debt Securities (US$ Bn)
|＜Ranking in Asia＞||＜6th＞||＜2nd＞|
|Total amount of bond issuance in Asia (US$ Bn)
(as at end 2020)
|＜Ranking in Asia＞||＜3rd＞||N.A.|
|- Local currency denominated||563||2,093|
|＜Ranking in Asia＞||＜5th＞||＜2nd＞|
|International (offshore) bond issuance by Asia Borrowers in Asia@ (US$ Bn)
(as at end 2020)
- By main location of arrangement
|＜Ranking in Asia＞||＜1st＞||＜4th＞|
|- First time bond issuance by main location of arrangement||18||N.A.|
|＜Ranking in Asia＞||＜1st＞||N.A.|
|- By listing location||161||N.A.|
|＜Ranking in Asia＞||＜2nd＞||N.A.|
|Outstanding amount of external transactions (US$ Bn)
|＜Ranking in Asia＞||＜2nd＞||＜1st＞|
|Foreign Exchange Market|
|Total foreign exchange turnover (US$ Bn)
|＜Ranking in Asia＞||＜2nd＞||＜3rd＞|
|Insurance density (US$)
|＜Ranking in Asia＞||＜1st＞||＜5th＞|
|Gross premium income (US$ Bn)
|＜Ranking in Asia＞||＜6th＞||＜2nd＞|
|Insurance penetration (%)#
|＜Ranking in Asia＞||＜2nd＞||＜4th＞|
|Global Ranking of Financial Services|
|Global Financial Centres Index (as of March 2021)|
|Financial System (Global Competitiveness Report 2019)|
|＜Ranking in Asia＞||＜1st＞||＜4th＞|
|(*)||Refers to Hong Kong Exchanges and Clearing Limited and Japan Exchange Group.|
|(^)||ETFs are portfolio investment products that are admitted to listing or trading on a regulated Exchange. An ETF provides investors with exposure to a diversified basket of shares or other financial instruments. ETFs aim to replicate the performance of a specific index; this index can be a blue chip, a regional, or a sector index. The index type is not just limited to shares and may include bond indexes and other types of sophisticated index. ETFs are traded in the same way as any other share. These instruments can be used by investors as a hedging tool or as an investment product.|
|(@)||Refers to International, offshore bond with issues that are sold in a non-local market. Asia borrowers are defined as borrowers with the majority of their business takes place in Asia. The main location of arrangement is the jurisdiction which more than 50% of the lead managers of a deal comes from.|
|(#)||Insurance penetration is the insurance premiums (life and non-life) as a percentage of gross domestic product (“GDP”).|
3. When would Hong Kong lift the import ban on Japanese food and agricultural products? How can Hong Kong act as a hub for re-export of Japanese food and agricultural products to the Mainland China?
- We welcome Japanese enterprises making use of Hong Kong as the re-export hub for Japanese food and agricultural products to Mainland China.
- Hong Kong has been acting as the gateway to the Mainland market. In terms of cargo handling facilities, the Hong Kong International Airport (HKIA) has built up its capability in handling cold-chain logistics for perishable cargo, such as live seafood, fruits and vegetables, and frozen meat, etc. For food transshipped via Hong Kong to the Mainland (i.e. no importation into Hong Kong), there is no specific food import control requirement in Hong Kong. As for re-export, as long as the food products concerned are permitted for import into the Mainland, there is basically no restriction for importing food products into Hong Kong for re-export to the Mainland, except certain food categories such as chilled or frozen meat and poultry which would require import permission from the Food and Environmental Hygiene Department of the HKSAR Government. In the latter case, applications for import permission can be made online round-the-clock and the import permission will be granted within several hours to a day, if all necessary documents are available.
- On the import of food from Fukushima and its four neighbouring prefectures (i.e. Ibaraki, Tochigi, Chiba and Gunma) following the Fukushima Nuclear Power Station incident in March 2011, the import ban on certain food from the four neighbouring prefectures has been lifted and replaced by the requirement of radiation certificate and exporter certificate since July 2018. In addition, as from January 2021, the previous practice of conducting radiation testing on every consignment of Japanese food has ceased and such testing is now conducted on the basis of risk assessment under the routine food surveillance programme. After implementation of this new measure, almost all food consignments arriving in Hong Kong from Japan (around 40 000 consignments a year) can be released immediately upon arrival, whether transported by air or by sea. This measure is welcomed by the trade and in fact, demonstrates a good balance between ensuring public health and facilitating trade.
- As to the import ban on certain food (i.e. vegetables, fruits, milk, milk beverages and dried milk powder) from Fukushima, the community’s concerns are understandable as Hong Kong people consume a lot of Japanese food. The recent decision of the Japanese Government to discharge treated water of the Fukushima Daiichi Nuclear Power Station into the sea has also raised concerns of the international community. The HKSAR Government has been maintaining close liaison with the Japanese authority to convey our concerns and to obtain relevant data and information for our review.
4. With the emerging opportunities from net zero commitments, how Hong Kong will formulate policies/regulation/standards to “create” commercially viable opportunities?
- The 2020 Policy Address announced that Hong Kong would strive to achieve carbon neutrality before 2050. To this end, the HKSAR Government will update the “Hong Kong’s Climate Action Plan 2030+” (published in 2017) in the latter half of this year to set out more proactive strategies and measures to reduce carbon emissions.
- The HKSAR Government will examine various means to reduce carbon emissions. For example, we will explore different types of zero-carbon energy and decarbonisation technology; enhance the energy efficiency of new and existing buildings; introduce more stringent energy efficiency standards; promote zero-carbon vehicles and green transportation; and build large-scale waste-to-energy facilities, etc.
- Local electricity generation accounts for about 66% of Hong Kong’s carbon emissions. To achieve deep decarbonisation, we have seen to it that the power companies use more natural gas instead of coal for electricity generation, and aim at supplying more zero-carbon energy. As almost all fuels are imported, I can foresee an increasing demand for natural gas in the near future, in particular liquefied natural gas (LNG) when our new offshore LNG terminal comes into operation in 2022. Potential suppliers might wish to take note of this development.
- At the same time, the HKSAR Government is taking the lead in developing renewable energy (RE), and is building, for instance, RE systems at reservoirs and landfills. Over the years, we have also embarked on the journey of building a number of state-of-the-art waste-to-energy infrastructure, such as the T•PARK for sewage sludge, the O•PARKs for food waste and the I•PARK for municipal solid waste, and waste management companies have been very interested in the delivery of these projects.
- Outside the HKSAR Government, we have introduced the Feed-in Tariff (FiT) Scheme, whereby investors can receive a payment of HKD 3 to 5 (around JPY 40 to 70) for each unit of electricity they generate for the grid. With other supporting measures in place (such as relaxing rooftop installation restrictions and helping schools and welfare organisations install their own systems), the FiT Scheme has attracted more than 14 000 applications in just two years, so there is a thriving market for RE equipment and services, in particular solar energy systems. Japanese companies with relevant experience and expertise can look for these business opportunities.
- Apart from promoting the use of cleaner energy, we need to use energy more wisely. As buildings account for 90% of Hong Kong’s electricity use and around 60% of carbon emissions, we have been exploring ways to enhance the energy efficiency of both new and existing buildings, such as introducing more stringent energy efficiency standards and promoting retro-commissioning and retro-fitting. Japanese companies may work with the building sector in Hong Kong to enhance the energy efficiency performance of the buildings. To capitalise on the environmental benefits of district cooling systems (DCS) which offer a very energy-efficient cooling solution for Hong Kong, we are now using DCS at the Kai Tak Development, and as a matter of policy will do the same in other new development areas such as Tung Chung New Town Extension (East) and Kwu Tung North. The upcoming DCS projects will offer more opportunities for operators including those from Japan.
- The transport sector accounted for about 18% of Hong Kong’s carbon emissions in 2018. We have been reducing carbon emissions in the transport sector by expanding the railway network, promoting green vehicles and ferries (including electric vehicles (EV) and electric ferries), and have set up a New Energy Transport (NET) Fund to encourage the transport sector to test out and widely adopt green innovative transport technologies.
- The promotion of EVs is high on the HKSAR Government’s agenda. We announced in March 2021 the Hong Kong Roadmap on Popularisation of Electric Vehicles which set out the long-term policy objectives and plans to promote the adoption of EVs and their associated supporting facilities in Hong Kong. To encourage the wider use of EVs in Hong Kong, we have offered first registration tax concessions for EVs, and launched in October 2020 a HK$2 billion (or 28 billion Japanese Yen) “EV-charging at Home Subsidy Scheme” to promote the installation of EV charging-enabling infrastructure in car parks of existing private residential buildings. The automotive industry in Japan is welcome to develop more EV models suitable for Hong Kong, including e-private cars and e-commercial vehicles, to meet the rising demand for EVs in the coming years. We look forward to the participation of Japanese companies in our expanding EV market.
5. Will Hong Kong rules and regulations be applied in the Shenzhen-Hong Kong Innovation and Technology Co-operation Zone? Besides, any update on the Shenzhen Science Park, some facilities of which will be managed by Hong Kong Science and Technology Parks (HKSTP)?
- The 14th Five-year Plan indicates clear support for Hong Kong’s development into an international I&T hub as well as taking forward the GBA development. A flagship project on this front is the Hong Kong-Shenzhen Innovation and Technology Park (HSITP) in Lok Ma Chau Loop (Loop), which will also perform as a major GBA co-operation platform.
- The HKSAR Government is taking forward the development of the HSITP in the Loop in full swing, with a view to establishing a key base for cooperation in scientific research through connecting with top-tier enterprises, R&D institutions and higher education institutions all over the world. Upon its full development, the HSITP will provide a gross floor area of 1.2 million square meters, which will be about three times the size of the current Hong Kong Science Park and become the largest ever I&T platform in Hong Kong.
- In February 2021, we obtained funding approval from the Legislative Council of Hong Kong to take forward Batch 1 Development of the HSITP. The Hong Kong-Shenzhen I&T Park Limited is pressing ahead with the relevant works projects, with the target to complete the eight buildings under Batch 1 in phases from 2024 to 2027.
- The HKSAR and Shenzhen governments are also jointly developing the Shenzhen-Hong Kong Innovation and Technology Co-operation Zone (the Co-operation Zone) which comprises the Shenzhen Innovation and Technology Zone (SZ I&T Zone) and the HSITP, with a view to establishing “one zone, two parks” under “One Country, Two Systems”. Adjacent to the SZ I&T Zone, the HSITP enjoys strategic advantages. By combining Hong Kong’s solid R&D strengths and Shenzhen’s strong capability in advanced manufacturing, the “one zone, two parks” idea will achieve a value-adding chain that covers the upstream, midstream and downstream processes and leverages the complementary advantages of both cities.
- The two governments have also agreed that before the completion of the first batch of buildings in the HSITP, the Hong Kong Science and Technology Parks Corporation (HKSTPC) will lease and manage certain areas of the SZ I&T Zone, so that the institutes and enterprises that are interested in starting their business in the GBA can first establish a presence in the SZ I&T Zone.
- The GBA provides a unique I&T system which supports a full spectrum of functions ranging from R&D, prototyping, certification, mass production to equity-raising. Equipped with world-class universities, strong R&D capabilities and an international financial market, Hong Kong is well placed to contribute to the I&T development in the GBA. Japanese companies are welcome to partner with Hong Kong to seize the opportunities in the vast Mainland market.
6. In Qianhai, since last August, Hong Kong companies registered can choose to select Hong Kong law for their business contracts and agreements. Will this also be applicable in other areas in the GBA in the near future with a view to developing Hong Kong as the centre for international legal and dispute resolution services in the Asia-Pacific Region?
- One of the roles of Hong Kong in the GBA development as stated in the “Outline Development Plan” is to establish itself as a centre for international legal and dispute resolution services in the Asia-Pacific Region. Hong Kong has a mature legal system which is familiar to the international business community, with arbitration and mediation services at the forefront of the sector.
- Moreover, our legal and dispute resolution professionals have rich international experience in various areas. Our unique strengths in legal and dispute resolution services will be useful in promoting the development of a multi-faceted dispute resolution mechanism and quality, effective and convenient judicial and legal services as well as safeguards in the GBA.
- The HKSAR Government has been striving to advocate for the implementation of innovative and forward looking legal-related suggestions in the GBA. Recently, with the strong support from the Central Government, there have been a few breakthroughs.
- For instance, the “Regulations of the Qianhai Shenzhen–Hong Kong Modern Service Industry Cooperation Zone of the Shenzhen Special Economic Zone” were amended and approved in August 2020 and implemented in October 2020. Article 57 of the regulations allows Hong Kong-, Macao-, Taiwan- and foreign-invested enterprises registered in Qianhai to agree on the choice of applicable law, including Hong Kong law, when they enter into civil and commercial contracts in the absence of “foreign-related elements”1.
- This pilot measure allows wholly-owned Hong Kong enterprises (WOKEs) registered in Qianhai, which amount to over 11 000, to enjoy a wider application of Hong Kong law when they enter into civil and commercial contracts. We are now actively seeking the support of the Central Government in extending the measure to Shenzhen and the entire GBA, as well as allowing WOKEs in the GBA to choose Hong Kong as the seat of arbitration in the absence of “foreign-related elements”.
1 In general, unless there is the presence of a “foreign-related element”, e.g. one of the parties is a foreign citizen, the applicable law of a contract shall be the Mainland law and arbitration of the relevant dispute shall only be conducted in the Mainland.
7. What are the visible advantages of establishing companies in Hong Kong? How “Hong Kong as a pro-business gateway to China” could benefit existing Japanese companies in Hong Kong, including those Japanese companies which aim to expand their business in Hong Kong?
- The HKSAR Government is committed to assisting Hong Kong businesses in accessing the Mainland market through the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA). The CEPA Agreement on Trade in Services, implemented since June 2016 and recently amended in 2020, has introduced extensive liberalisation measures in important sectors, such as financial services, legal services, construction and related engineering services, testing and certification, television, motion pictures, tourism services, etc.
- CEPA is nationality neutral. On trade in services, Japanese service providers are welcome to establish their businesses in Hong Kong, or join force with Hong Kong enterprises, to make use of CEPA to tap the GBA/Mainland market. Japanese companies in Hong Kong which have engaged in substantive business operation for 3 or 5 years2, have paid profit tax, have business premises and staff of Hong Kong residents, are eligible for the preferential treatment under CEPA.
- In addition to Mainland-wide ones under CEPA, there are liberalisation measures for pilot implementation in the Guangdong Province. These measures make it easier for Hong Kong service suppliers and professionals to set up enterprises and develop business in the Mainland. Some examples of liberalisation measures in professional service sectors are set out below –
- Accounting: The requirements for Hong Kong certified public accountants (CPA) who have obtained the Chinese CPA qualifications to become partners of partnership accounting firms in the Mainland have been granted national treatment. On this basis, the HKSAR Government will pursue with the Mainland authorities on measures for further facilitating Hong Kong CPAs to practise in the GBA.
- Insurance: The amendment agreement to the CEPA Agreement on Trade in Services has also further relaxed the threshold for Hong Kong insurance companies, insurance agency companies and insurance brokerage companies to access the Mainland market.
- Banking and Security Services: Under the CEPA framework, the Hong Kong Institute of Bankers (HKIB) and the China Banking Association (CBA) signed a collaboration agreement in 2015 for banking practitioners in the Mainland and Hong Kong to obtain mutually recognised professional qualifications through relevant examinations. The HKIB and CBA have also agreed to allow the Qualification Certificate of Banking Professional (QCBP) examination for Hong Kong talents to take place in Hong Kong. The Financial Services and the Treasury Bureau will continue to maintain close liaison with the relevant Mainland authorities with a view to expanding the room for participation of Hong Kong securities professionals in the Mainland.
- Legal Services: There have been a few breakthroughs recently enabling the Hong Kong legal sector to further capitalise on its advantages and enhance its competitiveness. They include the GBA Legal Professional Examination, the choice of applicable laws for civil and commercial contracts by wholly owned Hong Kong enterprises and foreign-invested enterprises set up in Qianhai, further liberalisation measures on partnership associations, and further liberalisation measure on legal consultant.
- Construction and Engineering Related Sectors: Hong Kong’s upcoming infrastructure projects in the areas of housing, reclamation, railway, rock cavern development would provide immense business opportunities for the sectors. As regards the GBA, the Department of Housing and Urban Rural Development (DHURD) of Guangdong Province promulgated the “Interim Guidelines for the Management of Hong Kong Engineering Construction Consultant Enterprises and Professionals Starting Business and Practising in the Guangdong-Hong Kong-Macao Greater Bay Area Cities” through its official website in late November 2020 for implementation from 1 January 2021. Consultant firms on the two HKSAR Government lists (i.e. the Architectural and Associated Consultants Selection Board and the Engineering and Associated Consultants Selection Board), as well as professionals registered with relevant registration boards in Hong Kong, can acquire corresponding qualifications in the Mainland by way of registration so that they can provide services in the Mainland cities of the GBA directly. There is also a new measure under which Hong Kong-based engineering contractors and consultants will be allowed to take part in the construction projects in Qianhai Special Economic Zone.
- Apart from trade in services, the Agreement on Trade in Goods under CEPA has also been implemented since 1 January 2019. The Agreement consolidates and updates the commitments on liberalisation and facilitation of trade in goods under CEPA, and further enhances the level of liberalisation for trade in goods under CEPA. Goods of Hong Kong origin imported into the Mainland can fully enjoy zero-tariff if the relevant rules of origin (ROOs) are met. Japanese investors are welcome to set up manufacturing operations in Hong Kong to produce goods meeting CEPA origin rules to enjoy the zero-tariff benefits.
- The Agreement on Trade in Goods of CEPA has also included a dedicated Chapter on “Trade Facilitation Measures in the Guangdong-Hong Kong-Macao Greater Bay Area”. The dedicated chapter specifies that the two sides agree to implement trade facilitation measures, including publishing periodically and further shortening the overall time for cargo customs clearance, in order to promote the convenient and efficient flow of goods in the GBA.
2 The number of year requirements (i.e. 3 or 5 years) depends on the service sectors which the companies belong to.
8. Will the Rule of Law and “One Country, Two Systems” principle be maintained in Hong Kong? Will freedom of the people and companies continue to be protected?
- “One Country, Two Systems” is the bedrock of Hong Kong’s stability and continued success. Under “One Country, Two Systems”, Hong Kong exercises a high degree of autonomy while preserving its own economic and social systems, and common law system.
- Under “One Country, Two Systems”,
- Hong Kong remains a global business and financial hub with more than 9000 overseas and Mainland companies operating in the city;
- Hong Kong residents continue to enjoy freedom of speech, assembly, procession, information, press and religious belief;
- Hong Kong’s legal system is separate from the legal system in Mainland China. The continuation of the common law system in Hong Kong is protected by the Basic Law. Hong Kong maintains its own laws, own courts, an independent judiciary and own legal professions.
- We understand that there have been concerns from the Japanese business community about the current situation of Hong Kong. Despite the prolonged social unrest in 2019, uncertainties due to geo-political tensions and China-US trade wars and severe disruptions to the economy caused by COVID-19 pandemic, Hong Kong’s fundamentals as a free, open and dynamic city with a stable and robust financial system remains intact. Hong Kong remains one of the safest cities to live and work since stability and law and order had been restored after the enactment of the National Security Law.
- We fully appreciate that the rule of law and judicial independence is crucial to public and business confidence - whether local or overseas. The rule of law is indeed a core value and the cornerstone of Hong Kong’s success, and judicial independence is the linchpin in upholding the rule of law. Hong Kong’s rule of law has a solid foundation: our mature legal system is renowned for being transparent, trustworthy and fair. The Department of Justice is in charge of criminal prosecution without any interference; our courts exercise judicial power independently without any interference; and a robust legal aid system is in place to ensure that all Hong Kong residents are equal before the law. These elements are protected under the Basic Law.