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Hong Kong, Guangdong Agree Cooperation Agenda

by Mary Swire, Lowtax.net, Hong Kong
13 March, 2014

The 19th Working Meeting of the Hong Kong-Guangdong Co-operation Joint Conference was recently held in Hong Kong, in anticipation that the Pearl River Delta region will become the second Chinese mainland free trade zone (FTZ) to be approved, following on from Shanghai last year.

The FTZ would be situated in the Delta's three main areas – the province of Guangdong, and the special administrative regions of Hong Kong and Macau. In particular, the implication of developments in the Qianhai special economic zone in Shenzhen, as well as those at Nansha and Hengqin, has attained substantial significance for Hong Kong.

In fact, the 2013 Work Plan of the Framework Agreement on Hong Kong/Guangdong Co-operation had already agreed on the key directions for co-operation in 2014, which will include promoting cutting barriers to services between Hong Kong and Guangdong, strengthening co-operation in finance and professional services, and promoting the development of Nansha, Hengqin, and Qianhai.

At the latest Working Meeting on the morning of March 10, 2014, the two sides signed the detailed 2014 Work Plan developed on the basis of the above-mentioned objectives, and discussed an implementation strategy.

In respect of individual areas of co-operation, the Chinese Government had decided in its 12th Five-Year Plan period that trade in services would be liberalized between the Mainland and Hong Kong by 2015, and Guangdong province then subsequently announced that it would endeavor to achieve that objective one year earlier, in 2014. The Hong Kong business sector is therefore looking forward to obtaining easier access to the Guangdong market in respect of a broad range of services this year.

With regard to financial co-operation, the two sides agreed to focus on: seeking permission for Mainland individual investors to invest directly in overseas markets; introducing cross-border RMB remittance services for individuals; and obtaining support from the Chinese Government for lowering the thresholds that restrict some Hong Kong property insurance companies from entering the Guangdong market.

In addition, Guangdong is formulating the relevant implementation details for the pilot measures agreed by China that granted approval for the province to allow Mainland and Hong Kong law firms to set up partnerships; and to permit Guangdong law firms to second Mainland lawyers to work as consultants on Mainland law in representative offices set up by Hong Kong law firms.

With regards to developments in Qianhai, Nansha, and Hengqin, Hong Kong hopes to aid those Hong Kong business sectors that want to take advantage of the business opportunities arising in the three places.

In respect of Nansha, the two sides will step-up co-operation in financial and accounting services, including permission for enterprises and financial institutions in Guangzhou to issue RMB bonds in Hong Kong to support its development, and allow Hong Kong accounting professionals to become partners of accounting firms. For Hengqin, the two sides will enhance support for industries, associations, and agencies from Hong Kong and Guangdong to set up branch offices there.

In respect of Qianhai, the two sides will focus efforts on implementation of the policy to allow Hong Kong professionals to provide engineering consulting, design, surveying, construction, and related services, directly in Qianhai.

Finally, this year, Hong Kong and Guangdong will continue to encourage Guangdong enterprises to establish a foothold in Hong Kong to speed up the "go global" process, and leverage Hong Kong's advantages in the financial and information sectors, to pursue investment as well as merger and acquisition activities in overseas markets.

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