 WORLD TRADE  
ORGANIZATION  WT/REG162/1 
20 January 2004  
 
(04-0171) 
Committee on Regional Trade Agreements Original:   English 
   
CLOSER ECONOMIC PARTNERSHIP ARRANGEMENT 
BETWEEN CHINA AND HONG KONG, CHINA
* 
  
 The following text is being circulated at th e request of the Delegations of the People's 
Republic of China and of Hong Kong, China. 
 
_______________ 
 
MAINLAND AND HONG KONG CLOSER ECONOMIC PARTNERSHIP ARRANGEMENT
 
 
PREAMBLE  
   To promote the joint economic prospe rity and development of the Mainland
1  and the Hong 
Kong Special Administrative Region (hereinafter refe rred to as the "two sides"), to facilitate the 
further development of economic links between the two sides and other countries and regions, the two 
sides decided to sign the Mainland and Hong K ong Closer Economic Partnership Arrangement 
(hereinafter referred to as the "CEPA").   
CHAPTER 1 : GENERAL PRINCIPLES 
 
Article 1 
 
Objectives
 
  To strengthen trade and investment coopera tion between the Mainland and the Hong Kong 
Special Administrative Region (hereinafter referred to as "Hong Kong") and promote joint 
development of the two sides, through the implementation of the following measures : 
 
1. progressively reducing or eliminating tariff and non-tariff barriers on substantially all 
the trade in goods between the two sides; 
2. progressively achieving liberalization of trade in services through reduction or 
elimination of substantially all discriminatory measures; 
3. promoting trade and investment facilitation. 
 
                                                     
 
* The Annexes of the Arrangement have been submitted to the Secretariat for consultation by interested 
Members (office 1174). 
1 In the "CEPA", the "mainland" refers to the entire customs territory of China. WT/REG162/1 
Page 2  
 
Article 2 
 
Principles
 
  The conclusion, implementation and amendment of the "CEPA" shall adhere to the following 
principles : 
 
1. to abide by the "one country, two systems" principle; 
2. to be consistent with the rules of the Wo rld Trade Organisation (hereinafter referred 
to as the "WTO"); 
3. to accord with the needs of both sides to  adjust and upgrade their industries and 
enterprises and to promote steady and sustained development; 
4. to achieve reciprocity and mutual bene fits, complementarity with each other’s 
advantages and joint prosperity; 
5. to take progressive action, d ealing with the easier subjects before the more difficult 
ones. 
Article 3 
 
Inception And Development
 
 1. From 1 January 2004, the two sides will start to implement the specific commitments in 
liberalization of trade in goods and services under the "CEPA". 
2. The two sides will broaden and enrich the c ontent of the "CEPA" through continuous and 
further reciprocal liberalization between them. 
Article 4 
 
Non-Application Of Specific Provisions In  China's WTO Accession Legal Documents
 
  The two sides recognise that through over 20 years of reform and opening up, the market economy system of the Mainland has been continuously improving, and the mode of production and operation of Mainland enterprises is in line with the requirements of a market economy.  The two 
sides agree that Articles 15 and 16 of the "Proto col on the Accession of the People's Republic of 
China to the WTO" and paragraph 242 of the "R eport of the Working Party on the Accession of 
China" will not be applicable to tr ade between the Mainland and Hong Kong. 
  
CHAPTER 2 : TRADE IN GOODS 
 
Article 5 
 
Tariffs
 
 1. Hong Kong will continue to apply zero tariff to all imported goods of Mainland origin. 
2. From 1 January 2004, the Mainland will apply zero tariff to the import of those goods of 
Hong Kong origin listed in Table 1 of Annex 1.  WT/REG162/1 
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3. No later than 1 January 2006, the Mainland will apply zero tariff to the import of goods of 
Hong Kong origin that are outside Table 1 of A nnex 1. Detailed implemen tation procedures are set 
out in Annex 1. 
4. Any new goods that are subject to elimination of  import tariffs in accordance with paragraph 
3 of this Article shall be added to Annex 1. 
Article 6 
 
Tariff Rate Quota And Non-Tariff Measures  
 1. Neither side shall apply non-tariff measures in consistent with WTO rules to goods imported 
and originated from the other side. 
2. The Mainland will not apply tariff rate quota to goods of Hong Kong origin. 
Article 7 
 
Anti-Dumping Measures
 
 
 The two sides undertake that neither si de will apply anti-dumping measures to goods 
imported and originated from the other side.  
Article 8 
 
Subsidies And Countervailing Measures
 
  The two sides reiterate their observance of the WTO "Agreement on Subsidies and Countervailing Measures" and Article XVI of "the General Agreement on Tari ffs  and Trade  1994", 
and undertake not to apply countervailing measures to  goods imported and originated from each other. 
 
Article 9 
 
Safeguards
 
  If the implementation of the "CEPA" causes sharp increase in the import of a product 
included in Annex 1 originating from the other side which has caused or threatened to cause serious 
injury to the affected side’s domestic industry that produces like or directly competitive products, the 
affected side may, after giving written notice, te mporarily suspend the concessions on the import of 
the concerned product from the other side, and sha ll, at the request of the other side, promptly 
commence consultations under Article 19 of the "CEPA" in order to reach an agreement. 
 
 
CHAPTER 3 : ORIGIN 
 
Article 10 
 
Rules Of Origin
 
 1. The rules of origin applicable to preferentia l measures related to trade in goods under the 
"CEPA" are set out in Annex 2. 
2. To ensure the implementation of the preferen tial measures in respect of trade in goods, the 
two sides decide to strengthen and extend the cont ent and scope of mutual administrative assistance WT/REG162/1 
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including the establishment and strict implementa tion of the procedures for issuing certificates of 
origin, the establishment of auditing and regulatory mechanisms, the development of a computer link 
and electronic data interchange be tween the issuing and regulatory authorities of both sides.  Details 
are set out in Annex 3. 
 
CHAPTER 4 : TRADE IN SERVICES 
 
Article 11 
 
Market Access
 
 
1. Either side will progressively reduce or eliminate existing restrictive measures against 
services and service suppliers of the other side in ac cordance with the content and timetable set out in 
Annex 4. 
2. At the request of either side, the two sides may, through consultation, pursue further 
liberalization of trade in services between them. 
3. Any new measures on liberalization of trade in services implemented pursuant to paragraph 2 
of this Article shall be added to Annex 4. 
Article 12 
 
Service Suppliers  
 
1. The definition and related provisions on "ser vice suppliers" under the "CEPA" are set out in 
Annex 5. 
2. Service suppliers of other WTO Members that are juridical persons established under the laws 
of one side will be entitled to preferential treat ments granted by the other side under the "CEPA", 
provided that they are engaged in substantive busin ess operations as stipulated in Annex 5 in the area 
of the former side. 
Article 13 
 
Financial Cooperation  
 
 The two sides shall adopt the following measu res to further strengthen cooperation in the 
areas of banking, securities and insurance :  
1. The Mainland supports wholly state-owned co mmercial banks and certain joint-equity 
commercial banks in re-locating their inte rnational treasury and foreign exchange 
trading centres to Hong Kong. 
2. The Mainland supports its banks in deve loping network and business activities in 
Hong Kong through acquisition. 
3. The Mainland supports the full utilization of financial intermediaries in Hong Kong 
during the process of reform, restructuring an d development of the financial sector in 
the Mainland. 
4. The two sides shall strengthen cooperation and information sharing between their 
financial regulators.  WT/REG162/1 
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5. The Mainland shall, in line with the pr inciples of observing market rules and 
enhancing regulatory efficiency, support e ligible Mainland insurance companies and 
other companies, including private enterprises, in listing in Hong Kong. 
Article 14 
 
Cooperation In Tourism  
 1. In order to further promote the development of the tourism industry of Hong Kong, the 
Mainland will allow residents in Guangdong Province to visit Hong Kong individually.  This measure 
will be implemented on a trial basis first in D ongguan, Zhongshan and Ji angmen and it will be 
extended to the entire Guangdong Province no later than 1 July 2004. 
2. The two sides shall strengthen cooperation in tourism promotion, including promotion of 
tourism between each other and development of external promotion programmes centered around the 
Pearl River Delta. 
3. The two sides shall cooperate to raise the servi ce standards of their tourism industries and 
protect the legitimate rights and interests of tourists. 
Article 15 
 
Mutual Recognition Of Professional Qualifications
 
 1. The two sides shall encourage mutual recogn ition of professional qualif ications and promote 
the exchange of professional talents between each other. 
2. Competent authorities and professional bodies of both sides will, in consultation with each 
other, consider and design specific methodologies for mutual recognition of professional qualifications. 
 
CHAPTER 5 : TRADE AND INVESTMENT FACILITATION 
 
Article 16 
 
Measures
 
 
 The two sides shall promote trade and investment facilitation through greater transparency, 
standard conformity and enhanced information exchange.  
Article 17 
 
Areas Of Cooperation
 
 1. The two sides will promote cooperation in the following areas : 
 1. trade and investment promotion; 
  2. customs clearance facilitation; 
 
 3. commodity inspection and quarantine, food safety and quality and standardization;    4. electronic business; WT/REG162/1 
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 5. transparency in laws and regulations;   6. cooperation of small and medium enterprises;  
  7. cooperation in Chinese traditional medicine and medical products sector. 
 
2. Details on the areas of cooperation lis ted in paragraph 1 of this Ar ticle are set out in Annex 6. 
3. At the request of either side, the two sides may expand the scope and content of trade and 
investment facilitation through consultation. 
4. Any new scope or content concluded under para graph 3 of this Article shall be added to 
Annex 6. 
 
CHAPTER 6 : OTHER PROVISIONS 
 
Article 18 
 
Exceptions
 
  The "CEPA" and provisions in its Annexes sha ll not affect the ability of the Mainland or 
Hong Kong to maintain or adopt exception meas ures consistent with the rules of the WTO. 
 
Article 19 
 
Institutional Arrangements
 
 1. The two sides shall set up a Joint Steering Comm ittee (hereinafter referred to as "Steering 
Committee"), which will comprise senior representati ves or officials designated by the two sides. 
2. Liaison Offices shall be set up under the Steeri ng Committee.  Working groups may be set up 
as the need arises.  The Liaison offices shall be set up respectively in the Ministry of Commerce of the 
Central People's Government and the Commerce, I ndustry and Technology Bureau of the Hong Kong 
Special Administrative Region Government. 
3. The functions of the Steering Committee include : 
 (1) supervising the implementation of the "CEPA"; 
  (2) interpreting the provisions of the "CEPA";   (3) resolving disputes that may arise during the implementation of the "CEPA"; 
 
 (4) drafting additions and amendments to the content of the "CEPA";   (5) providing steer on the work of the working groups;   (6) dealing with any other business relating to the implementation of the "CEPA". 
 
4. The Steering Committee shall meet at least once a year, and may convene special meetings 
within 30 days upon request by either side.  WT/REG162/1 
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5. The two sides shall resolve any problems arisi ng from the interpretation or implementation of 
the "CEPA" through consultation in the spirit of friendship and cooperation.  The Steering Committee 
shall make its decisions by consensus. 
Article 20 
 
Miscellaneous  
 1. Except as otherwise provided in the "CEPA", any action taken under it shall not affect or 
nullify the rights and obligations of either side under other existing agreements to which it is a 
contracting party. 
2. The two sides shall endeavour to refrain from increasing restrictive measures affecting the 
implementation of the "CEPA". 
Article 21 
 
Annexes
 
 
 The Annexes to the "CEPA" form an integral part of the "CEPA".  
Article 22 
 
Amendments
 
 
 The provisions of the "CEPA" or its Annexes may be amended in writing when the need arises.  Any amendment shall come into effect after it has been signed by the duly authorised 
representatives of the two sides.  
Article 23 
 
Coming Into Effect
 
  The "CEPA" shall come into effect on the day of signature by the representatives of the two sides. 
 
 Signed in duplicate in Hong Kong, this 29t h day of June, 2003 in the Chinese language. 
   Vice Minister of Commerce Financial Secretary 
 People's Republic of China Hong Kong Special Administrative Region
  of the People’s Republic of China   
__________ 
  