CEPA: a milestone in the economic integration between Hong Kong and Mainland China

Abstract

Since 1979, when Mainland China began to open up its economy, a process of economic integration has been going on between Hong Kong and Mainland China. The return of Hong Kong to Mainland China in 1997 speeded up the integration process. China's entry into the World Trade Organization (WTO) at the end of 2001 further intensified the integration process. In June 2003, CEPA (Closer Economic Participation Arrangement) was signed between Mainland China and Hong Kong, which set a further important milestone in the economic integration between them. In June 2004, the concept of regional economic integration was inaugurated in the Pan-Pearl River Delta Regional Cooperation and Development Forum. This article attempts to review the economic integration process after the signing of CEPA. Issues related to the implementation of CEPA are also examined and discussed. It is hoped that both the Hong Kong business sector and potential foreign investors can have a comprehensive picture of CEPA so that they can design appropriate actions to benefit most from CEPA.