Chen Guanghan believes that the average tariff level between the mainland and Hong Kong is currently maintained at around 10%. After zero tariff, the competitiveness of Hong Kong products in the Mainland can be greatly improved. However, the manufacturing industry only accounts for 5.2% of Hong Kong's GDP, and zero tariffs will not have much impact on the foreign trade of the two places. Judging from the amount of goods imported from the mainland in previous years, Hong Kong products mainly benefited from clothing, watches, medicines, jewelry, textiles, toys, precious ornaments and glasses.
Regarding the statement that "zero tariff may promote the return of Guangdong and Hong Kong capital to Hong Kong and realize Hong Kong's" re-industrialization ",Chen Guanghan said that the rent and labor costs of local factories in Hong Kong are still higher than those in the Mainland. Originally, Hong Kong's capital in the Mainland was mainly labor-intensive enterprises, so it is unlikely that a large number of factories will return. Only some high value-added production links such as watches and precious jewelry may move back to Hong Kong, and Hong Kong's "re-industrialization" still needs long-term consideration. However, CEPA can already serve as a signal for Hong Kong to attract foreign high-tech enterprises. It is suggested that Hong Kong develop high-tech industries and realize industrial upgrading, instead of counting on the relocation of labor-intensive industries in Guangdong.
In addition, zero tariff may change the old model of "front shop and back factory" in Hong Kong. Chen Guanghan said that in the past, Hong Kong's product market was global, with "shops" located in Hong Kong and "factories" located in the mainland. Now Hong Kong brands want to expand the mainland market, and Hong Kong businessmen can set up "stores" in the mainland. He analyzed that considering the cost such as distance, it is the most economical for Hong Kong businessmen to set up "stores" in Guangzhou. Guangzhou needs to do a good job of radiating to the mainland if it wants to welcome Hong Kong shops going north and truly become a bridge between Hong Kong and the mainland.
Similarly, CEPA has gradually eliminated the obstacles for mainland enterprises to enter Hong Kong. Mainland enterprises, especially manufacturing enterprises in the Pearl River Delta, can set up companies in Hong Kong, and make use of Hong Kong's role as an economic center to drive the Pearl River Delta and mainland manufacturing industries to radiate to the international market and enhance the international competitiveness of the Greater Pearl River Delta.
Regarding the early opening of mainland service trade to Hong Kong, Chen Guanghan believes that according to China's WTO accession commitment, the service industry will be opened in stages. The service industry, which accounts for 87% of Hong Kong's GDP, is dominated by small and medium-sized enterprises, which have little competitive advantage compared with foreign countries. Now, according to CEPA, we can seize the opportunity. But he also reminded the Hong Kong SAR Government to treat this issue dialectically. The interests of investors in the mainland are often inconsistent with the overall interests of Hong Kong. Once the export of services to the mainland is mature, Hong Kong's service industry will flow out in large quantities, and we should be careful to repeat the mistake of hollowing out the manufacturing industry in those years. The key to solve this problem is that openness must be interactive.
Specifically, Hong Kong's service industry flows into the mainland, and the mainland should also have corresponding large institutions or enterprises to settle in Hong Kong. This is also an opportunity that mainland enterprises should seize. He said that for the mainland, although various service industries will be impacted by Hong Kong businessmen, mainland enterprises should not exaggerate their influence. It should be noted that there is great room for the development of the service industry in the Mainland. Hong Kong's service industry will bring advanced business ideas and service methods to the mainland, improve the quality of life in the mainland, and work with mainland enterprises to make the "cake" bigger.
In short, from the perspective of long-term strategic development, CEPA has accelerated the process of economic integration in the Greater Pearl River Delta and taken the first step of economic integration. However, Hong Kong's integration into the mainland market should not and will not reduce its internationalization. In the final analysis, CEPA is to accelerate the flow of people, goods and capital between the two places. In the future, Hong Kong can make a difference in financial infrastructure, stock market and bond market.
Chen Guanghan particularly emphasized that CEPA is only a big framework agreement reached between the mainland and Hong Kong, and it is only the first step of economic and trade cooperation between the two sides. In the future, a package of business plans is needed to implement the specific content under this framework. Strengthening the transparency of laws and regulations, simplifying goods declaration procedures, strengthening communication between service authorities, establishing a dispute mediation mechanism, and discussing economic and technological cooperation in information, finance and logistics, especially the substantive economic and technological cooperation in the Pearl River Delta, all require CEPA to conduct pragmatic consultations.