The Closer Economic Partnership Arrangement, implemented in Hong Kong after the SARS outbreak during 2003, has played a yeoman role in fostering Hong Kong-mainland integration over the past nine years.

According to government statistics, $4.96 billion worth of goods have been exported from Hong Kong to the mainland under the CEPA as of March this year, while imports from the mainland were around $5.15 billion.

There is no doubt that the CEPA has provided ample opportunities for Hong Kong and international businesses to gain greater access to the mainland markets. It has also accelerated the breadth and depth of the mainland's integration into the global economy following its accession to the World Trade Organization in 2001.

In addition to facilitating the flow of goods, the CEPA also accelerated people flow. Under the Individual Visit Scheme introduced in 2003, the number of mainland visitors to the city surged to 28 million in 2011. Though the influx of mainland tourists may have to some extent changed the cityscape of Hong Kong, it is undeniable that the scheme has given a boost to the local economy and created a lot of job opportunities.

In 2010, the central government issued 36 measures during Vice-Premier Li Keqiang's visit to Hong Kong to further open up the mainland's services sector. The newly signed Supplement VIII has brought the total number of liberalized service sectors under the CEPA to 47, involving a total of 301 liberalization measures. By April 2012, some 1,400 enterprises had been certified as Hong Kong Service Suppliers, with more than 2,500 certificates issued.

The services sector has rapidly expanded and become an important impetus for economic growth in Hong Kong during the past two decades. It now makes up 93 percent of the GDP and employs 88 percent of the working population.

In tandem with the 12th Five-Year Plan (2011-15), which aspires to record a 4 percent expansion of the service sector by 2015, Hong Kong can play a key role in enhancing the overall standard of the service industries on the mainland.

In this process, the creation of a favorable business environment to further facilitate the penetration of the Hong Kong services sector in the Pearl River Delta can bring benefits to both sides.

A study by the Bauhinia Foundation Research Center has put forth nine recommendations to eliminate the existing barriers through opening the remaining doors, facilitating communication and the flow of people and goods, as well as modifying the examination and tax systems. It has urged the Guangdong government to establish self-financed, market-driven institutional units in Qianhai, Hengqin and Nansha, on a pilot basis, to streamline the business registration process and provide Hong Kong enterprises with one-stop services.

The center has also recommended introducing policies to encourage businesses to include a clause in their commercial contracts specifying either mainland or Hong Kong as the designated place for judicial proceedings when contract-related disputes arise.

Under the proposed government structure of the new Chief Executive Leung Chun-ying, a new position of deputy financial secretary would be created to cope with matters relating to economic cooperation agreements signed with the mainland and the implementation of policies relevant to the national five-year plan. Hong Kong-mainland integration has topped the agenda of the new government. But more innovative measures at the policymaking level are also needed for building a world-class metropolis in the PRD.

The author is the chairman of Bauhinia Foundation Research Centre, a think tank in Hong Kong. The views expressed here are not necessarily those of China Daily.

(China Daily 07/01/2012 page8)