Economy

Macao gains greater market access to Chinese mainland

(Xinhua)
Updated: 2010-05-29 14:43

MACAO - With the inking of the seventh supplement to the existing Closer Economic Partnership Arrangement (CEPA) on Friday, companies and investors in Macao Special Administrative Region (SAR) can explore the mainland market with lower costs and higher efficiency.

Supplement VII to CEPA, signed here by officials of China's Ministry of Commerce and Macao SAR government, will come into effect next year. The new agreement mainly comprises measures concerning the facilitation of trade and investment and the liberalization of trade in services.

As for the trade in services, the new measures will see the mainland authorities ease the way for Macao investors and companies to run business in 11 mainland service sectors, such as health, construction, banking, audio and video production, tourism, entertainment, etc, by lowering the market access threshold. The number of these liberalized sectors has thus increased to 43.

On the trade and investment facilitation side, the new supplement adds education to the two sides existing nine trade and investment facilitation cooperation areas, while industry cooperation programs will also be expanded to five, including the cooperation of Chinese medicine, MICE (meetings, incentives, conventions and exhibitions), culture, environmental protection and advanced technology.

Requested by the Macao SAR government, the mainland authorities also agreed to adopt specific measures that will smooth the process of visa application for mainlanders who enter Macao SAR to participate MICE events held there. This is especially important to Macao as the SAR seeks to diversify its economy that heavily depends on gaming industry, and the MICE industry has long been deemed by the SAR government as a rising star under its diversification policy.

The implementation of CEPA has, in the past seven and eight years, seen the mainland authorities gradually open its market to Macao investors and companies based on the practical needs of Macao, said Tam Pak Yuen, the SAR's secretary for economy and finance, after the signing ceremony held at the SAR Government Headquarter.

He also said that the connection between the mainland market and the Macao market has become much stronger in the past years, as Macao products that comply with the origin criteria can now be exported into the mainland market with zero-tariff, and over 40 areas in the trade in services have been liberalized for Macao companies and investors.

Since the CEPA between Macao and the mainland came into effect in 2004, the mainland authorities have progressively expand its contents by signing a total of seven supplements respectively in each of the following years, phasing out market restrictions in various trade and service sectors for Macao investors and companies.

Thanks to the CEPA, Macao companies, especially the medium and small ones, have found an easier and less costly way to do business on the mainland.

Lo Seng Chung, a local businessman who owns a coffee processing factory in Macao, has started to import coffee beans in 2006 from countries in Africa and South America to Macao with zero-tariff since the SAR is a free port. He then brought his products into the mainland market, which was exempted from paying any tariff under the CEPA mechanism, after processing the beans into Macao- branded ground coffee.

"Because of CEPA, we made the investment," said Lo, whose company's coffee products have found their way into the supermarket shelves of several mainland big cities.

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He also said that his company and many other local small and medium enterprises even weathered the impact of the world financial crisis in 2008, as they could rely on their business in the vast mainland market with the help of CEPA.

According to the figures from the SAR government, Macao enterprises and residents have established over 700 companies and privately-owned small business on the mainland under the CEPA mechanism by the end of 2009, and the value of Macao's zero-tariff exports to the mainland has reached 127 million patacas ($16 million) by April this year since the implementation of CEPA in 2004.

"Basically the door to the mainland market has opened for Macao's enterprises and professionals", and the next step is to find out how to take full advantage of the opportunities created by CEPA, said Tam.