Preface

 

The signature and the implementation of “The Mainland Macao Closer Economic Partnership Arrangement” (CEPA), marks a new stage in the Mainland and Macao’s trade exchange and economic co-operation and also provides opportunities for local and regional enterprises to develop businesses and markets. In this issue we shall combine the contents of CEPA’s first and second phases, present the related market information, to provide investors with a reference on how to grasp CEPA’s opportunities.

 

INTRODUCTION OF CEPA AND SUPPLEMENTARY PROTOCOL
* CEPA is a free trade agreement -like arrangement which comes under the umbrella of two separate customs territories of a single sovereign state which came into force on 1 January 2004.
* CEPA mainly covers three categories: trade in goods; trade in services; trade and investment facilitation
* On 29 October 2004, Mainland China and the Macao SAR signed a supplementary agreement to CEPA to further liberalise trade in goods and trade in services from 1 January 2005
* The Mainland agreed to apply zero tariffs to the second batch of 190 goods (Mainland 2004 tariff codes) of Macao origin from 1 January 2005. Together with the first batch of 311 goods, a total of 501 types of good originating in Macao benefit from zero tariffs.
* First phase of CEPA – The Mainland has given preferential treatment to 18 service sectors in Macao to access China, the second phase has widened the liberalisation of 11 of the existing services and added 8 more service sectors.

CEPA 3 CATEGORIES: TRADE IN GOODS, TRADE IN SERVICES, TRADE AND INVESTMENT FACILITATION
Trade in Goods – Mainland applies zero tariffs to 501 goods items:

Goods categories include: Food and beverages, chemical products, pharmaceutical products, cosmetics, plastic articles, paper articles, textile and clothing, jewellery, electrical and electronic products, optical apparatus, clocks, watches and musical instruments, building stone and articles of stone, metal products among others

Trade in Services – Mainland confers preferential treatment for market access to 26 sectors of Macao service providers:

Legal, accounting, architectural, medical and dental, real estate, advertising, management consulting, convention and exhibition, value-added telecommunication, audiovisual, construction and related engineering, distribution, insurance, banking, securities, tourism, transport, logistic, airport management, information technology, professional and technicians qualification examinations, cultural entertainment, trademark agency, patent agency, job referral agency, job intermediary

– Both sides strengthen mutual co-operation in finance, tourism and encourage recognition in specialist qualifications

Trade and Investment Facilitation – Both sides develop trade and investment co-operation in 7 areas:

Trade and investment promotion; customs clearance facilitation; commodity inspection, inspection and quarantine of animals and plants, food safety, sanitary and inspection, certification, accreditation and standardisation management; electronic business; transparency in laws and regulations; cooperation between small and medium-sized enterprises; industrial co-operation

Recent developments

Trade in Goods: CEPA has strengthened Macao' s product competitiveness in the Mainland market and greatly widened business developing opportunities. Since its implementation, many categories of products originating in Macao have enjoyed tariff free treatment on importation to the Mainland, including: cement, busways, textile and clothing products, rewritable CDs, plastic bags as well as confectionary. The Supplementary Protocol further enlarged the list of products eligible for zero customs duty and the value of CEPA exports recorded noticeable rises this year. According to Guangzhou Customs statistics’, the value of CEPA goods exported to the Mainland through Guangdong Port in the first quarter of 2005 amounted to USD 363,000 and reduced the customs duty by RMB 276,000, recording 900% and 1280% growth when compared to same period last year.

Macao's CEPA origin products accelerated access to Mainland markets has demonstrated the development potentials and has also reflected the fact that enterprises have entered a new stage of development and grasp the related procedures and established customer networks. In addition, the newly added 190 items are mostly textile and clothing products, including: clothes, gloves and other clothing accessories made of leather or of composition leathear; wool; yarn (silk, wool, flax yarn, ramie yarn, nylon); overcoats or wind-cheaters, suits, ensembles, jackets and blazers, trousers, skirts, downs and the most preferential rate for these goods imported to the Mainland last year ranged from 5% to 38%. As garment processing being main sector of Macao manufacturing industries, it provides great potential for development and is eyed by local entrepreneurs.

Trade in Services: CEPA has provided Macao's service sector with exceptional opportunities for developing the Mainland market. Currently, a number of enterprises from various sectors (namely: freight forwarding agency, logistics, warehousing, transportation, distribution, conference and exhibition, telecommunication and advertising) have already obtained the "Certificate of Macao Service Supplier" issued by Macao Economic Services and have set up operations under CEPA on the Mainland. Moreover, under CEPA's framework Macao's medical and legal professionals are eligible to take the qualification examinations on the Mainland and up to the end of 2004, 1202 individually owned stores have already registered in Guangdong Province from Macao's businessmen under CEPA.

Furthermore, the exhibition and convention sector which has been developing rapidly in Macao in recent years, has been active in developing the Mainland market under CEPA while a exhibition company has already cracked to Beijing as a sole proprietor. Also, some conference and exhibition service suppliers that have obtained the "Certificate of Macao Service Supplier" stated that through Macao's international networks they could join foreign investors in setting up operations on the Mainland in searching for exhibitors for Macao's fairs and for a training and market development network base.

Trade and investment facilitation: In line with the liberalisation of trade in goods and trade in service, the Mainland and Macao have developed trade and investment facilitation in 7 areas. Under this framework, both sides have signed the "Arrangement of Co-operation in Customs between the General Administration of Customs and Macao Customs Service, "Arrangement of Co-operation in Inspection, Quarantine and Food Safety" and "Arrangement of Co-operation in Product Safety and Origin" and have established 7 trade and investment facilitation working groups composed of related departments from both sides cementing the co-operation.

For promoting CEPA, Macao Trade and Investment Promotion Institute hosted a series of promotional activities in various Mainland cities/provinces as well as overseas, jointly organised with relevant organisations large-scale activities like "Promotion Week for CEPA on the Mainland, Hong Kong and Macao" in Beijing, Shanghai and Guangzhou, "Promotional Activities for the Economic Co-operation Between Chongqing and Macao under CEPA" and "Promotional Activities for the Economic Co- operation Between Sichuan and Macao under CEPA" and one of the themes of the 9th MIF held last October was "Seizing Unprecedented Business Opportunities with CEPA". IPIM has signed with many Mainland cities and provinces trade promotion organisations co-operation agreements under the CEPA framework to further increase all sides trade and investment co-operation to better support and assist enterprises to explore business opportunities.

This article was prepared by IPIM’s Research and Information Division.

Source: 1 Macao Daily, 14 April 2005
Source: 2 Guangdong Economic and Trade Commission, 25 JAN 2005 data

The Macao SAR Government set up the 'CEPA Information Centre' in Macao Trade and Investment Promotion Institute's, Macao Business Support Centre's offices. The CEPA Information Centre provides a number of information services for the public, including: enquiry service for CEPA, especially in the affairs of trade in goods, trade in service and trade and investment facilitation; CEPA related materials and application forms and handling of the "Certificate of Macao Service Suppliers" application

Address: Alameda Dr. Carlos d´ Assumpção no. 263,
Edif. China Civil Plaza, 20th floor,
(Macao Business Support Centre)
Macao
Tel: (853) 87989 708
Fax: (853) 755 011
Email: info@economia.gov.mo
Homepage: www.economia.gov.mo