Hong Kong could become China's services hub in the light of the Closer Economic Arrangement Partnership (CEPA) scheme and cooperation among the pan-Pearl River Delta cities, Financial Secretary Henry Tang said yesterday.

The SAR government will adopt measures in this regard to help Hong Kong businessmen to settle commercial disputes through various economic and trade offices on the mainland, including two new offices to be set up in Shanghai and Chengdu later this year.

Replying to a question on ways to help Hong Kong professional services to gain a berth on the mainland market at the Legislative Council meeting yesterday, Tang highlighted the increasing need for professional services on the mainland in the wake of growing liberalization of the mainland market.

Hong Kong is the only city named in the nation's 11th Five-Year Plan (2006-10) as an international financial, trade and shipping hub, Tang said. Finance, insurance, information, legal and logistics services are all Hong Kong's strengths.

In terms of measures to facilitate coordinated development of Hong Kong and mainland province/ cities before the economic summit is held in September, there are mechanisms including high-level exchanges between Hong Kong and Guangdong Provinces, the pan-PRD region, Shanghai and Beijing, providing a solid foundation for sustainable cooperation between Hong Kong and the mainland.

In response to the Qualified Domestic Institutional Investors scheme (QDII), Tang said the Hong Kong Monetary Authority and the Treasury Markets Association had run seminars for industry participants to exchange views on opportunities.

Through the CEPA scheme, the SAR government has held 27 service sectors to gain preferential market access to the mainland and also attained mutual recognition arrangements for a number of professional sectors.

However, tourism constituency legislator Howard Young said that Hong Kong-funded travel agencies were only allowed to run inbound travel service to mainland cities, but what they wanted was to run outbound services for mainland citizens to go to the rest of the world.

Tang replied that they had brought up the issue with the central government but one had to realize the pace and extent of the opening up process. He, however, pledged that he would continue negotiations on the issue.

Editor: Yan