Hong Kong said Tuesday it had reached an agreement with the Central Government to expand zero-tariff treatment for Hong Kong-made goods exported to the mainland to 1,369 products, up 261 from their previous agreements.

It also said 10 service areas in mainland would be liberalized for Hong Kong businesses.

Timepieces are among the items granted zero-tariff treatment in the third phase of the Closer Economic Partnership Arrangement, known as CEPA III.

Under CEPA, the mainland has waived import tariffs on some Hong Kong goods and granted Hong Kong-based companies greater access to its domestic markets.

The first CEPA deal was signed in 2003. A follow-up agreement in August 2004 expanded the number of goods granted zero-tariff treatment, including textiles and clothing, food and beverages, and pharmaceutical products.

The latest liberalization measures and expansion of products given zero-tariff treatment will take effect Jan. 1.

On the services side, Hong Kong said 23 liberalization measures in 10 sectors would be undertaken.

The 10 sectors include legal, accounting, audiovisual, construction, distribution, banking, securities, tourism, transport and independent stores.

Details of the measures were not immediately available, but the Hong Kong government said as an example of the liberalization measures, the minimum turnover a travel agency must have to set up a branch on the mainland has been lowered.

Hong Kong Financial Secretary Henry Tang said Tuesday that about 29,000 new jobs have been created in Hong Kong since the first liberalization measures were implemented.

Earlier Tuesday, Tang signed the CEPA III agreement with Chinese Vice Minister of Commerce Liao Xiaoqi.

"These additional measures will offer new business opportunities on the mainland for Hong Kong enterprises and professionals and enhance Hong Kong's attractiveness to overseas investors," Tang said.

Very little manufacturing is now done in Hong Kong, with most of its factories having shifted to cheaper locations on the mainland. But there are still some types of products that undergo enough processing locally to qualify for the zero-tariff treatment.
When CEPA was announced in June 2003 it was described as a work in progress, and government officials have said they would work to add new provisions to the free-trade deal over time.

Editor: Yan