The Closer Economic Partnership Arrangement (CEPA) between the Chinese mainland and Macao is expected to boost foreign investment inflow to Macao, said Tam Pak Yuen, secretary for economy and finance of the Macao Special Administrative Region.
"Many foreign investors have visited Macao and studied how to benefit from the CEPA," Tam said.
He expected these proposed investments to flow in after the CEPA takes effect on January 1.
"Manufacturing industries, especially apparel, cosmetics and silver jewelry, will be hot destinations," Tam said.
Tam made the remarks at a press conference for the first meeting of a joint steering committee for Mainland-Macao CEPA implementation.
This high-powered body will be a permanent mechanism for Beijing and Macao to discuss and review regular cooperation issues.
An Min, vice-minister of commerce, said all preparations are going well and CEPA will start on January 1 as scheduled.
Three topics, including the trade of goods, trade of services and investment facilitation, were discussed in the first meeting.
CEPA is actually the same as free trade zones in granting zero tariffs but is regional economic cooperation between a national entity and independent tariff areas instead of two countries.
The central government has spent efforts in amending laws and regulations in conflict with CEPA agreements, An said.
The technical department at customs has completed its tentative work to upgrade the computers for the identification of products originating in Macao, An said.
Mainland customs is also working to connect its computer with Macao departments to share information about Macao products.
Some 311 Macao-made products will be exempt from tariffs when exported to the Chinese mainland.
This is different from the original 273 because of a modified system for identifying taxable items. The zero-tariff privilege will be extended to all goods made in Macao by January 2006.
The mainland imported US$150 million from Macao and exported US$1 billion to the region in the first 10 months of this year, according to mainland customs statistics.
The mainland imported US$142 million and exported US$876 million last year.
The mainland-Macao CEPA was signed on October 17 this year after the mainland-Hong Kong one on June 29.
The mainland-Macao CEPA shares the same principles as the Hong Kong agreement and fully reflects the features of Macao's economy with some minor differences in content.
(China Daily December 30, 2003)