CEPA : Benefits for Manufacturing Companies

The Closer Economic Partnership Arrangement (CEPA), the first free trade agreement for both Mainland and Hong Kong, provides opportunities for manufacturing industries to export products into Mainland China duty free. Importation of goods - as a raw material or semi-finished - into the free port of Hong Kong does not incur duties and if value can then be added to the product to ensure a Hong Kong Certificate of Origin - the finished or semi-finished product can then be shipped to Mainland China duty free.

The Trade in Goods element of CEPA covers 1 510 product codes. Since its inception on 1 January 2004, there has been more than 38 000 CO(CEPA) applications, and goods with a total export value exceeding HK$ 10 billion have benefited from the scheme. Examples include:

Food, beverage and primary products- tariff savings of up to 40%. Mainland consumers have great confidence in Hong Kong labelled products and are ready to pay more for edible products. Therefore in many cases, Hong Kong-made food, beverage and primary products can command a higher premium than locally made products in Mainland China.

Industrial products, autoparts and accessories systems - tariff saving up to 30%. International companies can import raw and semi-finished materials into Hong Kong, then produce the products or parts in Hong Kong and export them into Mainland tariff-free under CEPA. This is particularly attractive if a product has a high IP component which can be protected under Hong Kong's rigorously enforced intellectual property laws.

Furniture - tariff savings up to 7.3%. Hong Kong furniture is known for its world-class design and quality which allows products to be sold at a premium in the Mainland consumer market.

Invest Hong Kong is ready to help overseas and Mainland companies to establish operations in Hong Kong to tap the benefits of CEPA. Please talk to us about your vision.