Posted in: Press Releases

April 7th, 2010

The Chief Executive of the Hong Kong Special Administrative Region, Mr Donald Tsang, and the Governor of Guangdong Province, Mr Huang Huahua, representing the Hong Kong Special Administrative Region (HKSAR) Government and the Guangdong Provincial Government, signed the Framework Agreement on Hong Kong/Guangdong Co-operation at a signing ceremony in the Great Hall of the People in Beijing, witnessed by the State Vice-President, Mr Xi Jinping; the State Councillor, Madam Liu Yandong, and the Vice Chairman of the National Committee of the Chinese People’s Political Consultative Conference and Director of Hong Kong Macao Affairs Office of the State Council, Mr Liao Hui today (April 7). Before the signing ceremony, the three state leaders also met the Chief Executive, Mr Donald Tsang, and the Governor of Guangdong Province, Mr Huang Huahua.

The Framework Agreement, which builds on years of close co-operation between Hong Kong and Guangdong, is the fruit of rapport and consensus created by the exchanges between the two places over the years. It is also a significant embodiment of the principle of “One Country, Two Systems”, bringing Hong Kong/Guangdong co-operation to new heights.

The National Development and Reform Commission (NDRC) promulgated in January 2009 the “Outline of the Plan for the Reform and Development of the Pearl River Delta (PRD)”, specifying Hong Kong/Guangdong co-operation as a national policy. In March 2009, the Chief Executive and the Party Secretary of Guangdong Province, Mr Wang Yang, reached consensus on deepening Hong Kong/Guangdong co-operation. One of the important tasks was the joint formulation of the Framework Agreement.

In the past year, Hong Kong and Guangdong have been actively formulating the Framework Agreement. The HKSAR Government and the Guangdong Provincial Government have held many discussions on the draft document. Views have also been sought from the relevant central ministries. During the process, we have also taken into account suggestions from various sectors on the deepening of Hong Kong/Guangdong co-operation and the implementation of the Outline, including the motion carried by the Legislative Council on the implementation of the Outline in March 2009 and the results of the study report published by the Greater Pearl River Delta Business Council in September 2009 on the implementation of the Outline. With assistance and support from various fronts, the Framework Agreement has been endorsed by the State Council.

The Framework Agreement has three important iconic effects:

(i) At the Central Government level, the Framework Agreement, which is endorsed by the State Council, has translated the macro policies of the Outline into concrete measures conducive to the development of Hong Kong and Guangdong, laying a foundation for incorporating the related initiatives into the National 12th Five-Year Plan.

(ii) At the regional level, the Framework Agreement is the first agenda on Hong Kong/Guangdong co-operation ever endorsed by the State Council. It lays down the annual major work plans, provides a platform for Hong Kong/Guangdong co-operation, facilitates the updating of content in accordance with the position of annual co-operation developments, and seeks more “early and pilot measures”.

(iii) At the local level, the Framework Agreement sets clear targets and development positioning for Hong Kong/Guangdong co-operation, and outlines specific policies and measures, so as to keep the local industries and the general public better informed of the latest economic development and policies of the two places, so that they can build on the existing competitiveness and seize the opportunities for expansion.

The Framework Agreement consists of two parts, i.e. the main text and the list of annual major initiatives (see Annex A and Annex B for details; Annexes are available in Chinese only). It defines clearly the development positioning of Hong Kong/Guangdong co-operation:

(a) promote joint socio-economic development in Hong Kong and Guangdong to create a new world-class economic zone;

(b) enhance Hong Kong’s position as an international financial centre and expedite the development of financial services industries in Guangdong to build an international financial centre with Hong Kong taking the lead with its financial systems to be supported by resources and services in the PRD cities;

(c) capitalise on the competitiveness of Hong Kong’s service industries and Guangdong’s manufacturing industries to build an advanced global manufacturing and modern services base;

(d) facilitate the flow of key factors such as people, goods, information and capital across the boundary, with a view to building an international aviation, shipping and logistics hub and a world-class modern economic circulation sphere;

(e) implement a regional ecology and environment protection regime operating at a leading level by the national standards to create a high quality living area; and

(f) promote collaborative development among Hong Kong and the PRD cities to form a world-class metropolitan cluster.

To achieve the above objectives, Hong Kong and Guangdong have put forward a number of specific policies and measures, as well as set out the major initiatives for 2010:

(i) In the area of financial services, specific policies include continuing to take forward the renminbi cross-border trade settlement pilot scheme and increase the participants in a timely manner to include more regions, banks and industries where appropriate and to support the establishment of cross-boundary subsidiaries for financial institutions from Hong Kong and Guangdong. The governments and financial regulators of both sides will take forward specific work plans through the Hong Kong/Guangdong Co-operation Joint Conference and relevant platforms. Under the framework of the Expert Group on Hong Kong-Guangdong Financial Co-operation, major tasks in the coming year include: exploring specific arrangements for bank financing and issuance of renminbi bonds in Hong Kong by Guangdong enterprises through “early and pilot implementation”; advancing the renminbi cross-border trade settlement pilot scheme; and encouraging more Guangdong enterprises to list in Hong Kong.

(ii) In the manufacturing and services sectors, specific policies include assisting Hong Kong-owned processing enterprises to upgrade and restructure, and supporting Hong Kong-invested enterprises in opening up the Mainland domestic market and implementing CEPA, in particular Guangdong pilot measures for the service industries. In 2010, both places will:

(1) Continue to work out measures that will facilitate business operation of Hong Kong-invested enterprises and tapping into the Mainland market;

(2) Deal with problems encountered in the implementation of CEPA and pilot measures in Guangdong; and

(3) Further promote mutual legal co-operation and strengthen ties and communication with Guangdong authorities and legal bodies.

(iii) In respect of the facilitation of the flow of key factors such as people, goods, information and capital, specific policies include expediting the construction of cross-boundary highways, rail links and ancillary works, building a high class navigation network in the PRD, improving the mechanism of the Joint Meeting of the Five Major Airports in the PRD, proactively seeking national support for enlarging the air space in the PRD, supporting the aviation status of each airport, building a network of short-haul helicopter services in the PRD, supporting Hong Kong as an international maritime centre and supporting the development of an international logistics hub. In 2010, both places will:

(1) Pursue the implementation of the Hong Kong-Zhuhai-Macao Bridge project in a timely manner;

(2) Continue the planning of the Hong Kong-Shenzhen Western Express Line to support the development of the relevant areas; and

(3) Press ahead with the construction of the Hong Kong section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link and strive to complete it by 2015.

(iv) On the protection of the environment and ecology, specific policies include jointly exploring the reduction targets and options for the total emission of air pollutants in the PRD region in 2011-2020, gradually realising air quality objectives and fuel and emission standards for motorised vehicles and ships at a level above the national standards, exploring new forms of co-operation in the use of reusable materials, developing an electric car industry, expanding the Cleaner Production Partnership Programme, building a cross-boundary natural reserve and ecology corridor, and building a fully structured regional ecology regime, etc. In 2010, both places will:

(1) Strive to complete the 2011-2020 objectives of the PRD Regional Air Quality Management Plans by 2010, strengthen the co-operative efforts in studying the relationship among photochemical smog, hazy weather and atmospheric quality, and improve the PRD Regional Air Quality Monitoring Network;

(2) Implement the Cleaner Production Partnership Programme, support Hong Kong-invested enterprises to conduct in situ assessment, develop demonstration projects, provide certification services to assess the effectiveness of the improvement plans, and recognise Hong Kong-invested companies participating in the Programme with good performance as Hong Kong-Guangdong Cleaner Production Partners;

(3) Carry out coastal wetland co-operative conservation projects like the restoration of mangroves at the Pearl River Estuary, make joint planning for cross-border natural conservation areas, commence the construction of a regional cross-border green channel for the Bay Area at the Pearl River Estuary; and

(4) To be the pioneer in introducing the electric car to major Greater PRD cities like Hong Kong, Guangzhou, Shenzhen etc, and jointly foster the research and development, manufacturing, general application and development of the relevant auto parts industry for electric cars in the Greater PRD Region.

(v) On collaborative development, specific policies include joining hands on the promotion of the development and construction of key co-operation areas, and enhancing co-operation in planning, construction, operation and management.

(vi) On the education front, specific polices include exploring new operation modes for tertiary institutions of Hong Kong to offer education programmes in Guangdong, supporting higher education institutions of both sides to jointly offer education programmes, encouraging the opening up of education resources for secondary and primary education and continuing exchange and collaboration on teacher training. In 2010, both places will:

(1) Support prestigious tertiary institutions from Hong Kong to jointly set up institutions of higher learning in the PRD Region with Mainland education institutions; and

(2) Establish Hong Kong-Guangdong Industry- University-Research bases, joint laboratories, joint engineering research centres, humanities and social sciences research bases and innovation and technology parks, support tertiary institutions from both places in undertaking key scientific and technological research projects of national, ministerial or provincial levels.

In addition, the Framework Agreement also supports Hong Kong and Guangdong to join hands with Macao to take forward the formulation of regional co-operation plans on Quality Living Area and Infrastructure Construction which are underway.

The regional co-operation plan on Quality Living Area aims at promoting regional environmental protection and ecology conservation and facilitating development of low carbon economy in energy and industry. Emphasis will be put on economical use of land resources, improving land use models and regional spatial organisation. The plan also seeks to promote development of green transport in the region, and facilitate connecting of social services in the region. The plan will strive to enhance cultural exchange, co-operation on education and social welfare, and safeguard regional food safety with a view to transforming the region into a sustainable development area.

The plan on Infrastructure Construction is to study the speeding up of the construction of cross-border transport infrastructure, to enhance the level of co-operation of the airports, to implement the agreements on electricity, water and gas supply, to jointly take forward the implementation of the protection measures under the Dongjiang Water Resources Allocation Scheme, and to strengthen the connection of information technology infrastructure.

Principal officials of the HKSAR Government attending the signing ceremony included the Chief Secretary for Administration, Mr Henry Tang; the Secretary for Justice, Mr Wong Yan Lung, SC; the Secretary for Constitutional and Mainland Affairs, Mr Stephen Lam; the Secretary for Financial Services and the Treasury, Professor K C Chan; the Secretary for the Environment, Mr Edward Yau; the Secretary for Transport and Housing, Ms Eva Cheng; the Director of the Chief Executive’s Office, Mr Raymond Tam.

Hong Kong Chief Executive Mr Donald Tsang (left) and Governor of Guangdong Province Mr Huang Huahua (right) witnessed by the state leaders, sign the agreement.

Chinese version on next page.

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