I'm glad to take part in the Second Forum on Pan-Pearl River Delta Regional Cooperation and Development. As one of the most robust and competitive economic belts of Chinese economy, Pan-Pearl River Delta Regional Cooperation has made positive achievements and tried out new ways of development and cooperation among eastern, central and western China. I would like hereby, on behalf of the Ministry of Commerce, to extend warm congratulations to the Forum.

It is well-known that, CEPA for Hong Kong and Macao was formally put into effect in an all-round way on Jan. 1, 2004. And in June 2004, the Forum on Pan-Pearl River Delta Regional Cooperation and Development was launched. The implementation of CEPA expedited the economic integration of mainland with Hong Kong and Macao, and promoted greatly the regional cooperation of Pan-Pearl River Delta:

Zero tariff on 1108 imports from Hong Kong and 509 Macao is in effect, basically including all the products in Hong Kong and Macao and Mainland expanded firstly the open-up of 26 service industries to Hong Kong and Macao with the principle of "earlier than WTO and more preferential than ASEAN" in service trade.

Since the implementation of CEPA one and a half year before, value of all goods with zero tariff imported by mainland amounted to 1.86 billion Hong Kong Dollars and exempted tariff reached RMB130 million. In service industries like logistics, distribution and freight forwarding, many Hong Kong and Macao enterprises have entered into Mainland according to the commitment of CEPA, and made progress in 7 areas such as facilitation of Customs Clearance, e-commerce and small and medium seized enterprises in the aspect of trade and investment facilitation.

Mainland and Hong Kong also positively drove up the recognizing of each other on qualification of professionals, there were over 450 people passing the examination and obtained professional certificates in both Mainland and Hong Kong.

Personal RMB business in Hong Kong and Macao went well and now nearly all banks engaging in retail sales in Hong Kong have operated RMB business like deposit, exchange, remittance and credit card, and RMB deposit balance in Hong Kong by the end of May 2005 hit RMB19.3 billion.

The heat of personal tourists to Hong Kong and Macao did not calm down. Over 6 million individual travelers from Mainland went to Hong Kong and Macao since the July 2003.

Relative department of Mainland took further measures to facilitate enterprises to invest in Hong Kong and Macao for business. In Sept. 2004, the Ministry of Commerce and Hong Kong and Macao Office jointly issued Measures on Approving Mainland Enterprises to Establish Companies in Hong Kong or Macao and took many measures such as simplifying procedures, releasing authority, shortening procedures period ect. to support mainland enterprises to invest in Hong Kong and Macao. From Sept. to Dec. after the simplification of procedures, number of approved mainland enterprises investing in Hong Kong and Macao accounted for a half of total number in the whole year.

The performance of CEPA promoted the common development of economy in Mainland, Hong Kong and Macao. GDP in 2004 in the above-said three regions was up by 9.5%, 8.1% and 28% respectively. Total imports and exports of mainland with Hong Kong and Macao broke through US$100 billion, amounting to US$114.5 billion. By the end of June 2005, total foreign capital used by Mainland from Hong Kong and Macao reached US$255.7 billion, accounting for 43.3% of total foreign investment. By the end of 2004, the accumulative overseas investment from Mainland to Hong Kong and Macao hit nearly US$30 billion, accounting for 3 fourths of total. Hong Kong and Macao were the biggest sources of use of foreign investment and destinations of overseas investment for mainland.

Since the implementation of CEPA, 9 provinces in Pan-Pearl River Delta actively utilized the advantage of geography, seized the opportunity to push forward the regional economic cooperation. In 2004, total imports and exports of the 9 provinces with Hong Kong and Macao amounted to US$82.3 billion, accounting for 72% of total. And the actual use of direct investment from Hong Kong and Macao reached US$8.6 billion, accounting for 44% of total. 80% of Hong Kong and Macao goods with zero tariff entered into Mainland through Pan-Pearl River Delta ports. It should be said that to enhance the close cooperation with Hong Kong and Macao through CEPA has been the major part of Pan-Pearl River Delta Regional Economic Cooperation and also the important opportunity of coordinate development in manufacture and service.

Ladies and Gentlemen, the Forum on Pan-Pearl River Delta Regional Cooperation and Development was just launched for only one year. Regional cooperation has made positive achievements. Facing with the futures, I believe that we should catch 3 opportunities, make full use of advantages and deepen cooperation to realize win-win.

First, Pan-Pearl River Delta Regional Cooperation requested to catch the chance of domestic and foreign trade integration. The Integration was the important power to conform domestic demand to overseas market demand and to promote the sustainable growth of national economy. As the administrative department of Commerce in China, the Ministry of Commerce has always endeavored to push forward the integration of domestic and foreign markets. In the past one year, the newly revised Foreign Trade Law released the rights of doing foreign trade in an all-round way, drew up New Administrative Measures for Foreign-Invested Commercial Enterprises, allowing enterprises with various ownership and even individuals to do foreign trade, issued Compendium of Reform and Development in Circulation Industry to speed up the mechanism reform in circulation, launched the program of creation of Commercial Aviation Mother Ship of China, cooperated with relative departments to clear up some regulations concerning local protectionism to reinforce the construction of single market and market inspection and control, and even to strengthen the protection of IRP.

Pan-Pearl River Delta Regional Cooperation was required to catch the chance of domestic and foreign trade integration and weaken the concept of administration to realize the complete open-up among 9 provinces. We should enhance the inspection and management on market order to break through geography discrimination through promoting the mechanism reform in circulation and construction of market system to encourage fair competition, lower transaction costs and indeed fulfill the mission of market adjustment so as to effectively push forward the healthy and coordinate development of domestic and foreign trade and investment in 9 provinces.

Second, Pan-Pearl River Delta Regional Cooperation was asked to seize the opportunity to further expand the open-up of the Delta to Hong Kong and Macao through CEPA. As the major region in the cooperation on trade and economy between Mainland and Hong Kong, Macao, the delta should enhance the cooperation to eliminate the obstacle of factors flowing, set up a coordinate, open and fair regional market. Now, the mainland and Hong Kong, Macao have launched the negotiation on the third phase of CEPA, in the field of cargo trade, since Jan. 1, 2006. mainland will fulfill zero tariff on all Hong Kong and Macao products, and in service trade, mainland will also further expand the open-up. Under the framework of CEPA, provinces in Pan-Pearl River Delta may reinforce mutual complementation and cooperation in various industries and superior industries for special. The 9 provinces may undertake more industrial migrant from Hong Kong and Macao to suffer the radiation function of Hong Kong and Macao in info, international market, brands and enterprises management, and obtain the support in service industry to promote self-development and update of industrial structure. Both Hong Kong and Macao will get much room to integrate capital, market, technology and talents to realize economic transition and upgrade. I believe that the comprehensive economic strength and competition will be improved certainly.

Third, push out Pan-Pearl River Delta Regional Cooperation to the world. Pan-Pearl River Delta Regional Cooperation should walk at the front in the situation of mainland integrating into economic globalization, further construct a harmonious and trans-provincial society to realize the sustainable economic development. After the entry into WTO, China actively took part in the regional economic integration, and now is engaging in the Free Trade Zone negotiation with Chile, New Zealand and GCC, and may step into harvest period in coming several years. Pan-Pearl River Delta should catch the chance to enjoy the preferential trade arrangement at the maximum extent and even should play well the role as a "Channel" and "Platform".

Pan-Pearl River Delta should utilize the geographic advantage to be the golden channel connecting mainland and ASEAN. After the implementation of Early Harvest, China and ASEAN signed formally the Cargo Trade Agreement under the Framework of China-ASEAN Free Trade Zone at the end of Nov. 2004, and launched the program of tariff reduction from July 1 2005. Economic aggregate of 10 ASEAN countries was huge, have rich natural resource and broad market prospect, and China and ASEAN were strongly complementary in economy. It is beneficial to push forward the regional economic growth for China to enhance the cooperation with ASEAN.

Pan-Pearl River Delta has an advantageous platform of “Forum for Economic and Trade Cooperation between China and Portuguese-speaking Countries”. In 2006, the second session of the Forum will be held in Macao, the Delta could completely use the Forum to enhance the economic cooperation with Portuguese-speaking Countries through the bridge of Macao to exploit the market of Portuguese-speaking Countries, and to extend the markets of Europe, America and Africa by means of exploiting Portugal, Brazil and Angela.

Finally, I wish the Forum a complete success. Thanks!

(Source: Network Center of MOFCOM)