CEPA's implementation signifies a new stage in the integration of the two economies, regulated and fostered by a systematic arrangement.

Working like a free-trade zone arrangement, CEPA secures for Hong Kong a prominent place in the national economic picture. If Hong Kong's return to the motherland in 1997 signified the completion of Hong Kong's political resurrection, CEPA will blaze a new trail for its economic relaunch.

Over the past few decades, especially since the mainland adopted the reform and opening policy, Hong Kong has made enormous contributions toward the nation's development by bridging the mainland and world market.

However, with the further opening up of the mainland and the constant enhancement of its economic competitiveness, particularly in the manufacturing industry, Hong Kong's middleman function has faded. The mainland's accession to the World Trade Organization has, to a certain extent, hastened that development.

At the same time, Hong Kong's prohibitive operational costs have not only accelerated the northward relocation of its manufacturing industry, but raised the threshold of entry by foreign enterprises into the territory, intensified local industries?hollowing out and hindered economic restructuring.

Against this backdrop, CEPA could not have been implemented at a more opportune moment. It has already breathed new life into the local economy and pointed the way forward. Mutual reliance between Hong Kong and the mainland has been deepening ever since the latter opened itself up. Utilizing the mainland's blazing economy to spark Hong Kong's economic revival has become common practice in the territory. CEPA is fulfilling this role while effectively countering the major shortfalls of the local economy.

First, the advantage of Hong Kong's service industries will be given prominent play to provide more direct financial, trade and business services for the mainland. This means Hong Kong will again serve as the most effective conduit through which mainland enterprises reach out and foreign investments come in.

Second, thanks to CEPA, high value-added industries will be able to survive in the territory under the impetus of zero tariffs. Hong Kong products will make inroads into the mainland. And these industries will become the new growth engine driving Hong Kong's economy.

(China Daily)