The Closer Economic Partnership Arrangement (CEPA) between Hong Kong and the Chinese mainland, implemented in 2003, has proven to be a cornerstone of Hong Kong's economic success. By the end of 2024, cumulative tariff concessions under CEPA have exceeded 10.2 billion yuan ($1.4 billion), underscoring the long-term impact of this agreement on both economies.

Chief Executive of Hong Kong, John Lee Ka-chiu, highlighted that CEPA has played a pivotal role in expanding Hong Kong's access to the mainland market, particularly in the services sector. Under the agreement, goods produced in Hong Kong and meeting origin rules enjoy zero-tariff benefits when entering the mainland. This has spurred bilateral trade, with the value of goods trade reaching over HK$4.8 trillion in 2024, more than three times the pre-CEPA level. This marks an average annual growth rate of 5.6%, demonstrating the sustained success of CEPA in stimulating trade.

On the services front, CEPA has made significant strides toward liberalization. As of 2024, 153 service sectors in the mainland are open to Hong Kong businesses, covering 96% of the 160 services sectors recognized by the World Trade Organization. Industries such as finance, insurance, architecture, telecommunications, and healthcare have benefitted immensely, with Hong Kong businesses expanding their presence on the mainland and tapping into new growth opportunities.

In October 2024, the Hong Kong government and China’s Ministry of Commerce signed an agreement to amend the CEPA services trade agreement. Effective from March 1, 2025, this revision introduces new liberalization measures, focusing on sectors where Hong Kong has a competitive advantage, including finance, construction, telecommunications, and tourism. The amendment aims to further ease market access for Hong Kong businesses and professionals, enhancing their ability to tap into the mainland's vast service markets.

Lee emphasized that the updated agreement will further boost Hong Kong's competitive edge in key sectors, strengthening its global position while benefiting from the mainland’s expanding economy. This is particularly relevant for Hong Kong’s financial services and construction sectors, where the city already has well-established expertise.

With the recent CEPA amendments and the ongoing integration into the GBA, Hong Kong’s economic outlook is highly favorable. The city's government remains committed to enhancing Hong Kong’s competitive advantages in both trade and services, ensuring that local businesses can continue to thrive within mainland China and on the global stage.

For international investors and businesses looking to enter the Chinese market, Hong Kong's continued economic expansion and strengthened ties with the mainland offer substantial opportunities. CEPA remains central to Hong Kong’s economic strategy, facilitating trade, services, and investment and reinforcing the city’s role as a key economic and financial hub connecting China with the rest of the world.