1. In CEPA, the Mainland has given preferential treatment to Hong Kong service suppliers in 18 service sectors.  Under CEPA II, the Mainland has agreed to broaden the liberalization in respect of 11 of them :

In addition, the Mainland has agreed to introduce liberalization measures in the following 8 new areas :

2. Broadly speaking, the liberalization permits earlier access for Hong Kong services suppliers to the Mainland market, ahead of China's WTO timetable.  In some sectors, like audiovisual services, transport and related services and medical services, the concessions go beyond China's WTO commitments. In particular, the Mainland has agreed to lift the geographical restriction and expand the business scope for the individually owned stores set up by Hong Kong permanent residents with Chinese citizenship. The new liberalization measures under CEPA II are set out in Annex II.

Definition and Certification of "Hong Kong Service Supplier"

3. Generally speaking, "juridical persons" (including companies, partnerships and sole proprietorships) as well as "natural persons" of Hong Kong will be able to enjoy preferential treatment granted by the Mainland, provided that they fulfil the definition and related requirements of Hong Kong service suppliers.   Unless otherwise specified in CEPA, a "natural person" means a Hong Kong permanent resident, whereas a "juridical person" means any legal entity duly constituted or otherwise organized under the applicable laws of Hong Kong and which has engaged in substantive business operations in Hong Kong for three to five years.
  
4. Hong Kong service supplier as a juridical person should apply to TID for a Certificate of Hong Kong Service Supplier before it can obtain the preferential treatment under CEPA.   A Hong Kong service supplier who wants to obtain CEPA treatment as a natural person should provide to the relevant Mainland authorities identification of his or her Hong Kong permanent resident status.

5. Detailed application procedures for the 18 service sectors covered in CEPA have been announced in Notices to Service Suppliers No. 2/2003, No. 2/2004 and No. 3/2004, all of which can be downloaded from the website of TID (www.tid.gov.hk/english/cepa/). It is envisaged that procedures for applying Certificate of Hong Kong Service Supplier in respect of service areas under CEPA II will basically follow the procedures announced in the above circulars, supplemented with certain sector-specific requirements, if any. The circulars will be updated and announced as appropriate.

Mutual Recognition of Professional Qualifications

6. As part of the services trade under CEPA, Hong Kong and the Mainland have committed to encouraging mutual recognition of professional qualifications and promoting the exchange of professional talents between each other. After the signing of the six Annexes of CEPA in September 2003, relevant professional and regulatory bodies of Hong Kong and the Mainland, with the support and facilitation of the CPG and the HKSARG, have concluded the following agreements or arrangements:

* a reciprocal agreement in early November 2003 for the estate surveyors;

* an arrangement to facilitate the flow of qualified personnel and expertise in respect of the securities and futures industry in December 2003;

* a mutual recognition agreement for architects in February 2004;

* an agreement on measures to facilitate Hong Kong residents to take the "Mainland Insurance Practitioners Qualifying Examinations" in February 2004;

* arrangements to allow Hong Kong residents to take the "National Qualification Examination for Patent Agents" in April 2004.

On 27 August 2004, a mutual recognition agreement for structural engineers, and an arrangement for the exemption of professional examination papers in the accounting sector were signed.