Authorities of the Chinese Mainland and the Macao Special Administrative Region (SAR) signed a new supplemental agreement here which will further open the Mainland market to investments from Macao.

The supplement V to the Mainland and Macao Closer Economic Partnership Arrangement (CEPA) was signed by the central government's Vice Minister of Commerce, Jiang Zengwei, and the SAR's Secretary for Economy and Finance, Tam Pak Yuen. A similar supplement was also signed between the Mainland and Hong Kong SAR.

First signed by the two sides in 2003, the contents of CEPA have been expanded since then with the signing of a new supplement annually in the following years.

Supplement V introduces 28 new measures aimed to deepen the ongoing liberalization of 16 service sectors in the Mainland, and open two more sectors concerning mining and technology to Macao enterprises, which will come into force on Jan. 1, 2009, according to the press statement from the SAR government.

The total number of service sectors covered by the CEPA and its supplements will thereby be expanded to 40, and, under the new supplement, the central government agreed to facilitate Macao enterprises to invest in the Mainland market by lifting the restrictions on amounts of investment and the proportion of joint venture investment in these sectors. The two sides also reached agreement on cooperation in trademark protection.

The signing of the Supplement V shows the central government's support for the SAR's economic development, and it is "bound to benefit Macao", said Jiang, adding that after the signing of the supplement, Macao enterprises will enjoy up to 209 preferential measures in the Mainland.

Under the expanded agreement, enterprises set up by Macao suppliers of convention and exhibition services in Beijing, Tianjin, Chongqing and Zhejiang will be allowed to organize overseas exhibitions on a pilot basis.

Mainland-incorporated banking institutions established by a Macao bank will be allowed to locate its data center in Macao, subject to certain requirements. In the construction industry, restrictions on the proportion of the capital contributed by the Mainland partners in joint ventures in the Mainland will be removed.

The validity of temporary license for Macao accounting firms to conduct auditing business will be extended from two years to five years, and an examination center for Mainland accounting qualification tests will be allowed in Macao.

The agreement even allows Macao enterprises to operate natural resources exploitation including oil, gas, iron, copper and manganese in the Mainland in the form of joint venture with Mainland partner.

The Mainland authorities will continue working closely with Macao on optimizing the contents of CEPA, so as to promote the mutual development of the two sides, said Jiang.

China's Guangdong province, bordering Macao SAR, will play a pilot role in the implementation of CEPA, as eight sectors and 13 clauses mentioned in the Supplement V concern the southern coast alprovince, according to the press statement.

Under the new measures agreed in the supplement, Guangdong will allow Macao service providers to run business in eight areas including health, human resources, environment, shipping, highway transportation, welfare agencies for the disabled, etc, and lower the threshold for them to enter these sectors. In addition, Macao medical and dental service suppliers will be allowed to set up wholly-owned outpatient clinics in Guangdong.

Tam noted that the Supplement V highlights the important role of Guangdong in Mainland's market liberalization to Macao, which the SAR will seek to enhance through the established mechanism of cooperation and communication between Macao and Guangdong.

Although the major part of the two supplements concerning Hong Kong and Macao is more or less the same, the supplement V signed by Hong Kong and the Mainland comprised a new short-term travel arrangement, which was not included in the Mainland-Macao supplement.

"Macao is still different from Hong Kong despite the fact they are both China's SARs, and if Macao has the same need in the future, we can still make such request to the Mainland authorities," Tam said.

He also encouraged local service providers to make the best of the opportunities brought by CEPA to expand their operations in various fields, in a bid to diversify Macao's economic development.