2. Some services sectors are not included in the CEPA. Why?

The CEPA just concluded is a very good start. It provides a mechanism for further liberalization measures to be included as and when both parties agree them. The HKSAR will engage the Mainland authorities in discussion of further liberalization and greater market access for Hong Kong companies into the Mainland market in the months ahead.

3. What are the eligibility criteria for "Hong Kong Service Suppliers"?

Generally speaking, "juridical persons" including companies, partnership and sole proprietorship, as well as "natural persons" of Hong Kong will be able to enjoy CEPA benefits provided that they fulfill the conditions stipulated in Annex 5 of CEPA. Unless otherwise specified in CEPA, a "natural person" means a permanent resident of the HKSAR whereas a "juridical person" means any legal entity duly constituted or otherwise organized under the applicable laws of Hong Kong and has engaged in substantive business operations in Hong Kong for three to five years.

4. Will merger or acquisition of an enterprise affecting its eligibility as "Hong Kong Service Supplier"?

If the merger or acquisition is completed on or after the day CEPA comes into effect (i.e. 29 June 2003) and, as a result, over 50% of the enterprise's equity interest has been acquired by a foreign service supplier, the enterprise being merged or acquired will not be regarded as a "Hong Kong Service Supplier" within the first year of the merger or acquisition. If the merger or acquisition was completed before the day CEPA comes into effect, the enterprise's eligibility as a "Hong Kong Service Supplier" will not be affected as long as the enterprise fulfils the eligibility criteria laid down in Annex 5 of CEPA. In applying for the Certificate of HKSS, applicants are required to declare whether there is any change to its controlling equity interest (more than 50%) on or after 29 June 2003. If so, the applicant should provide details of the controlling shareholder.

(Source from HKSAR government and Hong Kong Trade Development Council)

The Olympic Partners (TOP) Programme: The worldwide Olympic sponsorship programme managed by the International Olympic Committee (IOC).
Olympic Games sponsorship: The sponsorship programme established within the Olympic Games host country to directly support the staging of the Games, managed by the Olympic Games Organising Committee (OCOG) under the direction of the IOC.
National sponsorship: A sponsorship programme established within a country to directly support an National Olympic Committee (NOC) and its Olympic team, managed by the NOC.
The Rights & Benefits of TOP Partnership
The TOP programme managed by the IOC is the only sponsorship with the exclusive worldwide marketing rights to both Winter and Summer Games, providing support for the OCOGs, all 200 NOCs and their Olympic teams, and the IOC.

As the host of the 2008 Olympics, the city of Beijing will benefit considerably from the massive investment spending in the pipeline and the numerous job opportunities it will create. The Beijing municipal government has already announced an ambitious plan to spend US$ 20 billion in the next seven years to modernize the city's infrastructure. This translates into an average annual spending of about US$ 3 billion, which is equivalent to 10% of the city's GDP in 2000. The sum will be spent on developing sports facilities, public transportation, and communication networks. Apart from the infrastructure spending, a further US$ 12 billion will be ploughed into environmental protection projects.

Meanwhile, the marketing hype that goes with the Olympics would also have a significant impact on raising the awareness of Beijing, and help accelerate the growth of the city's tourism industry. Judging from the experience in other host cities of the Olympics, tourist arrivals in Beijing could increase by 20% during the year of the Games, which would provide a strong boost to retail sales in the city. According to some rough estimates, increased infrastructure spending and the gain in tourism income would add an average of about 2-3 percentage points per year to Beijing's GDP growth in the next seven years. In 2000, Beijing's economy grew by 11%.

Outside of Beijing, however, the economic impact would likely be much limited other than the spillover effects on the country's tourism industry at large. In the context of China's overall economy, the US$ 20 billion infrastructure spending of the Olympics is less than 2% of the country's GDP in 2000. Meanwhile, as the government would finance the bulk of the spending out of its tight fiscal budget, the gain in investment in Beijing may well mean a reduction elsewhere in the country. Some estimates put the net contribution of the Olympics to China's national GDP growth in the next seven years at only 0.1 percentage points per year. The Chinese economy grew by 8% in 2000.

As a major travel hub to China, Hong Kong will stand to benefit from the take-off of China's tourism business. The hotel and travel industries would be the obvious winners, as tourists stop over Hong Kong when they visit China during the sporting event. Hong Kong's companies may also win a handful of construction contracts, and pick up some production orders for logo-related items of the Beijing Olympics, such as clothing and gift souvenirs. The value of these deals, however, would likely be small compared to the overall business that Hong Kong's companies are now doing across the border. Judging from the experience in other cities hosting the Olympics in the past, contracts of the big infrastructure projects are likely to go to companies in the host countries. Meanwhile, many of the big branding contracts will also probably be awarded to large multinational merchandisers that have a larger budget. The economic benefit of Beijing Olympics to Hong Kong other than the boost to the SAR tourism industry would therefore likely be negligible.

While many are quick to point to the monetary benefits of hosting the Olympic Games, which seem to be quite limited outside of Beijing, the real significance of the sporting event lies beyond economics. In the run up to the Beijing Olympics, China will become more integrated into the global community, not just in terms of sports but also culturally. The hosting of the sporting event will also expose China to greater international scrutiny and foster better understanding about the country. Through engaging China closer with the wider world, the Olympic Games will help strengthen the forces of liberalism in the country and hasten the pace of social, if not political, change.

(Source from International trade and relations)