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Hong Kong And China Agreement

16The preferential opening measures, which vary considerably from sector to sector, generally include a reduction in the timetable for liberalization under China`s WTO accession protocol and/or additional liberalisation measures and/or a relaxation of the criteria for access to foreign enterprises. Again, this is a largely unilateral commitment, although Hong Kong has pledged not to take further discriminatory measures against the PRC in order to gain access to the 18 sub-sectors covered by the agreement. This second clause could bring some advantages to mainland China: the growth of direct investment in Hong Kong and the acquisition of know-how before the opening of the services sector to foreign competition. It must have an important activity, the proof of which is, through an analysis of four different criteria: the nature and extent of activities in Hong Kong, responsibility for Hong Kong`s income tax, at least three years of existence and activity (five years in the construction and mechanical construction sector, no condition imposed on real estate agencies) and the existence of 100% or leased offices, excluding only “post boxes” from the benefits of the contract. 28The EPA is of great political importance. The agreement signed at the end of June 2003 on the occasion of the official visit of the new Chinese Prime Minister Wen Jiabao to the SAR shows that the maintenance of Hong Kong`s prosperity remains the essential objective of the people`s republic of China`s policy towards SAR, not least because the Chinese authorities consider it to be the main factor in maintaining political stability in Hong Kong and the success of the “one country, two systems” principle. The EPA is therefore the most visible sign of the Chinese authorities` desire to bring Chinese growth to Hong Kong by increasing economic penetration without jeopardy the total autonomy of Hong Kong`s economic territory, which has been symbolically strengthened by the conclusion of a bilateral trade agreement. When negotiations between Britain and China on Hong Kong`s political future began in 1982, the British government`s initial proposal was to retain an administrative role in the region after 1997. Such a position outraged the nationalist sensibilities of the Chinese government and its categorical rejection caused great consternation within the territory in the face of possible unilateral measures taken by the Chinese. However, in a series of tense negotiations, the British accepted the Chinese position and, in September 1984, a sovereignty transfer agreement was signed in the form of a joint declaration.

According to the statement, China should develop a fundamental law that embodies some fundamental policies. On 1 July 1997, Hong Kong was to become a Special Administrative Region (SAR) of the People`s Republic of China, with a government composed of “local residents”.