China foreign trade relations

Hong Kong is the most important entrepot of the China, accounting for more than 60% of re-exports of mainland origin goods and 50% of re-export goods destined for the mainland market (transshipment goods included).

In November 2005, China and the US signed a bilateral agreement on textiles and clothing trade to re-impose quotas from 1 January 2006 through 31 December 2008 covering a total of 21 groups involving 34 categories of textiles and clothing products.

In June 2005, the EU imposed safeguard quotas on 10 categories of Chinese textile products for the period of 2005 to 2007, with a provision for a smooth transition to liberalization of the textile trade during 2008.

China remains a beneficiary of the EU Generalized Preference Scheme 2006 - 2008, and benefits from reduction of tariff rates for sensitive products and zero rate for non-sensitive products. But some popular China export items are excluded from the EU GSP, e.g. consumer electronics, watches, jewellery, clothing, furniture and toys. Hong Kong had already been fully excluded from the EU scheme since May 1988.

Under CEPA IV, the Mainland and Hong Kong have agreed on a package of further liberalization measures to be effective from 1 January 2008 covering both goods and services, as well as other cooperative measures. Key measures agreed include convention and exhibition, banking, securities, tourism, cultural, medical and dental under the existing services areas; public utility, services for the elderly, computer and related services, market research, management consultant in the new services areas. Virtually all goods exports to China are now eligible for zero duty if their origin criteria are fulfilled.