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Following is the transcript of a media session by the Chief Executive, Mr Tung Chee Hwa, on matters relating to Mainland/Hong Kong Closer Economic Partnership Arrangement (CEPA) at the Conference Hall of the Central Government Offices (New Annex) today (June 16):

Chief Executive: This morning, accompanied by Antony and Henry, I met Director Liao Hui and Vice-Minister of Commerce An Min in Shenzhen. We discussed the progress in establishing this very famous Arrangement. I would like to give you a piece of really good news: Under the direction of President Hu Jintao, Premier Wen Jiabao and Vice-Premier Wu Yi, and with the concerted efforts of officials from both sides, our discussions have made substantial, concrete progress, and we are close to reaching a consensus. We have agreed to hold a ceremony to sign the agreement on CEPA in Hong Kong on June 30.

I cannot give you the details of the Arrangement today, but I can tell you, this Arrangement covers three main areas: trade in goods, trade in services and trade and investment facilitation. On trade in goods, many Hong Kong products will benefit from the zero tariff arrangements. On trade in services, a number of sectors will benefit from the Arrangement. They include management consultant services, exhibitions and conventions, advertising, legal services, accountancy, medical services, the real estate market, construction engineering, transport, wholesale distribution, logistics, tourism, audiovisual, banking, securities and insurance etc. Regarding the questions of origin rules and the definition of a Hong Kong firm, these are issues that many are very concerned with, we have fully taken into account Hong Kong's position as an international city and the present circumstances, adopting rules that are both flexible and easy to monitor.

The good progress Hong Kong and the Mainland have made on CEPA fully reflects the Central Government's support for Hong Kong. I believe that this Arrangement we are going to sign at the end of this month will bring substantial business opportunities for the various sectors here in our community. It will greatly help Hong Kong overcome its difficulties and achieve economic recovery as soon as possible. What we must do now is actively prepare ourselves for this opportunity so that Hong Kong's economy can pick up as quickly as possible.

Reporter: I am from the Associated Press. I would like to ask Mr Tung who will be taking part in the ceremony. Would the Chinese president or premier come to Hong Kong to take part? Will Hu Jintao and Wen Jiabao come to Hong Kong?

Chief Executive: I have invited the Central leadership to meet here for the signing ceremony, as well as to celebrate the sixth anniversary of the return of Hong Kong. The final confirmation is still awaited. I cannot tell you any more at this moment, but we hope they will come.

(Please also refer to the Chinese portion of the transcript.)

End/Monday, June 16, 2003

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Floor/ Cantonese/ Putonghua/ English