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The Financial Secretary, Mr John C Tsang, has welcomed Announcement No 71, issued today (September 5) by the Ministry of Commerce, General Administration of Customs and China Banking Regulatory Commission, which allows enterprises engaging in processing trade to pay standing book deposits by various means including cash and bank guarantees.
"We are delighted and thankful to the Central Government for accepting the suggestion of the SAR Government and Hong Kong traders and bankers to allow the industry to pay standing book deposits by bank guarantees etc in lieu of cash. I believe the new arrangement will greatly help Hong Kong enterprises adjust themselves to the recent policy changes in processing trade," Mr Tsang said.
The Ministry of Commerce and General Administration of Customs issued Announcement No 44 on July 23, adding 1,853 commodities to the List of Commodity Restricted for Processing Trade and requiring categories A and B enterprises to pay standing book deposits.
Recognising that the measures would cause cash flow problems for Hong Kong enterprises operating on the Mainland, the SAR Government has maintained close contact with the Ministry of Commerce and other relevant ministries to reflect the concerns of the industry. Proposals were also made to request the Central Government to accept payment of the standing book deposit in the form of bank guarantee.
Mr Tsang and the Secretary for Commerce and Economic Development, Mr Frederick Ma, during their visits to Beijing in August, had also relayed the industry's worries and concerns to various ministries and followed up on the standing book deposit issue and related suggestions.
According to the newly issued Announcement 71, enterprises are allowed to pay standing book deposits by means of bank guarantees etc.
The Commerce and Economic Development Bureau had been in close contact with the industry, and a Task Force to Support the Processing Trade was set up in July to gauge their views. The bureau also encouraged the industry to restructure, upgrade and relocate their businesses to central and western mainland, in line with the national policy.
In response to an invitation of the Hunan provincial government, Mr Ma led a delegation of Hong Kong industrialists to Chenzhou last month to explore the possibility of relocating their operations from Guangdong Province to provinces in the central and western part.
"We will continue to liaise closely with the Ministry of Commerce and Hong Kong enterprises, support the national policy, and at the same time ensure that suggestions made by the industry are fully reflected and considered by the Central Government in formulating new policies.
"When opportunities arise, study tours similar to the one to Chenzhou will be arranged for Hong Kong industrialists to visit other cities that have potential for business relocation," Mr Tsang said.
Ends/Wednesday, September 5, 2007
Issued at HKT 18:04
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