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Hong Kong, China Sign Free Trade Pact

Posted on: Sunday, 29 June 2003, 06:00 CDT

Hong Kong and China signed a free-trade agreement on Sunday that officials say will boost the territory's economy as it recovers from the SARS crisis and looks ahead to opportunities presented by the mainland's growth.

A small group of pro-democracy activists scuffled with police outside the former British governor's mansion, now used for government receptions, as Hong Kong Financial Secretary Antony Leung and China's Vice Minister for Commerce An Min signed the deal. Chinese Premier Wen Jiabao and Hong Kong Chief Executive Tung Chee-hwa looked on.

Officials were to release details of the pact later, but have said it will benefit many businesses by bringing down trade barriers between Hong Kong and mainland China, which is used as a low-cost manufacturing base by many Hong Kong companies.

Wen, on his first visit to Hong Kong since becoming premier earlier this year, will also attend Tuesday's sixth anniversary of Hong Kong's 1997 return from British to Chinese sovereignty.

Opponents of a sweeping anti-subversion bill backed by Hong Kong's government expect tens of thousands of people to turn out for a protest they've planned for that day.

The legislation, which critics fear will harm civil liberties, appears headed for certain passage later this month by Hong Kong's Legislative Council, where government allies hold a majority.

Many see the SARS outbreak as Hong Kong's biggest crisis since the handover, and any boost to the economy would be welcomed by Hong Kongers suffering from a downturn that has pushed unemployment to a record 8.3 percent.

Severe acute respiratory syndrome, which infected 1,755 people here and killed 298, devastated sectors of the economy, particularly transportation and tourism.

Although Hong Kong is now part of China, it is governed separately and has been treated as a separate customs territory.

Tung said previously the free trade deal would remove mainland quota restrictions on Hong Kong films and loosen requirements on joint movie productions.

Other sectors expected to benefit include accounting, advertising, construction, insurance, real estate and transportation, Tung said.

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