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The Closer Economic Partnership Agreement, more commonly known as CEPA, has been going since 2003. After several rounds of supplementary agreements, CEPA has expanded its scope. Nowadays Hong Kong businesses can enter the mainland through CEPA, and many professionals can start new careers in professional services on the mainland. From an economic and development point of view, CEPA is very useful to Hong Kong.

Needless to say, CEPA has paved the way for Hong Kong businesses to enter the mainland market. When we look back to 2003, it was unimaginable for Hong Kong businesses to enter the market up north on such a scale as they are today. But for big conglomerates, entering the mainland market was not such a remote idea. However, for many small and medium-sized enterprises (SMEs), the lack of resources and policy support made entry into the mainland unthinkable. There were many stories about how difficult it was for SMEs to survive on the mainland. CEPA provided the much needed policy support to SMEs. Nowadays, we can see many SMEs have operations in Guangdong. Many familiar Hong Kong brands are also seen in other mainland cities, not just restricted to the Pearl River Delta region. This all illustrates the importance of CEPA.

To the professionals, CEPA is a way to start a new career. Many people wrongly believe that all professionals are well paid and can make a lot of money by focusing on the Hong Kong market. The important point is that professionals will not be content with the status quo. The need to expand their professional services will definitely lead to demand for a bigger market, and the mainland is the ideal and logical choice. Today, many people in various professions are finding new opportunities as well as new challenges north of the border.

Another important point to note is that while professionals find new businesses attractive, the challenges generated by new businesses are equally significant. Take medical professionals, for example. A real medical professional will be fascinated by ample cases for medical research. Also, the structural differences between the mainland and Hong Kong medical services will generate new ideas for improving medical treatment. Though this can be challenging as Hong Kong professionals need to face a new environment, these challenges will allow Hong Kong professionals to develop further.

It must be stressed that the advantages of CEPA do not go all one way. For the mainland, CEPA also provides many advantages. At a business level, Hong Kong enterprises bring in new ideas for business firms and a totally different corporate culture. A positive view is that this will upgrade the products and service quality of mainland businesses. The rapid improvement of mainland business sectors can also be attributed to CEPA.

Equally, the entry of Hong Kong professionals will lead to new ways of thinking by professionals. Take the out-patient clinic operated by the Hong Kong University (HKU) in Shenzhen, for example. The different ways clinics operate have led to interesting new experiences. Many Shenzhen people cited the HKU experience as a model for Shenzhen clinics to learn from. It must be stressed that I do not mean Hong Kong is superior in its professional services. Rather, the interaction between mainland and Hong Kong professionals can lead to better outputs - a result that benefits both sides.

A less-mentioned benefit of CEPA is it facilitates the integration between the mainland and Hong Kong. The interactions among businesses and professionals, as well as people who experience such interactions, will definitely lead to further integration between the mainland and Hong Kong. CEPA makes the flow of goods, services and even visitors occur more easily between the two places. Through more frequent encounters, the mainland and Hong Kong will understand each other better. It is true that such interactions will not come without some concerns. Just as we may not accept some practices on the mainland, the mainland may also find some Hong Kong ways unreasonable. Cultural differences need time to adjust, but CEPA provides a good platform. I am more optimistic about what CEPA can achieve. I firmly believe CEPA can provide even better outcomes in future.

Raymond So is dean of the School of Business at Hang Seng Management College

(HK Edition 01/23/2014 page1)