73. Introduced only a year ago, CEPA has helped foster economic growth in Hong Kong. Over 660 Hong Kong-registered enterprises have been issued with Certificates of Hong Kong Service Supplier. Under CEPA, these enterprises are able to enter the Mainland market much earlier and enjoy preferential treatment. Some enterprises in sectors such as banking, distribution, transport and logistics have already set up business in the Mainland. And professional services are beginning to develop market opportunities. Implementation of the Individual Visit Scheme quickly boosted the retail sector and the overall consumer market. Since last August, the application procedures for state-owned and private enterprises in the Mainland to set up business in Hong Kong have been greatly streamlined. This has speeded up the pace of Mainland enterprises investing in Hong Kong and fostered growth for both places. By the end of 2004, products with a total value of $1.145 billion had been manufactured in Hong Kong and imported into the Mainland tariff free.

74. We understand that, with the implementation of CEPA in Mainland provinces and cities, some areas require specific supporting measures. Some of our services sectors still face relatively high thresholds. We will continue to follow up these issues with the Central Authorities.

75. We have started to consult the industries concerned on the contents of CEPA III, to be implemented next year, and will begin discussions with the Central Authorities.

76. The implementation of CEPA has brought immediate benefits to our economy. This is plain for all to see. The experience of other regions in formulating free trade arrangements shows that it takes time for the newly generated economic activities to produce visible results. Therefore, we expect the economic benefits of CEPA to become even more evident over time.