Hong Kong insurance companies can access the mainland Chinese market through a strategic merger with a local group as long as they comply with the conditions set by China`s WTO accession agreement (no Hong Kong company is affected). When negotiations between Britain and China over Hong Kong`s political future began in 1982, the British government`s initial proposal was to retain an administrative role in the region after 1997. Such a position has outraged the nationalist sensibilities of the Chinese government, and its total rejection has caused widespread consternation in the territory in the face of possible unilateral measures by the Chinese. However, during a series of tense negotiations, the British yielded to the Chinese position and a sovereignty transfer agreement in the form of a joint declaration was signed in September 1984. According to the statement, China should draft a basic law that embodies certain fundamental policies. On 1 July 1997, Hong Kong was to become a Special Administrative Region (SAR) of the People`s Republic of China with a government „composed of locals”. The RAD would have „a high degree of autonomy, except in foreign and defence matters,” and its „current social and economic systems” and „way of life,” including civil liberties, would be the same. The SAR would retain its status as a free port, a separate customs territory and monetary system, and the right to manage its own economic relations with other countries and international organizations. These rules should remain unchanged for fifty years.
(15) 30 In addition, CEPA is the first bilateral trade agreement signed by Hong Kong. Another agreement is being negotiated with New Zealand. While the Hong Kong authorities do not question the priority of multilateral negotiations, they do not hide their desire to participate, like Singapore, in the dissemination of bilateral and regional agreements in order to strengthen the image of the SAR as a regional commercial market. The persistent sense of historical injustice, which is part of China`s official position on Hong Kong, helps explain the persistent differences and misunderstandings that have plagued Sino-British negotiations in the territory in recent years. Many Chinese officials have long been wary of British intentions, including fears that the British will deprive Hong Kong of their wealth when they leave or use the territory to undermine the People`s Republic and its values. These under-currents became particularly evident when, in 1992, Hong Kong`s last British governor, Chris Patten, began reforms aimed at introducing some degree of popular representation into the colony`s governmental institutions. For the Chinese authorities, these changes constituted, at best, a breach of previous agreements between the two sides in order to allow a smooth transition to Chinese domination or, in the worst case, an attempt to enter Chinese politics after 1997 to subversive elements. The Chinese government`s determination to stop implementing reforms after 1997 reflects the fact that it does not feel compelled to abide by unacceptable political agreements reached by illegitimate foreign occupiers on Chinese soil. 5Se 1. On 1 January 2004, 273 categories of products (according to the nomenclature of Chinese law) originating in Hong Kong will no longer be subject to import duties in mainland China. It includes many products related to watches, jewelry, textiles and clothing, chemicals, pharmaceuticals, cosmetics and the electronics and electrical industry.
Customs duties on imports from the PRC on some of these products remain high: from 27% to 35% for jewellery, from 18% to 22% for cosmetics, from 14% to 23% for watches and from 5% to 30% for electrical and electronic products. . . .