In a gesture of goodwill, mainland China signed a much-ballyhooed free trade agreement with Hong Kong on Sunday that will eliminate tariffs on 273 products made in the quasi-autonomous southern region.
The agreement also covers some service sectors, but it is not expected to make a major difference in the flow of goods and services between Hong Kong and the mainland.
China’s premier, Wen Jiabao, called the deal “only the first step toward closer economic partnership between Hong Kong and the mainland” as China also makes it easier for Hong Kong companies to invest through a variety of more relaxed rules and regulations. The mainland is used as a low-cost manufacturing base by many Hong Kong companies.
Hong Kong also will be the first to get some concessions China has promised to members of the World Trade Organization, Wen said.
He promised that Beijing would continue its “trend of reform, opening up and modernization of China.”
Some commentators have questioned the timing of the deal and see Hong Kong’s rush to enact anti-sedition laws as a sop to Beijing in return for economic favors.