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(i)
(ii)
(iii)
Compensation trade, processing and assembly arrangement
(補償貿易,來料加工);
Reciprocal contract();
Wholly foreign-owned enterprise ( 1 ); 企業;
(iv) Equity joint venture enterprise(); and
Contractual joint venture enterprise().
(v)
Collectively, manufacturing
establishments
with contracts of
types (iii) to (v) above are known as foreign-invested
enterprises (三資企業
10.
).
All the manufacturing establishments heavily engaged in OP, irrespective of the types of OP contract signed, supply most of the materials/parts to the manufacturing plants in China
from or through Hong Kong, and such materials and
semi-manufactures enjoy tax-holiday (i.e. exempted tariff) in
the initial years of the OP contract. As OP becomes prominent in China, some manufacturing establishments have begun to procure supporting materials, e.g. carton boxes, which are processed goods produced by other Hong Kong entities through OP, directly from the manufacturing plants in
in China without crossing the border. This saves both transportation cost and time.
11.
According to
the manufacturing establishments interviewed, processed goods covered by compensation trade, processing and assembly arrangements and reciprocal contracts must be re-imported back to Hong Kong otherwise tariffs will be levied on imports of materials/parts at the same rates as those applied to ordinary imports into China.
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