ENG-2007 — Page 126

86 | Financial and Monetary Affairs

benefits under CEPA) and to acquire shareholdings in Mainland banks. The Mainland authorities will also expedite the processing of Hong Kong banks' applications to establish branches in specific regions on the Mainland, including Guangdong Province.

Hong Kong insurers also took advantage of CEPA during 2007. A Hong Kong insurer was approved by the China Insurance Regulatory Commission under CEPA in September 2007 to form a joint venture insurance company in the Mainland. There have been further liberalisation measures in the insurance sector since the signing of the Supplement IV to CEPA. They include the setting up of an examination centre in Hong Kong for the Mainland qualifying examinations for insurance intermediaries and the permission for Hong Kong insurance agency companies to set up wholly- owned enterprises in the Mainland to provide insurance agency services to the Mainland insurance companies.

In the accounting sector, liberalisation measures include, among others, the mutual exemption of certain professional examination papers, extension of the validity period of Hong Kong accounting firms' Mainland 'Provisional Licence for the Performance of Audit-related Services' to two years.

Economic Summit on 'China's 11th Five-Year Plan and the Development of Hong Kong

In January 2007, the Focus Group on Financial Services formed under the Economic Summit on 'China's 11th Five-Year Plan and the Development of Hong Kong' proposed an action agenda with 80 recommendations and an overall direction for developing Hong Kong as China's international financial centre of global significance, and establishing a a cooperative, complementary and interactive relationship with the financial systems in the Mainland.

By end-2007, progress had been made in over one-third of the 80 recommendations, which included the issuance of RMB bonds and the expansion of the QDII scheme. Looking ahead, the Government and Hong Kong's financial regulators will continue to foster the links between the Mainland and Hong Kong markets to enhance their efficiency. Hong Kong will also seek to expand its financial institutions' business on the Mainland, and to better enable Mainland capital, investors and financial institutions to use Hong Kong to go international.

The Focus Group on Professional Services, Information & Technology and Tourism conducted an in-depth study of the specific issues raised at the Economic Summit, including how Hong Kong should strive to attain a leading position globally in professional services. The Sub-group on Professional Services recommended a number of strategic proposals for the accountancy profession to sustain Hong Kong's influence in the international professional arena and to enhance cooperation and exchange between the accountancy professions on the Mainland and Hong Kong. The Government and the Hong Kong Institute of Certified Public Accountants (HKICPA) will follow up the recommendations.