Access The Legal System Of Hong Kong And The Mainland Banking Market Under The Framework Of Cepa Study

As the international competition becoming increasingly fierce, the WTO members, making use of the exceptions of regional economic integration, establish regional economic organizations with other countries or regions to strengthen regional economic cooperation and their international competitiveness. Financial cooperation is extremely important in economic cooperation. With the development of regional economic integration, regional financial integration has becoming a rising tide, in which Hong Kong and Mainland are also involved. Affected by the Asian financial crisis in 1997 and the economic recession of Europe and America after the 9.11 Incident, Hong Kong and Mainland decided to build a strong cooperation mechanism to occupy a seat in the world banking market. On 29 June 2003, the Mainland and Hong Kong Closer Economic Partnership Arrangement (hereafter referred to as CEPA) was signed. The legal system of Hong Kong and Mainland banking market access under the framework of CEPA is constructed by the regulations about banking market access in the documents of CEPA and related regulations in the banking laws of the two regions.The market access system is the first threshold for banks entering the other's market. Because we are different customs regions in one country, the access threshold should be lowered. Through CEPA, Mainland, making use of the exceptions of regional economic integration, rendered Hong Kong banks more preferential market access treatment than other WTO members' banks, whom can occupy a favorable position of Mainland banking market in advance. After the implementation of CEPA in 2004, the vigorous development of the banks in each other's markets, show that the legal system of Hong Kong and Mainland banking market access under the framework of CEPA has playing a great role in promoting the development of economy in the two regions. However, the CEPA framework was established for a short time, which needs to be improved continuously in the practice. At the same time, the ultimate goal of CEPA is to benefit Four Regions of Cross-Strait, and to promote common prosperity. Therefore, Taiwan and Mainland should learn from the legal system of Hong Kong and Mainland banking market access under the framework of CEPA, construct cross-strait banking cooperation system as soon as possible. This paper is based on it.There are more than 30000 characters in this paper, including six parts. The important points are as follows:The first part is introduction. This section seeks to foreshadow elaboration of the legal system of Hong Kong and the Mainland banking market access under the framework of CEPA. First, it introduces two basic concepts: foreign banks and market access, the legal theoretical foundation of foreign banks market access, and the different definition of foreign banks in the laws of Hong Kong and Mainland. Secondly, it introduces the signing background of CEPA and its four supplemental agreements, and the composition of their documents. Thirdly, through the data collected from the websites of the Hong Kong Monetary Authority, China Banking Regulatory Commission and individual banks, it displays the developing course and status quo of Hong Kong banks in Mainland and Mainland banks in Hong Kong, to affirm the positive significance that establishing and improving the legal system of Hong Kong and Mainland banking market access under the framework of CEPA.The second part discusses the legal system regulating banks from Hong Kong entering Mainland market under the framework of CEPA. First it introduces the main regulations about banks from Hong Kong entering Mainland market: the Regulation of the People's Republic of China on the Administration of Foreign-funded Banks and its detailed rules for implementation, CEPA and its four Supplemental Agreements, the Administration of Equity Investment of Overseas Financial Institutions in Chinese-funded Financial Institutions Procedures. Secondly, it expounds the form of access, the qualifications to access and the procedures of access under the two conditions: establishing an independent bank and buying partial or all property or stocks of another bank to be a stockholder. Thirdly, it focuses on the standards for defining and procedures for approving of Hong Kong banks in CEPA. And then it proposes a point of view that the Spill-over Effect caused by adopting the Criterion of the Registered Places to define Hong Kong banks can benefit the banks of two regions, and even Taiwan's banks.The third part discusses the legal system regulating banks from Mainland entering Hong Kong market under the framework of CEPA. First it introduces the main regulations about banks from Mainland entering Hong Kong market: the Banking Ordinance, the Codes on Takeovers and Mergers and Share Repurchases. Secondly, it expounds the form of access, the qualifications to access and the procedures of access for establishing an independent bank. Thirdly, it briefly introduces the rules regulating the Mainland banks merging Hong Kong banks in Hong Kong market.The fourth Part discusses the legality that Mainland rendered Hong Kong banks privileges on market access. First, it compares and analyses the different qualifications for enter Chinese Mainland banking market of banks from Hong Kong and other WTO members, which illustrates that Mainland rendered Hong Kong banks more privileges on access through CEPA. Secondly, it introduces the WTO exceptions of Most-Favored-Nation Principle, with focus on regional economic integration. Thirdly, by deductive reasoning, it demonstrates that CEPA belongs to organizations of regional economic integration, to prove that Mainland rendering Hong Kong banks privileges is based on the exceptions of regional economic integration, which does not violate the WTO rules.The fifth Part introduces the EU supervision system on foreign banks market access formed of a series of Banking Directives. On the basis of referring to the European Union experience, this paper proposes some suggestions to perfect the legal system of Hong Kong and Mainland banking market access under the framework of CEPA.The last part looks into the future of Taiwan banks entering the Mainland market. It analyses the necessity and the urgency of Taiwan banks entering the Mainland market, and then states that Taiwan banks can take a hitch-hiker of CEPA to enter the Mainland market in the name of Hong Kong banks to alleviate the immediate urgency. From a long-term perspective, the Cross-Strait should negotiate as soon as possible for building a banking cooperation system and promoting the common development and prosperity of the Cross-Strait banking.