Since reunification, the Government has made significant progress in developing and maintaining a cordial working relationship with the CPG and other Mainland authorities. Through a wide range of exchanges, including visits, meetings, seminars and training programmes, various bureaux and departments of the Government and their Mainland counterparts have enhanced mutual understanding.

The Hong Kong and Macao Affairs Office (HKMAO) of the State Council facilitates and provides assistance to the HKSAR Government in developing official contacts with Mainland authorities. The Government also maintains close liaison with HKMAO on matters of mutual concern and arrangements for official visits between the Mainland and Hong Kong.

Article 22 of the Basic Law provides that no department of the CPG and no province, autonomous region, or municipality directly under the Central Government may interfere in the affairs which the HKSAR administers on its own in accordance with the Basic Law. The CPG and other Mainland authorities have conducted business with the HKSAR in accordance with this principle.

In April 2006, the Government set up the Mainland Affairs Liaison Office within the Constitutional Affairs Bureau to strengthen liaison with the Mainland and facilitate exchanges and cooperation with provinces/regions. The office is responsible for formulating overall strategies and direction of cooperation between the HKSAR and the Mainland. It also oversees the work of the Office of the Government of the HKSAR in Beijing and the Hong Kong Economic and Trade Offices (ETOs) on the Mainland.

In September 2006, the Government set up two new ETOs in Shanghai and Chengdu to further promote exchanges and cooperation with the eastern and the southwestern regions of China. In addition, the geographical coverage of the Guangdong ETO was extended in April 2006 to include Guangxi, Fujian, Jiangxi and Hainan. A new immigration division has been set up in the Guangdong ETO to provide assistance to Hong Kong residents in distress in the areas within its purview.

As the province closest to Hong Kong, Guangdong has the most extensive ties with the HKSAR. For 25 years, the Cross-boundary Liaison System has provided an effective mechanism for Hong Kong and Guangdong to discuss and resolve practical issues of mutual concern, including the fight against cross-boundary crime and the regulation of the Shenzhen River.

The Hong Kong/Guangdong Cooperation Joint Conference (Joint Conference) provides a high-level forum to explore and coordinate major initiatives in cooperation between Hong Kong and Guangdong. On August 2, 2006, the Ninth Plenary meeting of the Joint Conference was held under the co-chairmanship of the Chief Executive of the HKSAR and the Governor of Guangdong.

The two sides agreed that to capitalise on the development/opportunities of the 11th National Five-year Plan which commenced in 2006, the two places should step up cooperation in various aspects, taking into account the future development of both places. Such aspects included economic and trade matters, major infrastructural projects, air quality improvement, control-point operation, facilitating cross-boundary flow of people and cargo, food safety and prevention of diseases.

In addition, the Hong Kong Guangdong Strategic Development Research Group continues to conduct research into subjects which have a significant bearing on Hong Kong/Guangdong cooperation while the Greater Pearl River Delta Business Council provides a forum for Hong Kong and Guangdong enterprises, trade and business associations to discuss ideas aimed at enhancing economic cooperation between the two places.

The Government also attaches great importance to cooperation with Shenzhen, Hong Kong's closest neighbour. The two governments have stepped up exchange and cooperation in a number of areas, including control points operation, infrastructure, town planning, the implementation of the Closer Economic Partnership Arrangement (CEPA), science and technology, environmental protection and other such plans.

Since the commencement of the Pan-Pearl River Delta (PPRD) regional cooperation scheme in June 2004, the Government has been promoting development and cooperation in the region through building on the strengths of Hong Kong. To promote tourism and people linkages, the Individual Visit Scheme has been extended to cover all provincial capitals in the PPRD region since 1 May 2006. To promote Hong Kong as the capital financing platform for PPRD provinces/regions, the HKSAR Government organised a 'PPRD Region Financial Services Forum' in March 2006, and a financial services delegation to Hunan province in September 2006.

Moreover, the Chief Executive led three business delegations to Guangxi, Hunan and Guizhou in the PPRD region in 2006, to facilitate the private sector to explore cooperation and investment opportunities. The HKSAR Government also participated actively in the compilation of and follow-up on the PPRD's specific sector cooperation plans on transportation, energy, innovation and technology, informatisation and environmental protection.

The Hong Kong/Shanghai Economic and Trade Cooperation Conference was established in October 2003 by the HKSAR Government and the Shanghai Municipal Government to foster closer economic and trade ties. The two sides also agreed to strengthen cooperation in eight areas — airport management; port and logistics; the Shanghai Expo 2010; tourism, convention and exhibition industry; investment and trade; professional exchanges; financial services; and education, health and sports.

The Second Plenary Session of the Hong Kong/Beijing Economic and Trade Cooperation Conference was held in November 2006. Both sides agreed to enhance cooperation in the four areas of the 2008 Olympic Games, further implementation of the CEPA, financial services, as well as innovation technology and creative and cultural industries. Opportunity for future cooperation in city management was also explored.