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China Optimistic on New Hong Kong Trade Deal

China's prime minister says a new trade deal with Hong Kong should help the territory's struggling economy.

Prime Minister Wen Jiabao says the pact shows Beijing's "care and support" for Hong Kong.

The prime minister says the agreement covers Hong Kong goods and services sold in mainland China. Its goals are to cut customs duties and to give service businesses greater access to China.

Mr. Wen made the comments Sunday after officials from Hong Kong and mainland China signed the Closer Economic Partnership Arrangement, or CEPA.

Mr. Wen is in Hong Kong to mark Tuesday's sixth anniversary of the former British colony's return to Chinese control.

Hong Kong still has a capitalist economy, a British-style legal system and far greater freedoms than the rest of China.

However, there are concerns those freedoms are threatened by new anti-subversion legislation that many religious, media and business groups say will cripple free speech. On Tuesday, tens of thousands of residents are expected to march to protest the legislation.

The march is expected to be the biggest since June 1989, when as many as a million residents of the city poured into the streets in support of the pro-democracy movement that Beijing crushed. Many political analysts say the specter of that protest led Beijing to require the Hong Kong government to pass new laws banning sedition, treason and subversion.

Prime Minister Wen is scheduled to leave the city Tuesday shortly before the march begins. Many of the marchers are expected to call for an end to the administration of Tung Chee-hwa, who has been Hong Kong's chief executive since the return to Chinese rule in 1997.

Hong Kong has suffered an economic slump over the past three years, made worse this year by the outbreak of Severe Acute Respiratory Syndrome, or SARS.

The trade deal with China will eliminate Chinese tariffs on more than 200 types of Hong Kong goods next year, and on thousands others in 2006.

The agreement, which is the first free trade pact China has ever signed, also makes it easier for Hong Kong companies to operate on the mainland.

Officials in Hong Kong and on the mainland say the deal will boost the city's economy, but many observers say the immediate benefit may be modest.