SCARLETT CHIANG and STAFF REPORTER in Guangzhou

Guangdong is drafting an agreement to demolish trade barriers among the nine provinces that make up the pan-Pearl River Delta regional economic co-operation grouping.

A spokeswoman for the Guangdong Commerce Department said a draft would be ready at the end of the month after which the other eight provinces would be canvassed for their views.

The deal does not include Hong Kong or Macau, which are separate customs areas.

"We are hoping to have a meeting of the various commerce departments in Guangzhou in October to sign the agreement," she said.

The draft will cover the removal of trade barriers; expansion of market access; co-operation in the registration and supervision of enterprises; a system to protect patents; counterfeiting; protection of consumer rights; exchange of information among the various commerce departments; and, the setting up of a liaison mechanism.

Yuan Gangming , a macroeconomics expert at the Chinese Academy of Social Sciences, said protectionism was not as serious a problem as it was in the past.

"In the 1980s a lot of barriers were erected but many have since been torn down. Except for tobacco there are very few barriers to commodities," he said. "As for the auto industry, Shanghai, Hubei and the northeast are very protective because they are production bases, but the rest of the country doesn't care.

"I feel that what is more important for ... co-operation is not barriers to commodities but restriction to the mobility of people."

Even in Guangzhou, outsiders still face barriers including having to pay sponsorship fees to schools in order to get children enrolled and not being allowed to act as legal representatives of companies.

Mr Yuan said it was easier to lift such barriers in a regional context rather than nationwide.

"By setting up a region, it's possible to move ahead of the others in tearing down barriers. It's easier to bring down the barriers for a province which has good relations with you than one that is far away."

Meanwhile, Hong Kong's Chief Secretary Donald Tsang Yam-kuen said yesterday it would take more time and effort to overcome the challenges before reaping the benefits of the pan-Pearl River Delta project.

Addressing a seminar on regional integration, Mr Tsang said people should not underestimate the difficulties ahead.

"The level of economic development in some provinces in the pan-delta region is still in its early stage. It takes some time to reform economic structures and upgrade the labour quality in these areas," he said.