China has agreed to further open its economy to goods and services from HK SAR under an expanded free trade agreement that aims to strengthen economic ties between the mainland and the territory, officials said Thursday.

The free trade pact _ called the Closer Economic Partnership Arrangement, or CEPA _ will waive import tariffs on a broader range of Hong Kong goods including electronics and spices, Hong Kong's leader Donald Tsang announced at a trade forum.

The pact will also grant the city's legal, tourism and construction industries greater access to the mainland market starting next year, he said.

Although Hong Kong returned to Chinese rule in 1997, the former British colony's products and companies are still treated as foreign under mainland Chinese law. CEPA is intended to address this disadvantage.

Tsang added that China was studying ways to let Hong Kong companies conduct more transactions in Chinese yuan, including allowing local firms to settle payments for imports from China with the Chinese currency.

The first CEPA deal, signed in 2003, gave zero-tariff status to products in 374 tariff codes. A follow-up agreement in August 2004 expanded that to goods in another 713 tariff codes, including pharmaceuticals, textiles, clothing, food and beverages.

Thursday's announcement came days ahead of the ninth anniversary of Hong Kong's handover to Chinese rule.